Walk me through the Canadian IB sector

Prospect in IB-M&A

Hey,

Can anyone walk me through IB in Canada?

1) which banks are there? Who are the main players ?
2) which schools get recruited from (target schools)?
3) which cities have the most deal flow?
4) are there any BB/EB banks apart from Canadian ones?
5) what is the general reception to IB in Canada? Is it prestigious?
6) what are the strongest teams and sectors?
7) what are the exit opps in Canada ? Pension funds ? Any mega fund pe shops ?
8) does anyone know bankers from Canada that lateraled to the us or transferred offices ?

Comments (31)

Jan 26, 2020

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    • 1
Jan 26, 2020

Is Toronto not a target school?

Array

Jan 26, 2020

No the only target schools are Queens and Ivey

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  • Associate 1 in S&T - FI
Jan 27, 2020

What are comps like?

Most Helpful
Jan 27, 2020

1) Best to think of the Canadian market in two tiers: blue-chip and the middle-market.

Blue-chip is primarily public company transactions and some large private deals, and where you see all of the stuff in the headlines. Canada's 'Big 5' dominate this space (RBC, BMO, CIBC, TD, and Scotia), and would be considered the BBs. National Bank (HQ in Montreal) is also a big player, and then you have a bunch of US BBs (JPM, GS, MS, BAML, Citi), and international BBs too (Barclays, DB, etc.)

The middle-market is where the majority of the transactions are, however. Just take a US deal size in dollars and divide it by 10 to get the equivalent in Canada ($1B deal = $100MM deal). Some of the 'Canadian BBs' play here, but Big 4 accounting firms corporate finance/M&A groups have the biggest presence and see the most deal flow. Some of the Big 5 banks have Middle-Market groups (RBC and CIBC for sure). More independent firms (usually ex-Big 4 parners) than you can count in the Canadian middle-market too.

2) Target schools would be: Ivey, Queens, University of Toronto, McGill, UBC, University of Alberta, and University of Calgary.

3) Toronto has the most deal flow by far. Montreal is second up. Vancouver and Calgary trade spots for #3 depending on how the oil patch is doing.

4) See response to #1. Almost every major US BB has an office in Toronto (some in Calgary too), as well as some European BBs. Some EBs in Toronto include: Evercore, Rothschild, Lazard, and Greenhill.

5) IB is generally only prestigious to people that are really focused on that career path. Medicine, law, tech firms, big corps, and accounting would all hold similar prestige to the average person. As a proportion of total finance jobs in the country, Canada likely has more asset management/buyside roles compared to the US. Public buyside, private equity, pension funds, and asset management roles are more common and equally as prestigious as IB.

6) No comment. RBC is usually very strong across all sectors though.

7) Not many large-cap, independent PE shops (Onex for sure, maybe Catalyst, Birch Hill, Brookfield). The big PE players are all pension funds: CPPIB, OTPP, OMERS, BCI, Caisse de depot)

8) No comment. LinkedIn search is your friend.

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Jan 27, 2020

Good analysis but would comment is that Calgary has far more deal flow than Montreal or Vancouver (seriously?), even in weak markets. In a hot market energy is by far the busiest sector. Before prices crashed in '14, energy was half of RBCs investment banking revenue in Canada and pretty similar for other banks. Who knows when/if that ever comes back though and would try to avoid that market.

Unless you want to lateral out of Canada, id stick to the Big 5 as they have the largest share of deal flow with boutiques generally being pretty weak from both quantity and quality of dealflow perspective. BBs stick to large deals and leveraged finance and some offices are pitch machines which maybe get a deal every other deal and never clear if it's NY running the process or not. Very possible to lateral to the US or London from BBs though - seen it from GS, BAML,CS, JPM, MS, BARC. Its pretty east to get a L1 visa even today.

  • Associate 3 in IB - Gen
Jan 28, 2020

This is correct - RBC Calgary had massive dealflow but they also had massive overhead with tons of MDs. I think the ratio was like 2 analysts to 1 MD? Also why that was such a sweatshop. Not really sure what comes out of Vancouver although I've heard they are weirdly regimented on juniors there - have to come in at 8 30am, have to always wear suit and tie etc. Montreal used to produce very high revenue per head and was very light on senior level staff so they paid their juniors a lot. They recently hired a bunch of juniors and grew the team significantly, but their revenue has declined the past couple years along with much of RBC, unfortunately.

Jan 28, 2020

Montreal has the largest number of public companies HQ'd outside of Toronto. There are definitely more deals there than Calgary (although spread across equity, debt, and M&A). CN Rail, Power Corp, Alimentation Couche-Tard, Bombardier are just a few relevant names.

Vancouver is diversified with a mining focus. Similar to Montreal, they're busy with equity, debt, and M&A stuff across all industries (bankers are industry segmented, not product). So I would wager that Vancouver has been busier than Calgary over the past few years.

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Jan 31, 2020

This is great information. + SB. A few bits of color I'd add:

1) I would say that RBC and BMO are by in far the strongest banks in Canada. Primary reason: strong balance sheet / corporate finance and leading with capital markets advisory.

6) Strongest teams in Canada by far are usually natural resources/mining/O&G and FIG usually. Canada's TMT/Consumer/Indy are so thin that most banks usually put them all under some form of "Diversified Industries" label. Not enough flow alone to feed the heads needed. I'd say our reporting requirements for resource firms (with things like the NI 61-101) are some of the best in the world and very condusive to being commercial, especially for junior miners. UK would be next on the list with AIM.

8) I have some experience here (I'm currently in NYC). Current environment is a bit harder. Let me know if you have specific questions. I will reply here if there are potentially of interest to the broader group or you can PM me if it's unique to you.

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  • Associate 3 in IB - Gen
Jan 31, 2020

Disagree on BMO - they may have a top-notch mining franchise but TD is head and shoulders above in M&A and BMO has a terrible culture laying juniors off all the time. Several associates per year. TD and RBC are the best - I interviewed at BMO btw, amongst others, and work at another Canadian bank that I referenced.

  • Intern in IB-M&A
Jan 27, 2020

Canaccord Genuity anyone

Jan 28, 2020

They probably fit in between blue-chip groups and the middle market.

They'll do public transactions, but not as large or high-profile as the Big 5. Will also play in the middle-market M&A space.

Similar company is Richard GMP. Think there's been a lot of consolidation in this space.

Jan 31, 2020

Richardson GMP is just retail...GMP the investment bank was acquired by Stifel
Agreed on Canaccord's placement though...lower prestige than the banks but pretty solid deal flow with a wide range of size
2018 and 2019 were strong years (mostly due to cannabis deals), so I'd expect the numbers to come down a bit

Feb 14, 2020

Canaccord is building its brand around canabis now, doing most big deals in the industry

Jan 31, 2020

Heard from multiple sources that BMO culture is bad in Toronto, with juniors being frequently laid off as well.

BMO Montreal is an absolute sweatshop, worst hours of all Big 5 banks in the city.

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  • Analyst 1 in IB - Gen
Feb 13, 2020

I would caution against painting BMO with a wide brush of it having a rough culture. It is quite group dependent, some groups at BMO can be lax (ie. tech). The reputation as a sweatshop primarily comes from its infamous mining group

  • Associate 3 in IB-M&A
Feb 13, 2020

lol its lax because canadian tech groups have no deal flow

Feb 14, 2020
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