Why would any associate+ banker choose a BB over EB?

I totally get the brand name argument as an analyst planning to exit, but what perks do being at, say GS/BAML/Citi, etc offer over the EBs in the long run? Looking at the bonus thread, EBs clearly pull a significant amount more in the long run at the associate to MD levels. From a reputation within the industry standpoint, I'd think being somewhere like Evernote is pretty comparable to GS when looking for deals, and you'll make millions more over the course of your career.

Why doesn't every senior banker at BBs just jump to EBs?

Comments (83)

 
Feb 22, 2021 - 2:06pm

It's the suite of products. EB is primarily selling M&A, while a BB sells M&A, ECM, LevFin, Prime Brokerage Services, etc. People choose BB over EB because it can be hard to make a career as an EB banker if you're only offering M&A to a client, while the banker at JPM can offer everything the bank does and is a one-stop shop. More products = higher likelihood of business 

 
  • Analyst 1 in S&T - Equities
Feb 22, 2021 - 2:14pm

Bingo...and plus at senior levels you are selling balance sheet to a captive audience. I know that's what you were getting at, but there's basically never-ending demand. 

 
Feb 22, 2021 - 2:56pm

Yes but it's also not as simple. Those clients may be loyal to the BB due to the balance sheet, they may already be covered by the EB's existing senior people, will the EB feel confident in your M&A execution if you're doing this on the earlier side, how much deferred pay will you need to give up?

In theory, climbing the ranks at a bulge then moving to EB makes sense but there's always risk and trade offs

 
Controversial
  • Associate 1 in IB - Gen
Feb 22, 2021 - 2:55pm

Its significantly easier to build a book of business as you move through your VP years if you can offer other products and financing as opposed to pure M&A where you just have to email some guy with your great idea. Look at the investor presentations for top EBs like EVR or Moelis, they literally brag about trying to close in on 50% of MDs being internal promotes. Close to 100% of BB MDs are internal promotes. From a career development standpoint, its "easier" to move up in a BB than an EB

Additionally, past your first associate year its easier to move from a BB to an EB (you know M&A in addition to other products) as opposed to moving from an EB to a BB (you only know M&A). 

The dream scenario is to make MD at a BB, where you can have steadier and more predictable career growth, and then take an exit as an MD to an EB, where you get paid a lot more and can even make money as a percentage of the deal. 

At strong MBA programs, people turn down EVR for BofA, or Guggs and Moelis for Citi, all the time, although you probably wouldn't see anyone trade down from a top EB to a Barclays for example. Tends to be a lot of gravity toward the American BBs because they have more balance sheet due to capital ringfencing requirements.

Interestingly, I think you have it totally backwards. Analysts choose EVR over a BofA and a Guggs or Moelis over a Citi due to the M&A and modeling reps they will get that will help them with PE recruiting, as opposed to working on products that may not be as applicable. PE recruiters dont really have a "brand name" problem with top EBs. Associates don't really think that way due to remote possibility of top PE exits. Also note, almost none of what I said applies to CV, which promotes internally quite well. 

 
  • Analyst 2 in IB - Ind
Feb 22, 2021 - 5:16pm

Good points with one common issue on this forum: People in real world care way less about "Prestige" than kids on WSO.

Bankers won't just look down each other because my bank is ranked two spots higher on WSO than your bank, you can have great exits from many of the places you mentioned without being constantly insecure about pedigree. Even PE/HF won't be like "we are not gonna hire you since you are at Barclays vs. Citi, you must suck and are a failure at recruiting." On a related note, Banks like CS, RBC, UBS are great places to be and well respected by wall street folks. I have no clues why college students would feel superior about sh*ting on them. Let's all stop these repetitive and meaningless rankings.

Disclosure: I don't work at any banks aforementioned.

 
  • Associate 2 in IB-M&A
Feb 22, 2021 - 9:15pm

1. No, EBs pay more because they run much leaner, are more specialized and don't have the bloat of BBs with several business lines. Look at the fees per banker at EVR, PJT, CVP, etc and compare it to BBs. They can afford to pay more and they want to attract talent. 

