Why Should I Work in FIG Investment Banking?

To give everyone esp prosp. monkeys a background of myself. I just finished my 6 month placement internship at GS/MS/JPM in the FIG team with a FT offer based out of London. Some might say I am only a beginner, but the truth I have probably been in banking for as much time if not more than the 1st Year IBD analysts. I recently came across a lot of negative posts relating to FIG such as need to get out of there, too technical, dry and intangible.

I am here to give my 2 cents so that the prospective monkeys have a general idea of the sector.

Financial Institutions Group is a Techincal Group

Yes FIG is technical. I covered the traditional banks primarily focusing on emerging markets. In my 6 months, I was able to work on 4 deals (1 Recapitalization, 2 follow on offerings and 1 debt offering). I might not have done M&A but I was able to do more deals than other analysts with my point being that if you were to join FIG, you would have generally more exposure to a stronger deal flow than your peers in other coverage teams, which is what really counts, and buyside firms look at it favorably. You are exposed to valuations either in a restructuring or follow offering. For the debt deal to be honest, I ended up just making the roadshow presentation so nothing substantial there.

One form of techincal modeling that you will do in FIG is the dividend discount model. Check out a video about this below.

Will FIG Pigeonhole Me?

I don't think one can pigeonhole themselves by being in FIG. My take on this is that buyside firms generally know that most analysts are an excel/ppt processing machine, but FIG fine tunes your mind into understanding/appreciate the finer details. From what I have heard, 1-2 years as a FIG analyst will not "taint" you as a FIG banker. In fact, FIG's rep of being analytically driven etc may end up working to your advantage.

FIG Exit Opportunities from Bulge Brackets

My team is one of the best in London, and so is our counterpart in NY. HOWEVER, I would like to dispel the rumor that other BBs teams would not fare well in terms of exit options. Citi, UBS, DB, ML all have strong franchises in both London and NY. Most people tend to look at the wallet share to gauge an idea of how well the team is doing, but it happens that sometimes banks do deals for free just to maintain relationship. Your MD cares about the money but as an analyst all you should pay heed to is the modeling exposure that you might get. If a deal happens but your bank doesnt paid, you shouldnt care if you got a deal under your belt. Having said that, almost every BB I know of, their FIG team generates the highest % of revenue across the IBD division.

FIG Private Equity Placement

If you do end up remaining in FIG, you should have a decent chance of getting into the buyside albeit FIG. Why? Because there's a decent number of FIG related PE shops (though sovereign wealth funds are big into FIG stuff) and such shops can only hire or only look to hire analysts with FIG background. Every BB and boutique has a FIG team, but that's your only competition.

Some examples of FIG PE shops: Stone point Capital, JC Flowers, Oak Tree Capital, CVC are a few FIG PE shops that currently come to my mind, but there's a high number of shops out there.

If you are currently in FIG and not liking it, my recommendation would be to stick it out for atleast a year and then switch to a different coverage team. That way I believe you would have the advantage of knowing about one of the most specialized sectors (FIG) as well as a generic one (TMT, Consumer, Industrials) Better profile for PE.

Other Thoughts on Being a FIG Analyst

This might be a biased point, but FIG should position you well for b-school. If you are doing FIG in EMEA amidst European debt crisis, where all types of f**ked up s**t is happening with banks (debt deals, equity deals, massive recapitalization), you have sort of different experience to show off from the regular TMT, Consumer banker,

Read More About FIG on WSO

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Comments (108)

 
Jan 3, 2013 - 8:21pm

Newspeak:
I've seen a number of GS and JPM FIG guys transition to really good buyout shops. I also have talked to a couple FIG analysts at other places that really struggled to find buyside gigs.

Fair enough, but I think that can be said for any sector. Some people will make it while some don't. Other factors matter too for instance networking, and rankings bla bla.

One thing I have noticed about London is that networking is not taken as seriously as it is in the US. Those who do network in London usually do so because they are either well informed by reading up on forums like WSO or went to a non target uni and had to network hard to get a IB gig hence have the determination/drive....

But, I do want to know that those FIG analysts acquaintances of yours at BBs, were they able to secure interviews atleast at some buyout shops? That I assume should not be that tough. Screwing up the interviews is different.

 
Jan 3, 2013 - 8:38pm

Well, thanks for sharing. Can anybody else verify this info added above by "germany0" or add their own views on this? Primarily looking for views from ppl currently in the industry or were in the past.

Thanks.

Array
 
Jan 3, 2013 - 10:35pm

1. among the industry groups, FIG has the highest proportion of analysts interested in HF opportunities

2. GS/MS/JPM FIG analysts place just fine into buyout shops (GS FIG is a top group and a feeder into megafunds) but I have seen analysts at FIG at other banks have trouble placing at good shops, likely a combination of the FIG skillset and the quality/performance of the bank/group/analyst. EXCEPTIONS OBVIOUSLY EXIST but I have found my above statement to be the trend.

