11/28/17

I was wondering if anyone here had experience with or knows anyone that works at a big 4 restructuring group? I know A&M, Alix, and FTI are top for restructuring (consulting), but how are the big4 viewed in regards to restructuring? is the work any different? ops? etc.

Referring specifically to the US

Comments (13)

11/15/17

Hey kawasakimonkey, the following topics might be helpful:

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Any pros willing to rescue this discussion? @Konstantou @HBShopeful2k16 @ZetaMale

Fingers crossed that one of those helps you.

Management Consulting Interview Course

11/21/17

Sure, I'll bite.

So, Big 4 rarely touch Investment Banking's version of restructuring (e.g. Chap 11 and debt restructuring). Big 4 touches on the Company restructuring. Specifically, operational restructuring.

Basically, Big 4 fall into these buckets;

Operational restructuring aka FTE management (e.g. firing/hiring), process efficiencies (e.g. controls/checks to improve ability to pay, debt coverage, etc.)
Business turnarounds: Strategy (but this is really MBB type work. Big 4 hardly gets a seat at the table here)
Bankruptcy assistance: Essentially project management
Supply Risk Management: Vendor project management

If you're looking for financial restructuring and securities work, Big 4 is not best execution.

Best Response
11/28/17

RX consultant here (at one of the market leaders, non-Big 4). Completely disagree with the above. My take on the industry is following:
- MBB - they do not have a big presence in actual financial restructuring or real CRO work. McK RTS or BCG Turn rather deliver big transformation programmes and not any meaningful debtor or creditor advisory to distressed companies.
- Big 4 rather focuses on financial restructuring. The typical work delivered here would be:

1) Independent business reviews (restructuring due diligence) and debt/cap structure negotiations and advisory. This would be relatively similar to what banks do however Big 4 work typically for mid-market firms and often for creditors.
2) Support in chapter 11 and insolvency proceduresa and Cash Flow/liquidity monitoring
4) Working Cap Advisory - some of the Big 4 in certain markets have dedicated teams to WC improvement within Restructuring, which offers a good mix between financial and ops work.
5) Big 4 also deliver Ops Restructuring work, often to mid-caps however this share of work is far smaller. Bigger operational transformation programmes (so rather performance improvement than advising distressed companies) are rather done by the consulting/advisory arms not Transactions (where restructuring sits). And they actually DO get a a table at large transformations, especially when it comes down to long-term execution programmes.

And there is A&M, Alix and FTI who deliver both financial and ops work and I would consider them market leaders in RX consulting.

11/21/17

Aside from Alix, AM, FTI, are there any other noteworthy restructuring firms?

11/21/17

Not that I am aware of. I do believe however that you can get a very good experience at the Big 4 restructuring groups and you will definitely build out strong financial/modelling skills. My key advice here would be to avoid getting stuck only in one group (e.g. Chapter 11/Administration, Creditor Advisory or WC) and try to move around as much as you can. In certain big markets Big 4 has a habit of placing graduates into fixed and very specialised teams. Working for mid-caps could provide you with a very valuable experience too - it is often more hands-on and you work closer with managemnt, which is exactly what is needed in restructuring.

EDIT: Look into Duff & Phelps as well. They are a solid firm delivering valuations and sometimes restructuring work.

11/26/17

You've been a great help. Do any of these firms hire right out of college? If so, any tips for people who may be applying?

11/21/17

They all do, however AM/Alix/FTI rather favour experienced hires and you might find more luck with the Big 4. The former often serve as an exit op for people from the Big 4, MBB or banks who want to deliver more hands-on work. That said - this is a relatively small industry and if you are really interested in RX I would cast a wide net and apply everywhere - Big 4, AM/Alix/FTI, Duff & Phelps, RX groups in banks and try small boutiques (e.g. spin-offs from Houlihan Lokey, PJT or Lazard) if you can find any. Even 2nd tier accounting firms like Grant Thornton, Baker Tilly or BDO sometimes have RX teams (they often call them Debt & Capital Advisory). Once you are in, it would be easier for you to move around. It's a numbers game when it comes down to recruitment! Good luck!

11/28/17

Thanks a lot for the write-ups. Do you have any idea how possible it is to move into restructuring from TAS? I do FDD currently and while QoE/working capital reports are 100x better than auditing, I do feel like the analysis is a bit cookie cutter and am considering other options.

Do the elite boutiques, so to speak, look favorably upon CPAs with transaction work or are they mostly looking at management consultants from Big 4/MBB?

11/29/17

I think this is a very good background to move to restructuring as you have solid financial knowledge and due diligence is an inherent part of restructuring work. What you will have to pick up on the job though is the operational element so basically how the supply chain works, how to effectively take out procurement cost, how to optimise sales and pricing etc. It would be good if you did some reading prior to any interviews to understand the link between sales/operations and the financials and what the key leverage points to improve the business are. RX consulting combines both financial and operational stuff and since there aren't many people on the junior level who combine those you aren't expected to know everything but you will need to learn quickly on the job. From my perspective, since in RX people come from so many different places I haven't seen anyone "excited" or overly impressed with MBB or top IBD background, no one really cares tbh. What really matters is the ability to execute fast (i.e. no endless startegy PPTs, high-level and detail level diagnostics or designs but real cash/EBITDA impact) and be well-versed in many facets of a business turnaround (financial, strategic/operational, legal). The critical element for you would be to a) to proove that you understand many aspects of the business (as mentioned above) and you are able to learn quick b) to actually find any open positions in the locations where you want to work - RX firms are not the same size as MBB/big 4 or banks and there are far fewer spots open.

11/29/17

I have never seen Duff & Phelps do a restructuring, they don't even have a sales presence in my restructuring market (one of the largest in the country), they are well known for litigation and valuation. After A&M, Alix & FTI, Big 4, you have another tear of multi office firms and then a number of single office firms that compete for middle and lower middle market work. Firms vary be geography and specialization by industry and to a certain extent service line (more operational vs. liquidation vs. CRO work). Also a number of the mid-tier public accounting firms have varying degrees of restructuring professionals

11/24/17

I work at one of the big 4. We have a specific turnaround advisory team (that I sit in) that does operational restructuring. Note that this is very different work from fornal insolvency engagements such as bankruptcy and IAs. Projects i have worked on include a profit improvement program in FMCG, an executive workshop for a Mining giant, and a half-billion dollar cost out program for Government. We compete directly against McKinsey and BCG in this space, along with other boutique firms. A number of partners/directors at my firm are ex-McKinsey and there are great opportunities to work closely with them and tap into their knowledge. Teams run pretty lean so for Analysts you get quite a bit of responsibility early which aids development.

Happy to elaborate further if theres any interest. Cheers.

11/28/17

Do you mind briefly describing, for those of us not in the know, what a project would look like on a day-to-day basis, or maybe what the overall objective of, for example, a "Profit improvement program in FMCG" project would be?

I've read a lot of different things about restructuring and still get a bit confused about the difference between the banking and consulting sides. It'd be great to have someone in the consulting restructuring industry give us their take.

11/29/17
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