Why don't more people stay in banking?

Background: banking for past 2 months
Question: why don't more people stay on for third year analyst stints rather than moving to PE?
Premise:
1. Banking is a more stable job than PE, albeit lower pay
2. Most PE programs are 2 years an out (even MM PE nowadays), then it's on to bschool - MUCH harder to get BACK into PE post-MBA; if you go back into banking post-MBA after failing to return to PE (apparently this happens more often than people think), you start as a 1st year associate and have lost on 4 years of career progression, 2 years of pay and 150k in tuition
3. 3rd year analyst+associate hours are much better than your first 2 analyst years - weekends work not very common and on average 12-14 hours a day
4. A 2 year analyst stint sets your up for success during your associate/VP years - huge edge over associates straight out of b-school
5. PE work is very similar but slower paced, focusing on fewer, smaller deals, for more time
6. Banking job gets a lot more interesting associate+

Comments (10)

Sep 15, 2013

Some reasons besides money, justified or not:

- Interest - desire to see deals from the other side of the table as an investor. Or the idea that you can get a better understanding (or at least, spend more time on understanding) of the industries/companies of interest, than skimming the surface just enough to put together a pitch or just taking the client's info/assumptions without question. Seeing what happens after the purchase (though, realistically, doing a 2 yr term in PE means most people won't see what happens to the deals they complete in PE unless they are able to stick around)

- Preference for working on fewer deals and seeing more of it vs. greater traction of a lot of deals/potential deals in banking. The slower pace can allow for better/more manageable lifestyle (depending on the PE shop) than having to deal with random daily fire-drills in banking

- Grass is greener - the belief the work could/should be: more interesting /rewarding /less BS marketing oriented/ that the hours would be better (at least for MM PE) / that maybe there's less assholes, etc.

- Burn-out - analysts are used as resources and after 2 years, you can be pretty jaded on banking. Even if it gets better at the associate level, it's still pretty rough

- Follow the herd mentality - everyone else is doing it. Just like the reason a lot of young monkeys went into banking in the first place

Sep 15, 2013

Associates work 12~14 days with limited weekend work? What type of bank/industry group are you in?

Sep 15, 2013

non-GS/MS/JPM BB, it's been a busy period for us and the 2nd and 3rd year associates work 10-midnight on average and I rarely see them in on the weekends... do your non-first year associates really have it that much worse?

Sep 15, 2013
confused23:

non-GS/MS/JPM BB, it's been a busy period for us and the 2nd and 3rd year associates work 10-midnight on average and I rarely see them in on the weekends... do your non-first year associates really have it that much worse?

I'm not in banking, but from what I've heard I was the under the impression that BB associates work closer to 80~90 hours. 10-midnight + limited weekend would put them at a little over 70 hrs on a "busy" season.

Do you work in a coverage group? Also, what do your vp/svp/md's hours look like?

Sep 15, 2013

I actually agree with you; sellside not for everyone? well so isn't the buyside. There is an old post by an MD outlining his reasons for staying in banking vs jumping to the buyside. I'll try to find it.

*Disclaimer: I fucking hated banking while I was an analyst and will not go back unless under severe circumstances.

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Sep 15, 2013

Found it: http://www.wallstreetoasis.com/forums/why-would-an...

Scroll down a bit and read the post by Genghiskhan

Sep 15, 2013
Mzz:

Found it: //www.wallstreetoasis.com/forums/why-would-an...

Scroll down a bit and read the post by Genghiskhan

Interesting.

In general I've found that when most people think a particular thing, that thing should be treated as highly suspect, because it's the result of groupthink and herd mentality, instead of actual thought.

I've never worked in investment baking, but it seems that most people view it as a chance to go somewhere else, but leaving right as the cookies are done and ready to be eaten only to start baking a new batch of sugary confections seems a bit like a hamster spinning the wheel.

Sep 15, 2013

That's a good find. Just conjecture but I imagine it would be extremely difficult to see the forest through the trees and stay in banking for the long term stability or any genuine potential interest when all 90% of your analyst friends are peacing for jobs that pay more for less hours (at least in the next 2 years)

But in the 2 year PE stint's defense, you probably learn much more in 2 years in PE after 2 years in banking, than 3 years in banking as an analyst and 1 as an associate. Would love to hear the perspective of someone who is currently in PE or has been through a 2 year PE stint

Sep 15, 2013

Do you guys prefer the sell side or buy side?

Sep 15, 2013
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