 
Jan 4, 2013 - 8:40am

ricottacheese:
1. among the industry groups, FIG has the highest proportion of analysts interested in HF opportunities

2. GS/MS/JPM FIG analysts place just fine into buyout shops (GS FIG is a top group and a feeder into megafunds) but I have seen analysts at FIG at other banks have trouble placing at good shops, likely a combination of the FIG skillset and the quality/performance of the bank/group/analyst. EXCEPTIONS OBVIOUSLY EXIST but I have found my above statement to be the trend.

Question: do they eventually get onto the buy side, or do they just end up remaining in FIG? Another possible option: corporate development or strategy at a fin. institution. The good thing I feel - though I am tooting my own horn here - is that once you do FIG for a couple of few years, you will always come across as an attractive hire to banks because you know their business inside out.

 
Jan 5, 2013 - 12:43am

ricottacheese:
1. among the industry groups, FIG has the highest proportion of analysts interested in HF opportunities

2. GS/MS/JPM FIG analysts place just fine into buyout shops (GS FIG is a top group and a feeder into megafunds) but I have seen analysts at FIG at other banks have trouble placing at good shops, likely a combination of the FIG skillset and the quality/performance of the bank/group/analyst. EXCEPTIONS OBVIOUSLY EXIST but I have found my above statement to be the trend.

1. And this is from all the data you've collected? Seriously, which ass did you pull that out of?

2. Agree, but I worked at a mid-tier BB FIG group and we would send plenty of people to very good MM firms (think GTCR, Madison Dearborn). Sure, if you are a GS FIG analyst you are set up well, but a good FIG analyst at a BB will have good opps, provided he's not an idiot and "gets it." It's not the pigeonhole people make it out to be, but outside of GS and maybe MS/JPM it's definitely more dependent on the quality of the individual. The fact is that most junior bankers are not really that smart; being in FIG just exacerbates it. (i.e. a mediocre GS TMT analyst will have *much* better opps than a slightly better DB FIG analyst)

 
Jan 5, 2013 - 12:48am

mrb87:
ricottacheese:
1. among the industry groups, FIG has the highest proportion of analysts interested in HF opportunities

2. GS/MS/JPM FIG analysts place just fine into buyout shops (GS FIG is a top group and a feeder into megafunds) but I have seen analysts at FIG at other banks have trouble placing at good shops, likely a combination of the FIG skillset and the quality/performance of the bank/group/analyst. EXCEPTIONS OBVIOUSLY EXIST but I have found my above statement to be the trend.

1. And this is from all the data you've collected? Seriously, which ass did you pull that out of?

2. Agree, but I worked at a mid-tier BB FIG group and we would send plenty of people to very good MM firms (think GTCR, Madison Dearborn). Sure, if you are a GS FIG analyst you are set up well, but a good FIG analyst at a BB will have good opps, provided he's not an idiot and "gets it." It's not the pigeonhole people make it out to be, but outside of GS and maybe MS/JPM it's definitely more dependent on the quality of the individual. The fact is that most junior bankers are not really that smart; being in FIG just exacerbates it. (i.e. a mediocre GS TMT analyst will have *much* better opps than a slightly better DB FIG analyst)

Are you doing FIG PE now? If not, what type of buyside role are you involved without being too much specific about your firm?

 
Jan 5, 2013 - 5:36pm

mrb87:
ricottacheese:
1. among the industry groups, FIG has the highest proportion of analysts interested in HF opportunities

2. GS/MS/JPM FIG analysts place just fine into buyout shops (GS FIG is a top group and a feeder into megafunds) but I have seen analysts at FIG at other banks have trouble placing at good shops, likely a combination of the FIG skillset and the quality/performance of the bank/group/analyst. EXCEPTIONS OBVIOUSLY EXIST but I have found my above statement to be the trend.

1. And this is from all the data you've collected? Seriously, which ass did you pull that out of?

2. Agree, but I worked at a mid-tier BB FIG group and we would send plenty of people to very good MM firms (think GTCR, Madison Dearborn). Sure, if you are a GS FIG analyst you are set up well, but a good FIG analyst at a BB will have good opps, provided he's not an idiot and "gets it." It's not the pigeonhole people make it out to be, but outside of GS and maybe MS/JPM it's definitely more dependent on the quality of the individual. The fact is that most junior bankers are not really that smart; being in FIG just exacerbates it. (i.e. a mediocre GS TMT analyst will have *much* better opps than a slightly better DB FIG analyst)

Wanted to ask my question again since you might have a better idea than the OP, being US based yourself. What types of options exist for someone having done 2-3 years FIG analyst at a FIG boutique- KBW/Sandler- obviously not placing into MF or larger MM funds like Madison Dearborn GTCR types, but is it possible (and more importantly is it common) for them to place into MM or lower MM PE? Thanks for the help.