2. It's not hard but it is rare. The traffic is way heavier going the other direction. There are a lot of associates at BB that want to lateral to an EB and there just aren't many associates at EBs that want to leave and do banking at a bulge bracket.  

 
  • Prospect in IB - Gen
Feb 23, 2021 - 2:57am

Bump on this. Especially the MD part. From what I've noticed, lots of the MDs that made the switch from BB to EB were already major players already. 

 
  • VP in IB - Gen
Feb 23, 2021 - 6:25am

 

Its significantly easier to build a book of business as you move through your VP years if you can offer other products and financing as opposed to pure M&A where you just have to email some guy with your great idea. Look at the investor presentations for top EBs like EVR or Moelis, they literally brag about trying to close in on 50% of MDs being internal promotes. Close to 100% of BB MDs are internal promotes. From a career development standpoint, its "easier" to move up in a BB than an EB

Additionally, past your first associate year its easier to move from a BB to an EB (you know M&A in addition to other products) as opposed to moving from an EB to a BB (you only know M&A). 

The dream scenario is to make MD at a BB, where you can have steadier and more predictable career growth, and then take an exit as an MD to an EB, where you get paid a lot more and can even make money as a percentage of the deal. 

At strong MBA programs, people turn down EVR for BofA, or Guggs and Moelis for Citi, all the time, although you probably wouldn't see anyone trade down from a top EB to a Barclays for example. Tends to be a lot of gravity toward the American BBs because they have more balance sheet due to capital ringfencing requirements.

Interestingly, I think you have it totally backwards. Analysts choose EVR over a BofA and a Guggs or Moelis over a Citi due to the M&A and modeling reps they will get that will help them with PE recruiting, as opposed to working on products that may not be as applicable. PE recruiters dont really have a "brand name" problem with top EBs. Associates don't really think that way due to remote possibility of top PE exits. Also note, almost none of what I said applies to CV, which promotes internally quite well. 

I have never seen any associate turn down an EB for any BB below GS/MS or occasionally JPM (less common). At my EB, the only BB we lose more than 33% of our head to head recruiting offers too is GS

Also, the only people at BBs who know how to do M&A are the ones in the M&A groups - and unsurprisingly, they don't have any differentiated knowledge about other products. Every time I've dealt with a coverage group associate in an M&A process from a BB, it was worse than dealing with my first year analysts. They all have bad habits and know absolutely nothing, which at least the analysts don't have bad habits yet. My bank has taken several lateral coverage VPs / Directors from MS/JPM, and they all fizzle out because they have to be dual staffed because they are basically dead in the water anytime a deal actually happens. And at an EB, if you can't execute, you'll need to be that much better at coverage because you're literally a negative to the firm as a day to day worker. And the only ones who tend to survive that are the guys with strong Rolodexes already (so not your junior MD or VP that laterals, but your Group Head). 

Also your point about there being 100% MDs home grown at a BB vs the EBs is aggressively dumb because EBs have been around for, on average, ~15 years. Obviously no 5, 10, 15 or 20 year old bank is going to be primarily home grown MDs. How many classes have gone through that have eligible MD promotes vs. number of MDs at any one of these? Unsurprisingly, it's roughly proportional with number of home grown MDs. 
 

There are reasons to choose different platforms depending on what you want and what you excel at, but your post is not it. 

 
  • Associate 1 in IB - Gen
Feb 23, 2021 - 9:12am

Thanks for replying. You probably have a better perspective as a VP. I think you may be correct if you are at PJT, which to my knowledge nobody from my MBA program. has turned down (although they also give very few offers) but the other EBs off the top - EVR, LAZ, MC, Greenhill, PWP. All of those lost candidates to non GS/MS/JP in the last few years from my MBA program. We did have not have anyone see a CV offer so you would probably be 100% correct with CV as well. 

