Comments (53)

 
Best Response
Sep 6, 2016 - 3:30pm

You have limited exit ops because you generally don't model. But the whole point of capital markets is not grinding to the point you burn out and have to exit.

Reality is there are a ton of great roles in the finance world but most people only know M&A and PE.

  • 6
 
Sep 10, 2016 - 11:33pm

TNA:

You have limited exit ops because you generally don't model. But the whole point of capital markets is not grinding to the point you burn out and have to exit.

Reality is there are a ton of great roles in the finance world but most people only know M&A and PE.


Going to have to disagree with you. Capital Markets does model at many banks. At my bank we have quantitative risk models, liquidity risk models, credit risk models, capital risk models, interest rate risk models, and plenty of specialty regulation models. All of this is modeled and handled in the capital markets team. Also the average user on the team knows at least one language Python, R, SAS, SQL, VBA, etc. Maybe I mis interpreted but we spend every day modeling capital market risk and presenting the senior leadership. We also have many people come from and go to top 15 schools. Lastly the exit ops are pretty significant. Plenty of other risk or consulting based positions available. CCAR, Dodd Frank, 2052A regulation, Daily LCR and more. The BIG4 has hired hundreds of risk professionals to meet these demands as well as JP Morgan and other large banks.
 
Sep 18, 2016 - 10:37am

Praesto:

TNA:

You have limited exit ops because you generally don't model. But the whole point of capital markets is not grinding to the point you burn out and have to exit.Reality is there are a ton of great roles in the finance world but most people only know M&A and PE.

Going to have to disagree with you. Capital Markets does model at many banks. At my bank we have quantitative risk models, liquidity risk models, credit risk models, capital risk models, interest rate risk models, and plenty of specialty regulation models. All of this is modeled and handled in the capital markets team. Also the average user on the team knows at least one language Python, R, SAS, SQL, VBA, etc. Maybe I mis interpreted but we spend every day modeling capital market risk and presenting the senior leadership. We also have many people come from and go to top 15 schools. Lastly the exit ops are pretty significant. Plenty of other risk or consulting based positions available. CCAR, Dodd Frank, 2052A regulation, Daily LCR and more. The BIG4 has hired hundreds of risk professionals to meet these demands as well as JP Morgan and other large banks.

Ok, cool, but none of this modelling is relevant to the HF/PE jobs so many covet. Modelling isn't a goal in itself; it's simply an important skill needed to move to many buyside roles.

I come from a DCM background and the main issue as I see it is that you don't build as rigorous a financial analysis skillset as bankers nor as deep a markets understanding as traders...so you are essentially useless to buyside shops.

I had to work very hard on my own time to bridge that skills gap and make it to the buyside.

 
Sep 21, 2016 - 7:22pm

Does any one here work in a IBD Capital Markets group? (Originally Posted: 12/14/2006)

Does or has anyone worked in a IBD Capital Markets group? All of you guys cant be M&A

 
Sep 21, 2016 - 7:24pm

Every one explains and argues what it is(the jack you off middle office men vs the front office) but never admits to working for one.

The most relevant threads are the M&A and Lev Fin threads.
I just want to know if anybody has worked in a IBD debt Capital Markets Group.

 
Sep 21, 2016 - 7:26pm

BB Capital Markets Groups (Originally Posted: 11/08/2012)

How do they stack up across the firms

Maybe think MS, JPM, GS, Barclays, DB

Been speaking to some people from 3 of these, and am definitely considering doing this for the summer (if I can get an offer). Pay is similar to IB, hours long but more predictable. Only downside is worse exit opps for the most part.

 
Sep 18, 2016 - 12:17pm

poopybutthole:

The way I see it: capital markets guys sorta get a grasp on companies but not like bankers, and get a feel for working with markets but not like traders

This is actually very accurate (I spent a summer in a capital markets function). You're kind of in this awkward position between the company and the markets. You might get a decent understanding of the industry vertical(s) you work with and the markets, but you won't be really good at either. When looking to take the next step in your career, it definitely is more valuable to be all in on companies or the markets, instead of "decently good" at both.