 
Jan 4, 2013 - 11:31pm

I to be honest have not heard of them being big in EMEA, and I have abs. no idea how they place. I dont remember coming across any big FIG transaction in 2012 in which they were involved. Might be on smaller deals that do not makes waves.

 
Best Response
Jan 6, 2013 - 9:12am

Spent a couple years in FIG at a "top" franchise so will include some thoughts below as well as answer some questions in no particular order:

1. FIG can 100% have the impact of pigeonholing you. Anyone who does not tell you this is lying to you. That said, GS FIG places very well into large-cap PE and I believe some of the other top franchises (MS / JPM etc) do as well. The reason that this happens is doing FIG every day does not prepare you to analyze the more common businesses and industries (consumer, industrials etc). that the vast majority of PE firms like to analyze. Ask any FIG analyst when the last time they thought of working capital, accounts receivable, cash conversion cycle or even EBITDA (depending on what sector of FIG they cover) and I bet the answer will be "when we were in training." All this being said, FIG is extremely hard and if one can figure out how to model a bank recap (to the OP's point), analyzing an LBO on a consumer company is that much easier, though every industry has its complexities

2. FIG is divided into the following sectors (roughly as it differs from bank to bank): Banks, Insurance, Specialty Finance (think Discover, mortgage REITs, Sallie Mae), Asset Management and Financial Technology (exchanges, online brokers, market makers etc). The last two sectors are not balance sheet focused like the others so companies are valued off EBITDA not P/BV, P/TBV and P/BV and ROE regressions. I say this because getting placed in FIG and working in these sectors can yield a cool experience that reduces the pigeonhole effect of FIG (one can say that you work on FinTech not financials and fully understand EBITDA based valuation and hopefully get HHs to push you for non-FIG opportunities). Similarly, insurance (which is wildly viewed by both FIG and non-FIG bankers alike as leading to being pigeonholed the most) has a sub-sector for insurance brokers, which has had a lot of PE interest since it's very much EBITDA based (e.g. KKR just bought Alliant from Blackstone and Onex just bought USI). Point is, there are pockets within FIG that aren't 100% balance sheet focused.

3. A lot of inputs for models for LIFE insurers (or maybe it's P&C) are provided by actuaries, however I'd note that a lot of the valuation work I've seen in insurance focuses more on P/TBV and ROE regressions. This does not apply to any of the other sectors above though you'll get inputs on rates, curves, loan marks etc. from other product groups depending on what you cover

4. Not sure about exit opps from the Sandler and KBW (I guess Stifel now) firms but I know Sandler gets mandated on a lot of great projects (perfect example is the Getco - Knight reverse merger where they advised Knight) so take that for what it's worth

5. In terms of great FIG practices, would also mention that Evercore and Jane Wheeler do very well, primarily in the Financial Technology space. Would note they're building out their other practices but that stands out to me. RBC's banks team (led by Henry Michaels) also does some notable deals and their insurance practice hired Marc Berman from JPM a few years back so I think they would be at least decent

6. In terms of buyside opportunities, FIG analysts definitely do do other things (like the poster above me mentioned). I've seen FIG analysts who did banks or insurance go on to cover "normal" industries such as consumer or industrials. That said, pretty much all large funds look at FIG deals so if you have a FIG Background, it wouldn't surprise me that you'd be staffed on those projects. I know Warburg silos kids off into industry groups even during recruiting.

7. If you're in college thinking about summer analyst positions or anyone looking into banking, this is key for you. I would NOT do FIG at a non top tier franchise if you aren't sure you are comfortable with being labeled a FIG guy or gal. In my experience, once you are in FIG, recruiters etc. view you as a FIG person. Obviously at GS FIG for example, that's to your benefit but keep this in mind if you're looking at other places that don't give you such optionality. If you're not positive what you want to do post banking, I'd stick to your traditional coverage groups (industrials, consumer/retail, TMT, maybe healthcare though that has some stigma) and product groups (M&A, LevFin) to not potentially limit the scope of your exit opportunities

Key conclusion here is that being in FIG can pigeonhole you but if you're at a premier franchise, it's easier to break out than if you're not. Obviously these things do happen but i'm making a generalization for simplicity's sake. If you're at a decent but not top franchise, you may have to work a bit (or a lot) harder to get other opportunities but its not unreasonable. That said, if I were to sit here and say you can walk out of a mid-tier franchise and get a job at KKR doing consumer LBOs, i'd be lying to you. It's important to worry about being pigeonholed in an industry you don't like but if you find yourself liking financial services (or energy or real estate or any non-traditional sector), it may be to your benefit to continue working in the sector as there will always be a demand for a unique skillset.

Hope this is helpful.