I see your point about the home grown MDs. But EVR has been around 25 years and is still way less than 50% (looks like 70/37 split for 2020 SMDs in advisory). I tried to poke through Lazard's 10-k because they would obviously be the best case study after being around forever but they dont appear to break out. The only thing I found was a news article about their London office not promoting a single MD in over a 3 year stretch. 

To your point about coverage MDs not being ready to execute. Some other comments in this thread seems overly optimistic about moving from a BB to an EB after starting in a BB as an associate. I agree with you that this could in general be a very bad idea/career move for the reasons you laid out. 

 
  • Intern in IB - Ind
Feb 23, 2021 - 1:52pm

Just finished banking recruiting at a top MBA - not a single person turned down a top EB for GS/MS/JPM, let alone C or BoFA...

 
  • Associate 1 in IB-M&A
Feb 24, 2021 - 5:48am

Some fair points, but from which "strong MBA programs" do kids turn down Evercore for BofA?? This is virtually unheard of at Wharton, CBS, Chicago Booth and other similar top 5 programs. I can pretty much guarantee you that kids at the top 5 or top 7 will choose Evercore over JPM/MS (let alone BofA/Citi) 9 out of 10 times. Just one guy I know chose GS over Evr and that was due to a relatively specialized sector coverage reason.

And speaking from first-hand knowledge, almost no BB has close to 100% MDs as internal promotes. There are a lot of laterals between both BBs and EBs and BBs, and a JPM/MS healthcare group that I was part of only had 70% homegrown MDs. I can think of at least 5 GS TMT MDs who came from other BBs, EBs, and even MM banks like Jefferies and HSBC.

In terms of building a book of business, this really doesn't concern you until mid-VP level. And banks like Evercore these days are often involved enough in IPO, ECM and DCM for juniors to get enough "technical" experience from these products. 

Bottom line, most of these factors shouldn't sway Associates' decision on EB vs BB. Go to the firm where you vibe well, has strong deal flow and pay accordingly.

 
Feb 24, 2021 - 1:01pm

Hmm, haven't really seen MBAs turning down Evercore summer associate offers for BofA but could just be me. Recently graduated from M7 MBA program and was part of the IB club while at school so seen the data. no one from Class of 2019 through Class of 2022 turned down Evercore for non-GS/MS BB. But yes, agreed Guggs and Moelis are more fair game. Not saying EB is better than BB. Just sharing what I know. 

Think part of the reason is EVR has consistently run most successful D&I campaigns in my program (aka $$$).     

Array
 
  • Summer Associate in IB - Ind
Feb 25, 2021 - 11:13am

I think these points are mostly right but with the big caveat that not all "EBs" are equal and everyone's situation is different at the MBA level.  All of Evercore, Centerview, PJT, Lazard, Moelis, Guggenheim, Perella, Raine, Greenhill, whoever are each viewed very differently.  I am close to recruiting at one of Wharton/Booth/Columbia and can guarantee that for us, GS is unequivocally still the most sought after bank (maybe 1 person per year turns them down)  

Looking at cross offers at the MBA level is also not always very relevant because a lot of the banks play games with keeping yield high, which is a big factor at least at our program these days - many of the banks want to be absolutely sure you will take the offer before making it.  My impression has been that the EBs can be even more focused on yield just because they have smaller classes, but again, each is pretty different on this. they tend to limit cross offers with GS/MS but where they do, it will depend on the person and EB.  Evercore/PJT might edge out MS but the others might not.  We have also seen people choose Lazard over BAML/BAML over Lazard, JPM over Guggenheim/Guggenheim over JPM, CS over BAML/BAML over CS, CS over Guggenheim/Guggenheim over CS, etc. etc. and at a certain point if its not GS/MS/Evercore, there are so many preferences related to coverage groups, diversity, and fit that become a factor.  