 
Sep 21, 2016 - 7:27pm

I think capital markets groups are similar to IBD rankings. Just go for the best names first, which is GS/MS and then JPM and Barcap/DB follow up afterwards.

 
Sep 21, 2016 - 7:29pm

Not sure if this is necessarily true...JPM, Citi and the like have much larger balance sheets and are much higher on LevFin and other syndicated finance league tables than Goldman and MS. You might see more acquisition financing at GS/MS which provides a much more rigorous analyst experience than a typical refinancing.

 
Sep 21, 2016 - 7:30pm

SanityCheck:
I think capital markets groups are similar to IBD rankings. Just go for the best names first, which is GS/MS and then JPM and Barcap/DB follow up afterwards.

This isn't true. For DCM/LevFin, BAML and JPM are top two by far then Citi. MS and GS are M&A shops and are not as strong as BAML and JPM because they lack the retail presence and size of the balance sheet. As always, if you want to learn more, go check out the Thomson league tables.

 
Sep 21, 2016 - 7:28pm

Is that pretty much agreed upon?

Also, within Capital Markets groups in terms of exit opps-

  1. Leveraged Finance (if even considered with the others)- PE
  2. ECM- coverage group, ECM related HF
  3. DCM- stay at bank move to other group, Treasury department of company?

I'm sure there are many more, but these seem to be the most common.

 
Sep 21, 2016 - 7:32pm

When I mentioned capital markets I didn't include Levfin.

If that's the case, then you should really look at not rankings but the role of the group. BAML levfin for example actually does modeling and I think JPM as well.

I don't agree with Citi levfin being top for anything but feel free to argue that alongside the other BB levfin teams that only do pricing and send you 1 obsolete page after a week of requests.

 
Sep 20, 2016 - 2:54pm

It really comes down to what you are trying to do long-term. If you are wanting to get to the buyside, see the above comments as to why it will be more difficult for capital markets guys. If you're looking to be a career banker - then CM can certainly be a great choice. Just know you'll be traveling a lot more than some of the other groups and given the economics, you'll need to crank out a lot more deals each year to be on a similar comp-level to some of the other industry / product groups

 
Sep 20, 2016 - 2:58pm

Spoke to a DCM analyst working at a top bank. This kid was on his way to play soccer with his boys at 4pm during the week. He just goes "look, gotta rush because I'm on my way to play soccer at the park" while searching for his cleats and small shorts. Nothing bad working in cap markets.

Except the downfall in exit opps, if you care about that sort of thing

 
Sep 21, 2016 - 7:38pm

Capital markets, anyone? (Originally Posted: 05/01/2007)

There are a lot of discussion about IBD here -- anyone thought about capital markets? Compare to IBD, capital markets have 1) more stable hours 2) similar pay (10k lower?). But it seems that capital markets positions aren't as popular as IBD -- exit opp. not as good? What do capital markets analysts do after two years? will appreciate your input, thanx.

 
Sep 21, 2016 - 7:39pm

I thought most capital markets people are there to stay....and in some cases, capital markets IS IBD. Not in the traditional M&A industry connections sense, but hey, somebody's gotta specialize in the actual PRODUCTS that the ibank offers.

"We are lawyers! We sue people! Occasionally, we get aggressive and garnish wages, but WE DO NOT ABDUCT!" -Boston Legal-
 
Sep 21, 2016 - 7:40pm

i agree. equity and debt capital markets are part of the IBD...though at times i've seen some banks have separate corp. fin. and IB divisions. Either ways, capital market analysts form a part of the product group...or so to say providers of "the market solution" that the IBs offer.

 
Sep 21, 2016 - 7:41pm

Capital Markets Overview (Originally Posted: 08/26/2011)

I'm sure I'll get mocked from a few monkeys on here, but I came across this video clip and think it is worth watching for anyone new to the Capital Markets industry. Might also be valuable for anyone looking for some tips regarding career advancement, etc...