 
Jan 6, 2013 - 10:22am

Bernanke23:
Spent a couple years in FIG at a "top" franchise so will include some thoughts below as well as answer some questions in no particular order:

1. FIG can 100% have the impact of pigeonholing you. Anyone who does not tell you this is lying to you. That said, GS FIG places very well into large-cap PE and I believe some of the other top franchises (MS / JPM etc) do as well. The reason that this happens is doing FIG every day does not prepare you to analyze the more common businesses and industries (consumer, industrials etc). that the vast majority of PE firms like to analyze. Ask any FIG analyst when the last time they thought of working capital, accounts receivable, cash conversion cycle or even EBITDA (depending on what sector of FIG they cover) and I bet the answer will be "when we were in training." All this being said, FIG is extremely hard and if one can figure out how to model a bank recap (to the OP's point), analyzing an LBO on a consumer company is that much easier, though every industry has its complexities

2. FIG is divided into the following sectors (roughly as it differs from bank to bank): Banks, Insurance, Specialty Finance (think Discover, mortgage REITs, Sallie Mae), Asset Management and Financial Technology (exchanges, online brokers, market makers etc). The last two sectors are not balance sheet focused like the others so companies are valued off EBITDA not P/BV, P/TBV and P/BV and ROE regressions. I say this because getting placed in FIG and working in these sectors can yield a cool experience that reduces the pigeonhole effect of FIG (one can say that you work on FinTech not financials and fully understand EBITDA based valuation and hopefully get HHs to push you for non-FIG opportunities). Similarly, insurance (which is wildly viewed by both FIG and non-FIG bankers alike as leading to being pigeonholed the most) has a sub-sector for insurance brokers, which has had a lot of PE interest since it's very much EBITDA based (e.g. KKR just bought Alliant from Blackstone and Onex just bought USI). Point is, there are pockets within FIG that aren't 100% balance sheet focused.

3. A lot of inputs for models for LIFE insurers (or maybe it's P&C) are provided by actuaries, however I'd note that a lot of the valuation work I've seen in insurance focuses more on P/TBV and ROE regressions. This does not apply to any of the other sectors above though you'll get inputs on rates, curves, loan marks etc. from other product groups depending on what you cover

4. Not sure about exit opps from the Sandler and KBW (I guess Stifel now) firms but I know Sandler gets mandated on a lot of great projects (perfect example is the Getco - Knight reverse merger where they advised Knight) so take that for what it's worth

5. In terms of great FIG practices, would also mention that Evercore and Jane Wheeler do very well, primarily in the Financial Technology space. Would note they're building out their other practices but that stands out to me. RBC's banks team (led by Henry Michaels) also does some notable deals and their insurance practice hired Marc Berman from JPM a few years back so I think they would be at least decent

6. In terms of buyside opportunities, FIG analysts definitely do do other things (like the poster above me mentioned). I've seen FIG analysts who did banks or insurance go on to cover "normal" industries such as consumer or industrials. That said, pretty much all large funds look at FIG deals so if you have a FIG Background, it wouldn't surprise me that you'd be staffed on those projects. I know Warburg silos kids off into industry groups even during recruiting.

7. If you're in college thinking about summer analyst positions or anyone looking into banking, this is key for you. I would NOT do FIG at a non top tier franchise if you aren't sure you are comfortable with being labeled a FIG guy or gal. In my experience, once you are in FIG, recruiters etc. view you as a FIG person. Obviously at GS FIG for example, that's to your benefit but keep this in mind if you're looking at other places that don't give you such optionality. If you're not positive what you want to do post banking, I'd stick to your traditional coverage groups (industrials, consumer/retail, TMT, maybe healthcare though that has some stigma) and product groups (M&A, LevFin) to not potentially limit the scope of your exit opportunities

Key conclusion here is that being in FIG can pigeonhole you but if you're at a premier franchise, it's easier to break out than if you're not. Obviously these things do happen but i'm making a generalization for simplicity's sake. If you're at a decent but not top franchise, you may have to work a bit (or a lot) harder to get other opportunities but its not unreasonable. That said, if I were to sit here and say you can walk out of a mid-tier franchise and get a job at KKR doing consumer LBOs, i'd be lying to you. It's important to worry about being pigeonholed in an industry you don't like but if you find yourself liking financial services (or energy or real estate or any non-traditional sector), it may be to your benefit to continue working in the sector as there will always be a demand for a unique skillset.

Hope this is helpful.


What do you mean when you say that healthcare has some stigma? I've seen HC analysts move over to PE/HF shops.
 
