Why did you take a job at a small boutique?

Serious question, since I'm currently recruiting for FT at a few MMs and some small boutiques. I'm leaning towards MM since I think I'd enjoy working at a large bank more, but I don't want to discount the boutiques yet. I know WSO doesn't think much of no-name boutiques, but I really want to hear from people who actually work in one. Why did you decide to go the boutique route instead of going to a larger bank? Was it out of necessity, or did you like the environment and responsibilities you got? Do you think you made the right choice?

 
Best Response

I worked at a no-name boutique but consulting so some things may not apply. My main reasons were:

  • The culture I think is much better; there is a pretty strong sense of banding together because you're a small group and have to collectively bring forward the entire firm. Sure, individual groups at MMs may have the same mentality but they focus on getting their group noticed within the bank and not at advancing the general name, revenue and reputation of the entire firm.

  • Starting salary may be lower at first but promotions are faster if you're good and 4-5 years in salaries catch up. But you'll feel like you've built up the firm in addition to getting the extra money which I think is an extra personal bonus

  • Responsibility. You can do more and more interesting work early on and you also get listened to more. 2 months in I got a potential client lead and acted on it; the firm MD came to the meeting with me and it was just us two with the prospective client. Mad props points for doing this stuff at a boutique. At an MM perhaps you won't get that same chance and if you're at the very low level you'll meet the prospective client with a larger team at which point they'll probably say 'we'll take it from here'. You'll still get credit but perhaps won't be able to act on it as much.

  • You can come back if you build the relationships well. My team saw I had an interest in finance and the company was based around strategy. They all mentioned (including the MD) that if I wanted to do a 1-2 year move to a bank to learn the skills my job would still be there for me after. Perhaps this was just my boutique but I think that a few with a modern mentality would do this.

  • Exit opps are great. This may not seem logical because an MM can be a better initial brand name but from my experience if in 3 years at the boutique you can expand the client list, venture into a new business area or have a serious impact on the bottom line larger firms will take notice. People from my boutique went to BBs, MBBs and PE funds because they were in an environment which allowed them to be rockstars. Sure, you can go from MM to BB but unless you really stand out they'll see you as 'another talented person looking to move up'. From the boutique you can be seen as 'the BD rockstar with loyal clients that will follow him and a person who knows more or less how to run a firm or at least part of it'

 

Absolutely on point with all of this. I would not move to a BB IB over the MM boutique I'm currently at, even if I was paid twice as much. The culture, team, and endless opportunities to have a significant impact on the firm's growth make the experience incredibly worthwhile (obviously these things vary on a firm-to-firm basis). In addition, I have the privilege of working in the city in which I was raised and truly love - a box that is very hard to check in the IB world (at least for me).

 

I worked at a 5 men shop with a huge dealflow (+/- 10 deals around $10M per year). My experience was so much better than what my friends at BB or EB told me as you get a lot of responsbility and as there is a very lean environment which allows to have a lot of interaction with clients and MDs. Moreover, as far as M&A is concerned, this is no rocket science and I don't believe that there is more complexity in $500M than $10M deals. 

IMO the biggest disadvantage of no-name boutique is the lack of prestige and the uncertainty as to the exit ops. Otherwise these are great places to work long-term! 

 

The prestigious boutiques aren't hiring - I've talked to some smaller ones - usually with a few outstanding MDs who left BBs (like 5-10 years ago, not start-ups in this environment) but not an established brand yet, and they're a lot more opportunistic about taking on additional people. I do have options to join those type of boutiques - since in most I'd be the only one of maybe 2 or 3 analysts, I'd work a lot with senior management and sometimes directly with clients. It's kinda hit or miss... staying in the BB is definitely safe, but I really think I'd learn more at one of the boutiques...

 

I've written about this before, but the main downside to going to a boutique is that it's much more difficult (if not impossible) to get into the largest PEs and HFs, because headhunters typically go straight to Analysts in the "top" groups when it comes to recruiting for those places.

So your exit opportunities will be more limited, unless you have some type of killer connection at a large fund.