I will say that I have mostly not seen comp be the biggest factor in decision making for most people.  A combination of trying not to hate your life and getting the "best" bank/coverage group seems to be most of what people are weighing.  Becoming an MD sounds nice, and obviously, there are a ton of MDs from these 3 schools, but really, people think a little more just about the next 3-5 years.  There is a view that if you have never worked in banking before (most of us at MBA), you could very easily hate it, burn out, and want as many options as possible to exit to a cushy corp dev job or something else, so BB is appealing for that too.  BB also gives you a bigger team to work with and bigger immediate network.  We've seen more alumni start at a BB and later go to EB than the other way around, but who knows what that really implies.  There is also a view that the EBs on average probably keep longer hours, but again, this probably depends on the group and we certainly don't know from first hand experience.  Others say fuck it, for 3-5 years, I want to only do M&A and do not want to be a cog in the machine, and that's obviously a fair view too

Whether we will all look back on this and all change our views, I have no idea, but this is generally my impression of how the MBAs I have seen decide

 
Feb 26, 2021 - 2:43pm

That's how everyone thinks of it until you hit the desk and bonus season rolls around. Then every Associate 1 and up is chattering about what their buddies got at X, Y, or Z bank. You're content, because you're a stub and stub bonuses aren't especially high or differentiated. By the time your Associate 1 bonus hits you're hearing all of the same chatter but the gap is more impactful AND you're probably over the novelty of the job. I think MBA students are trained to ignore money because their finance clubs tell them not to talk about it and because WSO is analyst centric. For analysts it legitimately doesn't matter and should be a tertiary consideration at best, so that advice rubs off on MBA candidates too.

 
  • Summer Associate in IB-M&A
Feb 22, 2021 - 3:06pm

I don't think there is a "right" answer between BB and EB. There are many hypothetical career paths that could work in banking. I just went through MBA recruiting and everyone recruited for both BB and EB. Those pivoting from a non-finance background were often more attracted to the idea of pegging a BB name to their resume. 

The canned answer that I heard during associate recruiting is what was said in earlier comments: a full suite of products, strong infrastructure (training, support, etc.), and longstanding relationships (often facilitated through balance sheet). One of the hidden answers is that incoming associates recognize that after a number of years they will burn out and exit. In those cases, a BB name might make the exit easier (particularly if it's an exit to a non-finance sector where there is little to no knowledge of EBs). Most importantly, it's much easier to establish a career as a banker at a BB where you have a balance sheet and trading desk to lean on (gimme those IG DCM fees plz). 

FWIW, it seemed to me that the majority of people who were fortunate enough to choose between an EB offer and a BB offer went for the EB, with the exception of those who could not resist the allure of the GS/MS/JP brand. But that's only based on the sample size of my class. I know alum who chose a Citi/CS/BAML over EBs as well and are happy with their choice. The additional comp and reduced beaurocracy at EBs is well known by those who are recruiting. I personally went EB but that was just my decision. I have peers who have legitimate rationale behind pursuing BBs instead.

 
Most Helpful
Feb 22, 2021 - 4:03pm

Saying EB bankers only work on M&A is a gross simplification. Products I've worked on include M&A, restructuring, recapitalizations, activist advisory, debt/equity advisory, etc. The only thing EBs don't principally do is underwrite but given the proliferation of private debt, PIPEs, etc., a lot of revenues for EBs are increasingly coming from intermediating the placement of debt or equity directly with companies. You develop a great skillset on the capital structure side as well (arguably better than generic DCM goups that do investment grade bond offerings) once you've had some exposure to more complicated restructurings/recaps.

The other thing that is evolving quickly (and that EBs are very good at) is SPAC transactions which are changing the way companies are taken public. Aside from bookrunning the actual blank check company, EBs have great platforms with their M&A advisory to effectuate these transactions. I think you'll see more and more of these going forward as it is simpler and faster vs. the IPO process (which requires a bunch of regulatory hurdles and steep valuation discount).

 
  • Associate 2 in IB-M&A
Feb 22, 2021 - 4:55pm

Appreciate the perspective and this definitely is rooted in reality. I think this is overstating the experience of an associate at an EB. Over time, all this other work may create a deeper impact on an Associate's experience, but I don't think that's the case today.