Jan 6, 2013 - 11:06am

Newspeak:
Bernanke23:
Spent a couple years in FIG at a "top" franchise so will include some thoughts below as well as answer some questions in no particular order:

1. FIG can 100% have the impact of pigeonholing you. Anyone who does not tell you this is lying to you. That said, GS FIG places very well into large-cap PE and I believe some of the other top franchises (MS / JPM etc) do as well. The reason that this happens is doing FIG every day does not prepare you to analyze the more common businesses and industries (consumer, industrials etc). that the vast majority of PE firms like to analyze. Ask any FIG analyst when the last time they thought of working capital, accounts receivable, cash conversion cycle or even EBITDA (depending on what sector of FIG they cover) and I bet the answer will be "when we were in training." All this being said, FIG is extremely hard and if one can figure out how to model a bank recap (to the OP's point), analyzing an LBO on a consumer company is that much easier, though every industry has its complexities

2. FIG is divided into the following sectors (roughly as it differs from bank to bank): Banks, Insurance, Specialty Finance (think Discover, mortgage REITs, Sallie Mae), Asset Management and Financial Technology (exchanges, online brokers, market makers etc). The last two sectors are not balance sheet focused like the others so companies are valued off EBITDA not P/BV, P/TBV and P/BV and ROE regressions. I say this because getting placed in FIG and working in these sectors can yield a cool experience that reduces the pigeonhole effect of FIG (one can say that you work on FinTech not financials and fully understand EBITDA based valuation and hopefully get HHs to push you for non-FIG opportunities). Similarly, insurance (which is wildly viewed by both FIG and non-FIG bankers alike as leading to being pigeonholed the most) has a sub-sector for insurance brokers, which has had a lot of PE interest since it's very much EBITDA based (e.g. KKR just bought Alliant from Blackstone and Onex just bought USI). Point is, there are pockets within FIG that aren't 100% balance sheet focused.

3. A lot of inputs for models for LIFE insurers (or maybe it's P&C) are provided by actuaries, however I'd note that a lot of the valuation work I've seen in insurance focuses more on P/TBV and ROE regressions. This does not apply to any of the other sectors above though you'll get inputs on rates, curves, loan marks etc. from other product groups depending on what you cover

4. Not sure about exit opps from the Sandler and KBW (I guess Stifel now) firms but I know Sandler gets mandated on a lot of great projects (perfect example is the Getco - Knight reverse merger where they advised Knight) so take that for what it's worth

5. In terms of great FIG practices, would also mention that Evercore and Jane Wheeler do very well, primarily in the Financial Technology space. Would note they're building out their other practices but that stands out to me. RBC's banks team (led by Henry Michaels) also does some notable deals and their insurance practice hired Marc Berman from JPM a few years back so I think they would be at least decent

6. In terms of buyside opportunities, FIG analysts definitely do do other things (like the poster above me mentioned). I've seen FIG analysts who did banks or insurance go on to cover "normal" industries such as consumer or industrials. That said, pretty much all large funds look at FIG deals so if you have a FIG Background, it wouldn't surprise me that you'd be staffed on those projects. I know Warburg silos kids off into industry groups even during recruiting.

7. If you're in college thinking about summer analyst positions or anyone looking into banking, this is key for you. I would NOT do FIG at a non top tier franchise if you aren't sure you are comfortable with being labeled a FIG guy or gal. In my experience, once you are in FIG, recruiters etc. view you as a FIG person. Obviously at GS FIG for example, that's to your benefit but keep this in mind if you're looking at other places that don't give you such optionality. If you're not positive what you want to do post banking, I'd stick to your traditional coverage groups (industrials, consumer/retail, TMT, maybe healthcare though that has some stigma) and product groups (M&A, LevFin) to not potentially limit the scope of your exit opportunities

Key conclusion here is that being in FIG can pigeonhole you but if you're at a premier franchise, it's easier to break out than if you're not. Obviously these things do happen but i'm making a generalization for simplicity's sake. If you're at a decent but not top franchise, you may have to work a bit (or a lot) harder to get other opportunities but its not unreasonable. That said, if I were to sit here and say you can walk out of a mid-tier franchise and get a job at KKR doing consumer LBOs, i'd be lying to you. It's important to worry about being pigeonholed in an industry you don't like but if you find yourself liking financial services (or energy or real estate or any non-traditional sector), it may be to your benefit to continue working in the sector as there will always be a demand for a unique skillset.

Hope this is helpful.


What do you mean when you say that healthcare has some stigma? I've seen HC analysts move over to PE/HF shops.

Have just heard that Healthcare can be viewed as a pigeonhole as well to some degree but definitely not to the extent of FIG or some other groups. Have friends that have moved over from healthcare IBD to PE (healthcare groups do tons of deals across products from what i have seen which means great deal experience) but think most are still doing Healthcare...just word of mouth / an observation.
 
Jan 6, 2013 - 12:55pm

The FIG analyst's skillset? (Originally Posted: 03/29/2009)

hi all,

i'm trying to understand is how m&a/coverage work will differ materially between FIG and other more traditional industry groups.

what i've gathered from this board is that a FIG analyst generally develops a modelling skillset that is somewhat atypical/specialized due to the complexity of the balance sheet and revenue streams in question. this is obviously helpful for placement into FIG focused funds like JC Flowers, but will it hurt placement to HF/PE in general?

thanks

 
Jan 6, 2013 - 12:57pm

Depends on what you are covering in FIG. The typical selling point that a group will give is "If you can model a bank, you can model anything".