Whether or not that is a deal-breaker is up to you; personally, I think way too much emphasis is placed on "prestige" in this industry. Especially at a time when so many people are out of work and when hiring is way down, that seems a bit silly.

I'm actually a little surprised that you're getting so little client interaction currently, because most BBs are much better about that.

But if that is your situation and there's no easy way to improve it, moving somewhere smaller might be a good move as long as 1) You can actually find one that's hiring (a lot of places say they are and continue interviewing people but don't actually hire anyone) and 2) You are fine with the trade-offs that come along with it.

 
dosk17:
I've written about this before, but the main downside to going to a boutique is that it's much more difficult (if not impossible) to get into the largest PEs and HFs, because headhunters typically go straight to Analysts in the "top" groups when it comes to recruiting for those places.

So your exit opportunities will be more limited, unless you have some type of killer connection at a large fund.

Well, if he's not getting deal experience, then aren't his options limited anyway?

Besides, there have been plenty of guys from not so prestigious boutiques who moved onto the smaller buy side shops.

Given this poster's interests, it seems that he'd like it at a smaller buy side firm anyway.


The world has changed. And we must change with it.

------------ I'm making it up as I go along.
 

I've been at a small regional boutique for the past three years. For most of my time I was the only analyst with three MDs. The managing partner is ex-MD at JPM and started the firm in late 90s. We do lower-to-middle market deals and we'll compete with Harris, W. Blair, Baird for deals (although its on the low-end for them). I have been a lot closer to the deals. I go on due diligence, interact with senior management, and sometimes I'll be at management presentations. I spend very little time doing pitch books. However, because we are a small firm, we have limited resources and I have to do all sorts of random crap. The Mergers & Inquisitions article is fairly spot-on.

Prestige and name recognition matters a lot for exit opps (I am tired of spelling the name of my firm to people). Learning is not that important when you're younger (there's not that much to learn anyways). Bankers don't really have to know that much to be successful. Its a sales job. At the smaller boutiques, success depends largely upon having a large professional network. You won't have a BB name to fall back on to attract clients.

IMO, do not leave the BB. Prestige is worth more than learning.

 
herbmonkey:
I've been at a small regional boutique for the past three years. For most of my time I was the only analyst with three MDs. The managing partner is ex-MD at JPM and started the firm in late 90s. We do lower-to-middle market deals and we'll compete with Harris, W. Blair, Baird for deals (although its on the low-end for them). I have been a lot closer to the deals. I go on due diligence, interact with senior management, and sometimes I'll be at management presentations. I spend very little time doing pitch books. However, because we are a small firm, we have limited resources and I have to do all sorts of random crap. The Mergers & Inquisitions article is fairly spot-on.

Prestige and name recognition matters a lot for exit opps (I am tired of spelling the name of my firm to people). Learning is not that important when you're younger (there's not that much to learn anyways). Bankers don't really have to know that much to be successful. Its a sales job. At the smaller boutiques, success depends largely upon having a large professional network. You won't have a BB name to fall back on to attract clients.

IMO, do not leave the BB. Prestige is worth more than learning.

i work at a firm that is exactly like what herbmonkey described. within my first year i attended countless pitches, client meetings, talked to senior management at client companies on a day-to-day basis, and had the chance to do some great/detailed modeling, as well as the the opportunity to understand deal structures and how one may work in a certain situation and not work in another situation. Essentially I have learned a boatload.

however at the end of the day, if i want to transition to pe it seems I will be very very lucky to land at a pe shop with aum above $500 million because no one has heard of the firm i work at. thats just the reality, and i am ok with it. if you are ok with that reality, then by all means come to the mm/boutique world.

 

Thanks to all for your inputs. Perhaps it's better at other BBs, but so far I've attended ZERO client meetings or due diligence sessions - all my deals are pitches that sometimes don't make sense and not even one VERBAL MANDATE. Prestige is important, but I feel like that depends on what you want to do. Right now I feel like my brain is being wasted. My target has always been MM PE shops anyway, and I feel like I'd rather learn some skills that are applicable to those positions.

herbmonkey - working with 3 MDs, did you learn about how they interact with clients, how they bring business, how to structure deals, etc.? You don't believe those are valuable enough to make you stay? You said you haven't done many pitches - does that mean your firm gets good deal flow?