EB's still have silo's that handle rx, activist advisory, equity/debt advisory, etc. BBs have those silo's with capital markets products, but at a BB (speaking from personal experience) you get smarter on those other products than you would at an EB.

I haven't seen EBs advising on SPAC transactions in my sector. These deals are unique from vanilla M&A and, today, not in the wheelhouse of EBs. But I also wouldn't be surprised if you'll see boutiques hire SPAC M&A bankers later this year, assuming this trend continues.

 
Feb 22, 2021 - 5:01pm

Quaneaser

Saying EB bankers only work on M&A is a gross simplification. Products I've worked on include M&A, restructuring, recapitalizations, activist advisory, debt/equity advisory, etc. The only thing EBs don't principally do is underwrite but given the proliferation of private debt, PIPEs, etc., a lot of revenues for EBs are increasingly coming from intermediating the placement of debt or equity directly with companies. You develop a great skillset on the capital structure side as well (arguably better than generic DCM goups that do investment grade bond offerings) once you've had some exposure to more complicated restructurings/recaps.

The other thing that is evolving quickly (and that EBs are very good at) is SPAC transactions which are changing the way companies are taken public. Aside from bookrunning the actual blank check company, EBs have great platforms with their M&A advisory to effectuate these transactions. I think you'll see more and more of these going forward as it is simpler and faster vs. the IPO process (which requires a bunch of regulatory hurdles and steep valuation discount).

I think you think you know all these products super well (you still have product groups who will execute them and have the true expertise) but you lose a lot by not actually talking to market participants.

I say that as someone who's seen both sides.

 
Feb 22, 2021 - 5:09pm

SnappleApple

Quaneaser

Saying EB bankers only work on M&A is a gross simplification. Products I've worked on include M&A, restructuring, recapitalizations, activist advisory, debt/equity advisory, etc. The only thing EBs don't principally do is underwrite but given the proliferation of private debt, PIPEs, etc., a lot of revenues for EBs are increasingly coming from intermediating the placement of debt or equity directly with companies. You develop a great skillset on the capital structure side as well (arguably better than generic DCM goups that do investment grade bond offerings) once you've had some exposure to more complicated restructurings/recaps.

The other thing that is evolving quickly (and that EBs are very good at) is SPAC transactions which are changing the way companies are taken public. Aside from bookrunning the actual blank check company, EBs have great platforms with their M&A advisory to effectuate these transactions. I think you'll see more and more of these going forward as it is simpler and faster vs. the IPO process (which requires a bunch of regulatory hurdles and steep valuation discount).

- expand -

I think you think you know all these products super well (you still have product groups who will execute them and have the true expertise) but you lose a lot by not actually talking to market participants.

I say that as someone who's seen both sides.

Definitely won't say I know all of these super well but certainly enough to sound intelligent and know when to leverage product/specialist teams as needed. My point was more broadly that our dialogue with clients is definitely not limited to showing them M&A targets and scenarios. We talk about all sorts of products and offerings during client conversations. Having people believe that an EB's offering is limited to M&A while BB's can offer a massive suite of services is just factually inaccurate in the current environment and how EBs have evolved.

 

 
  • Associate 2 in IB-M&A
Feb 22, 2021 - 4:54pm

Considering that something like 80% of post-MBA bankers leave banking by the time they would be nearing director, and 50% are out even before the VP promote, it's a head scratcher that people take a pay cut for a BB. I guess people convince themselves they're going to be a banking rainmaker, but life happens and even bankers are shit at accurately assessing their own outcomes and long term plans.

 
Feb 22, 2021 - 4:57pm

 

Considering that something like 80% of post-MBA bankers leave banking by the time they would be nearing director, and 50% are out even before the VP promote, it's a head scratcher that people take a pay cut for a BB. I guess people convince themselves they're going to be a banking rainmaker, but life happens and even bankers are shit at accurately assessing their own outcomes and long term plans.

Not all decisions are made based upon comp.

