WHAT DOES A COVERAGE TEAM DO?

Hi everybody,

I know that there are spread discussions here and there on WSO, but as I am now applying for jobs in IB and realistically will enter the job market in Jan 2015 (signed a contract for a grad program), maybe before (I got an interview on Monday for a short internship), I was wondering what really does a COVERAGE TEAM do in IB.

Could anybody share their own experiences? What does the coverage team do on a daily basis? Hours? Etc...

All answers appreciated, particularly from those in the market already.

Thanks in advance.

 

Would like to add to that article as it doesn't point out some of the 'specialized' industry groups.. At my bank for example, Real Estate and FIG at the analyst level pretty much do all of the modeling - from IPO's, to M&A, etc. There is coverage from the m&a/LevFin teams but it's entirely at the senior level (aka they vet the models / provide comments on decks).

 

@"nontargetPSD92" thanks for your answer. I must admit this has been the article, which mixed with some background reading, made really the point into my mind. Really appreciated. Also everybody else who added some "minutiae" was equally helpful. Thanks!

 

I think you have a slight misunderstanding here. Its actually very rare to have within an industry group separate M&A and coverage analysts. The breakout is usually at a more macro level, either you do or don't have a separate M&A group.

Now, this actually doesn't matter as long as you have M&A separate the industry coverage aspect will remain unchanged. Industry coverage analysts do just that, they cover the industry. This means knowning the companies, keeping up on the news and the comps etc. You will do all of the industry and company sections in pitch books. In the case of an M&A transaction, you would be responsible for the things listed above as well as the operating model (most likely). You will also do all of the capital deals (to the degree with which your bank outsources to capital markets groups).

As to whether this is good or bad, the M&A industry analyst is the one who gets a bad experience. The Product group vs Industry group thing is a breadth vs depth argument (getting to know all industries at a macro level and a product at a micro or vice versa). Someone focused on both industry and product at a junior level really pigeon holes the person.

--There are stupid questions, so think first.
 

I think he's saying that if you do M&A within a specific industry group, that pigeon-holes you because you only get exposure to one product and one industry. For example, some banks have tech M&A groups - you'd only be working on M&A deals in tech, so your experience isn't as broad as someone in tech coverage or general M&A.

 
Best Response

What I said was, if you only do M&A within one industry you are getting pigeonholed. The whole point of being in an industry coverage group is that you get exposure to M&A, Equity, Debt, etc across that industry (to the extent the work is done internally and not by the product group at your specific bank and in your specific coverage group). If you only get exposed to M&A within that industry, you no longer have any knowledge base of the other aspects of banking.

If you are at a place like GS that does internal M&A (no separate group), you have exposure to all aspects, plus you don't have to worry about your M&A modeling getting done by someone outside the group. The analysts at GS in a coverage group don't JUST do M&A. At the senior level, people will just do M&A within that group, but this is a different situation.

In the situation described by the OP, you are a Retail M&A analyst and that is all you do. In the GS situation you are a Retail analyst and you will not have any M&A responsibilities taken away from you.

Do you understand the difference now?

--There are stupid questions, so think first.
 

This only applies to boutiques, that have only tech M&A position. BB's have TMT which includes M&A, debt, and equity, which powermonkey talked about. That's the difference. BB's also have a M&A product group, which works with the industry groups. Basically imagine if you could only do Equity for Mining companies. M&A, Debt, and other industry groups are out of your jurisdiction. You can see how that's limiting and pidgeonholes.

Note: Only GS doesn't have M&A product group.

 
fembotma:
This only applies to boutiques, that have only tech M&A position. BB's have TMT which includes M&A, debt, and equity, which powermonkey talked about. That's the difference. BB's also have a M&A product group, which works with the industry groups. Basically imagine if you could only do Equity for Mining companies. M&A, Debt, and other industry groups are out of your jurisdiction. You can see how that's limiting and pidgeonholes.

Note: Only GS doesn't have M&A product group.

Fairly certain that Barcap doesn't have an M&A product group as well.
 

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