Let's look at FIG as the culmination of several seperate industries. Those industries would be: Insurance, Exchanges, Clearinghouses / Processors, Banks, Asset Management, and diversified financials. While some of these industries are extremely complex (insurance for example) and might force you to develop a more specialized skill set, other industries such as asset management are actually EBITDA based. There are advantages to each type of industry.

In a specialized industry, your skill set is more unique and important. A fantastic insurance analyst is invaluable to the investment bank and is highly sought after by PE and HFs that are looking to invest in insurance companies.

If you are doing EBITDA based modeling, you have the advantage of not being stuck in one industry. Your skill set is applicable to all types of industries. Unfortunately, there are a lot more people in this world that can model an EBITDA business then pour throught the Statutory financials of an insurance company, analyze the actuarial estimates, and model an M&A consequences analysis for an insurance company.

Choose wisely if you have the option. FIG in general will not pigeonhole you in my humble opinion. It is also one of the only other groups (depending on bank of course) that handles its own M&A.

 
Jan 6, 2013 - 1:01pm

FIG is very archaic.

I personally really hate it, and I've worked on a handful of FIG deals, some which were pretty sexy deals at the time. I think its very boring compared to other industries in that you don't really get to give into a business/industry in FIG the way you do other industries. My first 1 or 2 FIG deals were interesting, and after that was just excruciating.

The "if you can model a bank you can model anything" argument is something you'll have jammed down your throat when they're trying to seal the deal on your offer.

In reality, a PE fund that focuses on X, Y and Z industry will typically only recruit people with banking experience in X, Y and Z industry. And ones that don't look for direct experience in their area of focus (not that common) will not necessarily view a FIG background above a traditional background. In addition, I would personally assume the non-FIG background is more transferable than FIG. That being said, when I was in college, for whatever reason I was under the impression FIG was fucking awesome.

From a Corp Development perspective, I don't see any advantage hiring a FIG-analyst for a non-FIG role. I do see an advantage of hiring the competing non-FIG analyst though.

If you're choose between FIG and something else, I would take something else. But if its FIG and nothing, its an obvious choice. Its also very dependent on the person, you could very well love FIG. Or you could just think its like every other area of banking.

A few practical examples... you'll have minimal exposure to:
- managing working capital
- margin drivers, margin pressure or margin growth (from a non-FIG standpoint)
- CapEx, R&D, etc..
- capital investment

Array
 
Jan 6, 2013 - 1:03pm

I'm in a generalist role in restructuring, although I've worked on several M&A deals. Because of the state of the financial markets there are a lot of financials in distress. I try my best to steer clear of them for the reasons I mentioned above. In addition, of all the deal experience I've had, even though a few of the FIG deals I've been involved in were sexy ones, I feel like it adds minimal value to my resume/deal experience.

Array
 
Jan 6, 2013 - 1:06pm

erm, from what I've read, You look at P / E and P / BV (Book Value) multiples rather than EV / Revenue,
EV / EBITDA, and other "normal" multiples, since banks have unique capital structures. You also pay more attention to bank-specific metrics like NAV (Net Asset Value) and you might screen companies and precedent transactions based on those instead.Rather than a DCF, you use a Dividend Discount Model (DDM) which is similar
but is based on the present value of the company's dividends rather than its free cash flows. You need to use these methodologies and multiples because interest is a critical component of a bank's revenue and because debt is part of its business model rather than just a way to finance acquisitions or expand the business.

 
Jan 6, 2013 - 1:11pm

bananaitis:
oops...

So DCM is not divided up into sectors, but products? In that case, I should have asked "what's some hot product groups within DCM"?

both he hottest product and sector group will not want you if you keep making up stupid comments like this

 
Jan 6, 2013 - 1:16pm

GoldwingX:
Hey noobs, yes, there can be a FIG group within DCM. Within your product groups, it's also typically divided by industry so there can be a FIG group within DCM. The reason why it's good is only BC someone is interested in the sector or the firm has good relationship with FIGs out there. Hope this helps!

Thanks. this is helpful.

 
Jan 6, 2013 - 1:20pm

What's the deal with FIG? (Originally Posted: 06/04/2014)

People seem to say it has bad exit options and go as far to say that it's not quite banking, but something entirely unique and different in terms of the analysis. Wondering what opinions people on here have of FIG; I'm a SA in FIG at a "lower-tier" BB (think Citi, DB, Barclays). Definitely don't want to stay in banking as a career, hence why I'm a bit frightened that I'm already pigeon holing myself in the job where you're supposed to not do that specifically...

I understand Goldman FIG is top notch but I got placed pretty poorly and so it seems like my group my suck or something. If non-elite FIG is that bad, then what are tips to lateral or switch group during the summer/ for full time?

"I did it for me...I liked it...I was good at it. And I was really... I was alive."
 