I do agree that there are definitely advantages to being in a BB, but I'm not sure prestige is worth more than learning. I feel like you should learn as much as you can while you're young...and I'm not exaggerating when I say I feel like my brain is rotting away.

Any other inputs?

 

Bearing in mind that I'm still in college, how long have you been at your BB? Is there a chance of internal promote to associate, and presumably more responsibility and learning? The exit ops, I'm assuming, will be better from your BB than from a boutique, if you don't want to go on to associate. I suppose the first thing to ask is if you want to stay in banking, go to PE right after your analyst stint, or go to b-school right after your analyst stint. You might learn more at a boutique, but will you ever be in a position where those skills matter? The optimum solution should depend on your remaining time and your longer term goals.

 

I used to be in a similar situation to zip and herbmonkey. The great part is that I've built great relations with my former bosses and developed great skillsets from the job. I also met with a decent amount of client execs. for both private and public companies. This being said, all this is pretty overrated. Aside from the accountability pressure, no future employers will be impressed with what you did. Working with MDs will be useful in terms of receiving advice and learning the ins and outs of investment banking (i.e. seeing what types of personalities really excel, figuring out whether you'd like to be an investment banker, what an MD talks about over the phone and what kind of people he/she meets with, etc.) but it won't really help in terms of future jobs and building a network with peers. Plus, the work politics aspect can get annoying when you're constantly exposed to senior level people. You can exaggerate about what you did to future employers but you can't bs the name.

 

I believe that it all comes down to which boutique you work for. I am currently finishing up my analyst stint at a top MM and have learned more than anyone at a BB could ever hope to learn. I believe this knowledge is invaluable and was not only a key differentiator when interviewing for PE jobs, but will allow me to excel when I start this summer.

To elaborate: Deal flow matters, and it matters a lot. I've only lost two pitches and have closed multiple deals. Due to the current environment, I've also worked on a few deals that went through the entire deal process but had the buyer back out at the end. After your first couple of pitches, the learning curve levels off dramatically and you end up only learning bits and pieces on a particular company or industry. While this is nice, there is a LOT more to it.

Not only will you be more likely to work on deals at a strong MM / boutique, but the hands-on experience is leaps and bounds beyond that of a BB. I go to every meeting, without exception, and sometimes go to meetings alone. My senior guys call me in on almost every phone call and I'm often expected to participate. One of my teams allowed me to fly internationally on my own to facilitate plant tours between management and a number of buyers. I've gone to the country club with the CEO and CFO of a company I sold, on two different occasions, to grab a drink and just chat. In fact, I've become such good friends with the CFO that he offered me a job and we've made plans to meet up after I'm done as an analyst.

Not only is senior level / client interaction strong, but the knowledge base and skill set you pick up are great. I've assisted in the negotiation of purchase and sale agreements, drafted more offering memorandums than I care for, cold called PE firms and CEOs of $1+ billion corporations to garner interest for a client, and done a whole host of other things that have taught me so many different things. All that said, with great responsibility comes a great deal of BS. I don't have a production department that will churn out my charts and graphs for me, and I've had nights where I've stayed up late binding books after I've finished them. In addition, I'll be the first to admit that an analyst at a BB could run circles around me when it comes to both modeling and the intricacies of accounting. However, these are trade-offs that I'm more than happy to make.

I could go on and on about why I feel MMs are a better option than BBs, but I'll spare everyone the pain. To the original poster: Stick to where you are. You've likely been on the job for 8-10 months already, so any transfer would be very disruptive to your two years. Also, it is often the case that "the grass is always greener," and I wouldn't want to see you end up at a shop with no deal flow because you got unlucky or made a poor decision.

P.S. I recognize that I am an MM fan-boy. It's not that I believe working at a BB is a terrible experience, just that not enough people are open-minded enough to realize how great the experience is at the elite/strong MMs.

~~~~~~~~~~~ CompBanker

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/
 

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