Starts off with an overview of the areas within Capital Markets, and then profiles different positions within the various departments.

http://www.wcm.ca/default.aspx?tabid=10000258

 
Sep 20, 2016 - 3:56pm

Its funny because all the FT analysts want industry coverage or M&A, but all of the associates want capital markets (even a lot of the analysts). When you want the exit, it makes sense to have the industry background, even though it doesn't really matter. You are not going to bring any unique industry/investment perspective to any fund after two years as an analyst...no matter what you think.

 
Sep 21, 2016 - 7:43pm

What is Capital Markets (Originally Posted: 09/16/2011)

Some IB firms have an investment banking division and a capital markets divisions. What the hell does the capital markets division do?

 
Sep 20, 2016 - 9:34pm

Wanted to chime in - As someone actually in capital markets, it is pretty easy to see why it is generally looked down upon compared to IBD. Firstly, your exit opportunities are rather limited. IB and consulting are really popular not only because they pay well, but because they provide exit opps to a variety of places. GCM is a relatively niche skillset that generally does not transfer well to other roles. You will get virtually no modeling experience and won't really get to think on the business side of transactions. You will also get a very surface level understanding of companies that you are working with as you pretty only care from a rather narrow product point of view. From what I have seen, the exit opportunities are either to traditional IBD, business school, or corporate role (though not really strategy or development). It can also become really mind numbing as a lot of DCM and ECM is very process driven and deals start being the same when you've seen the same thing 10x in a year with minimal changes. Also, to those who say to just progress in GCM, it isn't as easy as it sounds. GCM is still highly competitive and you aren't guaranteed to keep advancing especially as like others have said, people realize that GCM is a pretty decent spot to be. There are far fewer GCM roles than traditional IBD roles out there, and even fewer decent platforms which pay their GCM guys well. When you hit your wall and are forced out, where will you go that will have somewhat comparable compensation?

With that said, the the main pro of GCM is that it generally has solid work/life balance if there aren't that many issuances. Hours are 60-75/week and you generally have weekends free (although you must still be on call), but YMMV depending on your direct reports. With that said though, the hours in GCM are very intense and stressful and you will often not realize that 10 hours have passed by. What I have experienced has essentially been said over and over again on this forum, though I just wanted to say it again as someone who has capital markets experience and is not just some college student just spouting his mouth.

To sum it up:
Less desirable experiences --> Less Exit Opps --> Difficult to find comparable paying opportunities

 
Sep 21, 2016 - 7:03pm

Generally street. Not sure how it performs past analyst level, but I heard associates is pretty in line with street at my firm too. I imagine that comp probably falls off a bit at the higher level, though I have heard of multi millions (over 3) being paid out to very strong MDs, but that is probably a massive outlier.

 
Sep 20, 2016 - 10:55pm

Im an underclassmen in college and I've been really leaning towards ECM as a career but everyone I talk to just shoots it down because of "no exit opps and no modeling". Tbh I kind of like being able to have a good mix of company/market knowledge and some type of banking experience, especially in an ECM Originations team. Also the pay and hours are pretty nice for FO, especially compared to traditional banking.

Only concern I have about ECM is if you're more senior like a VP, if you get laid off would it be much harder to find a job at another bank? and are ECM guys really the first to go when banks cut down on staff? Any guys w/ ECM experience would be great.

I've also read that if you're in ECM you can probably make the jump to a long/short equity fund if you're good, how much truth is there too that, because I'm also very interested in the PM role at a HF wayy later down the road?

 
Sep 21, 2016 - 7:47pm

Capital Markets Outlook (Originally Posted: 03/02/2015)

I would like to know what you guys think of the next 3-5 year outlook for equity and debt capital markets.

Do you think the IPO market or debt issuance will be more robust near term?
How does the now 6-year bull market factor into downside risk for debt/equity issuance?
Does ECM or DCM have, in general, more career upside / prospect for a career in banking?
How will long-term shifts in macroeconomic and technology trends (10 years+) affect capital markets roles?

My opinion is that due to increasing globalization and economic interconnectedness, and demand for growth capital, equity markets will become an increasingly valuable "niche" product that will experience great demand for professional specialization. I think it will draw a lot more talent than it has historically compared to other banking groups / products.

Please feel free to share all opinions, thoughts, and ideas. Thanks.

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