Jan 6, 2013 - 1:21pm

I'll leave it to some more experienced users discuss FIG and exit opps prospects. However, I will say that if you don't want to cover the same industry after this summer it isn't the end of the world. I have two friends from my same analyst class that got "stuck" in FIG for their SA stints and they had no problem lateraling for FT. One remained at the same mid-ranked BB (higher than those you listed) and switched over to another industry group after going directly to a FT superday. The other had a few options at different BBs of relatively similar prestige. The skills you acquire this summer may not directly translate over to a different industry/product group but an offer in hand will at least show you are competent enough to grasp some of the intricacies and nuances demanded by FIG coverage.

 
Jan 6, 2013 - 1:22pm

Just to add details, I'm wondering what sub-sector of FIG is best or M&A/classic banking experience. Seems there's a bunch of groups; Insurance, Asset Managing Exchanges and Fin Software, and Banks and other Financials. Of those three, which would you rather be in to make the most of the summer?

Did a search of FIG on here, it's looking grim..

"I did it for me...I liked it...I was good at it. And I was really... I was alive."
 
Jan 6, 2013 - 1:24pm

Exit ops aren't necessarily bad...it's important to keep in mind that you get a skewed view on WSO more often than not, and reality isn't always the same. Do you like FIG/the analysis, or think you will? For example, if you want to do PE and like FIG, you'd be perfect for a FIG focused PE fund or something similar....how could that be a bad exit op?

Even if you're not into FIG and want more traditional exit ops (which are why people bash FIG) you won't be stuck with zero opportunities if you're good at your job - a FIG rockstar at a bank will have better exit ops than an average analyst in another group in most cases. Plus as others said, you won't be stuck in FIG if you don't want to be. Just focus on getting the FT offer first, don't lose sight of your immediate (and very important) goal. Imagine how much easier it will be to lateral if you have a return offer vs. not having one at all.

Fintech (M&A for payment processing companies, for example) is one of the most "relevant" verticals

 
Jan 6, 2013 - 1:25pm

Carlyle is a Mega Fund. Go to their website and look up the Associate bios of their New York office Corporate Private Equity team. Out of the 17, two did IB in FIG, and neither is from GS, (One is from Barclays, and the other from BOAML.)

One advice to OP: Do your own research. Don't trust everything you read online.

Another advice: Groupthink is one of the worst things that can happen to someone in finance.

 
Jan 6, 2013 - 1:32pm

No experience in that space, but from what I've heard I would guess...
* Pros: specialized knowledge in an area not many people understand, arguably the most high-impact sector, strong modelling/financial analysis skills that make most other sectors seem simple by comparison (?)
* Cons: notoriously long hours, risk of being stuck in the FIG space (though not a bad thing if you're happy there)

 
Jan 6, 2013 - 1:33pm

A lot of the comments below depend on group structure, whether the team is organized as a FIG generalist or FIG sub-sectors.

Pros:
- as an industry, financial institutions sit at the heart of the macroeconomic picture and as such, the work you do is impactful within the industry but also to the broader picture at times (for example GE's recent announcements will ripple through everything from autos to healthcare, etc.)
- the client base tends to be the most sophisticated in terms of their understanding of finance so as a FIG banker, you typically have to have a bit more depth and understanding of the subject matter and analysis
- FIG is a very broad industry with exposure to many very different sectors and business models (banks, specfin, insurance are balance sheet oriented, financial technology and Asset Management more EBITDA//net income oriented) , as such, you gain a broader set of valuation and technical skills beyond the traditional methodologies/metrics
- due to the esoteric nature of parts of FIG, at a number of firms, coverage and M&A execution is all done out of the same team (I know everyone SAYS they do their own M&A but lets be honest...), only other team that might have as holistic an experience is real estate?
- general deal activity in the FIG space has been picking up/strong depending on sub-sectors (financial technology/specfin are very active, asset management has a steady flow, banks is getting better but still slow, insurance I have no idea)

Cons:
- if the program is not set up as a generalist program, you could potentially get stuck with a skillset that's perceived as less transferable (and I emphasize perceived, although that can be a hurdle that needs to be crossed if you're thinking of exits)
- it can get repetitive/boring especially in bank and insurance land (personal opinion)
- lots of work given point on sophisticated clientele needing greater depth in presentations/discussions

This is just general things I've observed but it really depends from firm to firm.

 
Jan 6, 2013 - 1:35pm

FIG and the Buyside (Originally Posted: 09/03/2011)

Understand that being a FIG analyst has been discussed ad nauseum in various threads but looking to get an updated view from a slightly different perspective. My questions are as follows:

  1. I know FIG analysts get hired by large PE firms on a regular basis but how common is it for a FIG guy / gal to get hired by insert name of PE fund to work on non-FIG deals?

  2. How easy is it to transfer from a non-EBITDA based FIG sub-sector (so anything but financial technology) onto the buyside?

Thanks in advance guys.

 
Jan 6, 2013 - 1:36pm

In my experience, the breadth of options afforded by working in FIG directly correlates to the "prestige" of the FIG group you worked in, as ridiculous as that sounds. Goldman FIG could get you into KKR easily enough. BAML FIG? Not so much. Not to say it doesn't happen, but worse FIG groups tend to place people into FIG specific PE funds.

