Valuation vs. Restructuring vs. Transaction Advisory Services vs. Financial Due Diligence

Ray Velcoro's picture
Rank: Baboon | 154

Can someone provide a high level overview of the similarities and differences between the following service areas of financial consulting: Valuation, Restructuring (consulting), Transaction Advisory Services, and Financial Due Diligence?

I know the Big Four has a pretty strong grip on all of these, but do certain firms specialize in certain areas?

What does the nature of work look like within each type of practice? Similar to investment banking? Private equity? Management consulting?

How do exit opportunities differ across each area?

Is compensation consistent between the four of them?


Comments (7)

Aug 18, 2015

Valuation: Lots of modelling and stuff like purchase price allocation
Restructuring: Same as it is at any bank/boutique; Google it
Transaction Advisory / Transaction Services / TAS: Due diligence
FDD: Subset of TAS

Similar compensation at similar levels. Exit opps are roughly similar between Valuation and TAS. Some of the Big 4 even lump these departments together. Rx opps are a bit different.

Aug 19, 2015

So in what groups/departments in big 4 would provide the best exit opportunity/most applicable to IBD after working in big 4 for a while? Thanks.

Aug 18, 2015

Thanks Angus Macgyver, this is all very helpful. For some reason, I was under the impression that Restructuring Consulting was different than Restructuring Banking. How are Big Four Restructuring practices viewed versus the Blackstone/Lazard's of the world? What are some examples of other relevant firms in this space?

In your experience, what are common exit opps for the Valuation/TAS crowd? Based on your previous answer, I'm guessing Rx places well into Corp Dev/HF/PE.

Thx again.

Aug 19, 2015

Moelis and Alvaraz Marsal are big in restructuing as well

Aug 19, 2015

From my experience, FDD and Vals are a part of TAS. Can't speak to restructuring.

Vals is modeling for goodwill impairment testing, purchase price allocation, and stock option valuation. This modeling can support audit work, but the more interesting work is non-audit client work. This can include strategic valuations (pre-deal).

Vals is great for getting modeling experience early on. Because of the audit support, you could find yourself doing many different models in a week. They will be mostly dcf approach.

FDD is data-intense. Lots of data manipulation and supporting the audit team. Some firms make FDD associates complete an audit rotation.

Hope that helps!

Aug 27, 2015

Just a couple clarifying points here that have been made elsewhere in these forums (look around). RX consulting (operational turnaround) is definitely different than RX banking. When a company is entering a distressed situation (cash flow issues, ch. 11 preparation, blowing loan covenants, etc.), a company will often hire 1) an operational consulting adviser who may become the CFO or Chief Restructuring Officer, 2) a banker to assist in refinancing / distressed M&A, and 3) a law firm to navigate the process.

RX consulting is a mix of management consulting with some accounting / banking skills thrown in. RX consultants manage cash, help negotiate loans, etc. They are on-site with the client helping manage the process. RX bankers assist in obtaining in restructuring the financial piece through new financing, distressed M&A, etc.

Strong RX consulting firms: Alvarez & Marsal, AlixPartners, FTI Consulting.

Good RX advisory (not sure who is really "the best"): Houlihan Lokey, Blackstone, maybe Moelis.

Big 4 does RX consulting work, very little RX banking work.

Sep 7, 2015