This holds for non-EBITDA roles as well. It will be tough to go from a non-EBITDA based sector to a generalist buyside shop. However, FIG-focused funds are more than happy to take people with non-EBITDA focused experience. JC Flowers and, to a lesser extent, Lightyear and Stone Point are the major financial institutions-focused funds.

As for what you do on the buyside, it depends on just how involved your fund is in financial institutions. You will probably be called upon if your firm is doing a financial institution buyout, but they won't have you sitting on your hands if they aren't active in that space.

Also, some guys in FIG go to work for clients, as in asset managers and insurance.

 
Jan 6, 2013 - 1:37pm

FIG, a different animal? (Originally Posted: 11/07/2013)

How does Fig differ from other groups? What might be different in valuation? Is it typically limiting to enter as an analyst within a FIG group? Is it different firm to firm? Any guidance is much appreciated.

 
Jan 6, 2013 - 1:39pm

Valuation will depend on the company. A lot of people assume that FIG = banks. FIG has banks, insurance, Asset Management, exchanges, broker/dealers, financial technology, etc. Some of these companies, like banks and insurance companies, are very unique animals and use valuation methods that differ from your run-of-the-mill DCF/EBITDA comps. Other institutions, like asset managers and payment processors, are still cash flow-driven. They still used DCFs, EBITDA multiples, etc.

 
Jan 6, 2013 - 1:40pm

Opinions on FIG (Originally Posted: 04/24/2008)

In the process of choosing groups for SA at BB.

What does everyone think of financial institutions group?

definitely seems like a lot of activity, should be a very busy summer. I've also gotten the impression that people perceive it as a more quantitative group. How are exit ops from FIG? Would you recommend starting in FIG rather than a more vanilla industry group such as consumer/retail/etc.

Thanks!

 
Jan 6, 2013 - 1:45pm

Delirium2:
Exit opportunities are not as great as M & A or more generic industry groups.

This is correct.

While the term is over-used on this site, analysts in FIG do tend to get "pigeon holed" given their relatively specialized skill set. Of all the ex-bankers that we've brought on as associates over the past three years, only one has come from FIG.

 
Jan 6, 2013 - 1:46pm

I've heard in speaking to people that exit opportunities are as good or better as FIG is perceived as a more quantitative group. Also, in terms of specialization, I've heard FIG bankers can do generic modeling as well as FIG modeling and thus should not be "pigeon holed." were they trying to sell me or is this valid?

 
Jan 6, 2013 - 1:47pm

ksf43:
I've heard in speaking to people that exit opportunities are as good or better as FIG is perceived as a more quantitative group. Also, in terms of specialization, I've heard FIG bankers can do generic modeling as well as FIG modeling and thus should not be "pigeon holed." were they trying to sell me or is this valid?

Probably a little bit of both. I don't doubt that they could easily learn more generic modeling, since consultants with no finance experience pick this up relatively quickly.

However, from the associate interviews that I've conducted, I think a lot of the pigeon holing comes from the fact that FIG analysts fundamentally look at businesses in a different way. Sure, one could be taught more traditional business perspectives, but this takes time. I also believe this causes FIG analysts to come off as less impressive when given the standard set of questions asked of ex-bankers during PE interviews.

 
Jan 6, 2013 - 1:56pm

FIG Banking - Group different from other industry groups? (Originally Posted: 02/09/2007)

Do you have any info about FIG groups? Is the group very different from other industry groups? Are they busy now? What area? Exit opps? Type of bankers (personality, very technical?)? Any info about FIG in general would be great. Thanks.

 
Jan 6, 2013 - 1:57pm

FIG is certainly different from other industry groups. Some general pointers:

  • Typically FIG groups do M&A inhouse

  • Usually work with advanced financial products earlier than other industry groups

  • Valuation analysis (DCF, comps etc.) is different from other Industry groups

  • Exit opportunities are pretty good. Since you work with sophisticated clients you learn a lot in FIG. HF/PE firms/Banks recognize the fact that it is easier to move from FIG to another industry group than the other way around (later in your career)

  • Can offer a lot of variety in work flow. You can work in various sectors (Insurance , Banks, Sponsors, Asset Management, Specialty Finance etc.)

  • FIG in general is less cyclical. When M&A is hot then you work on lot of M&A, when it is a lot interest rate environment - you work on lot of debt programs and offerings, when times are really bad you work on lot of balance sheet restructuring.

 
Jan 6, 2013 - 2:10pm

FIG gives a "niche" skillset and isnt applicable to a wide range of industries in comparison with other coverage/product groups like M&A. Thats why exit ops are deemd to be more limited than M&A, sponsors, etc. That being said, there are decent exit ops and I know of analysts placing into HFs.

 
Jan 6, 2013 - 2:14pm
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