 
  • Associate 2 in IB-M&A
Feb 22, 2021 - 5:27pm

I just don't buy the brand recognition of a BB over actual EBs. And for that, you likely gave up hundreds of thousands that would have compounded over a lifetime. To laymen, sure, I get it, but if you're exiting banking and even finance it's pretty safe to assume that you're not take an FP&A role at a small family business in Des Moines, IA. Everyone who is anyone at a decent sized company is generally aware of Evercore, Lazard, Centerview, Moelis, etc., and they're also pretty easy to Google.

I kinda get the thought if you're dead set on being a CFO or something, as having the capital markets experience is worthwhile, but EBs do a lot of that kind of work, at least on the advisory side (I know, because at my EB we've thought about optimal times for a follow-on raise for a client, etc.). Other than that, it's a hard sell, but of course I'm biased.

 
  • Intern in IB - Ind
Feb 24, 2021 - 12:27am

 

Considering that something like 80% of post-MBA bankers leave banking by the time they would be nearing director, and 50% are out even before the VP promote

I see this posted a lot but is this even true?  I can see where every person landed at my M7 back about 7 years and the overwhelming majority (literally everyone but 4-5) of people that landed banking offers are still there.  This is not through LinkedIn I have an actual document with hundreds of names from different class years (I'm sure every school has this type of thing)

 
Feb 22, 2021 - 6:36pm

Brand is not a very good argument unless you exit the finance industry in which case yes a bulge bracket bank (ever a lower tier one) will at least have some recognition amongst non-finance folks.

 

I'd say the actual difference is in breadth of experience (primarily in financing) which is often looked down upon by juniors on this forum because they're hell bent on buy-side which values M&A.

 

 
Feb 22, 2021 - 8:24pm

I think people here have covered it pretty well, but to reiterate: it is hard to make a living as a VP/MD at an EB bank. The reason they've been so successful, especially in recent years, is that they've poached rockstar MDs from BBs with existing client relationships. If you're a VP (or even a green MD) at an EB, good luck getting a client to trust you to advice them on any sort of M&A deal when they can turn to someone they've had a decades long relationship with. It's much easier to build that relationship over time if you can participate in their revolver, joint bookrun debt/equity offerings, offer some sort of derivatives, etc. 

I'm pretty far removed from that world so this may not be accurate, but a solid career path to me would be to start at an EB and lateral over to a BB as a mid/senior VP. That way you can take advantage of the pay differential, better intense technical M&A reps, and more client contact before getting to a spot where you can leverage the rest of the BBs products to start building relationships. 

 
  • Prospect in IB-M&A
Feb 22, 2021 - 11:13pm

Great insight by multiple commenters on this post. I'd say most students don't know the realistic work/product differences between BB and EB, and these comments are incredibly helpful.  

 
  • PM in HF - EquityHedge
Feb 23, 2021 - 3:25am

I would argue BB makes no sense at junior levels, but it evens out (and eventually flips) as you near partner. 

 
Feb 23, 2021 - 8:29am

From an exit ops perspective, IMO BB rep outside of the 'finance world' helps a lot if you're thinking of leaving the sector altogether. Most people I know are aware that JPM/GS/MS/CS etc. exist, but may have difficulty in naming more than one or two EBs. I am guessing this helps out significantly when jumping to a completely different sector (especially if you're moving to a country which doesn't have a major world-renowned finance hub). Within finance, I think its highly debatable whether BB or EB bankers are more attractive (especially at a junior level). 

 
  • VP in IB - Ind
Feb 23, 2021 - 1:19pm

Regardless of EB or BB, it's just hard build relationship from scratch with large cap or even middle cap public companies. So many banks are around and so many will do financing for them, you won't get c suite exposure easily. Differences happen if one of the mid level guys you worked with move up, or like anything in banking - someone recommends you or you know the guy from MBA or something. 
 

The best window to build the relationship is getting the sell side when it moved up from MM banks and sell it to a large PE and be around the IPO. Or be at IPO period. Overall these relationships are built over the years which is why older guys at Centerview do well - they've known their clients for years through GS or ML. You'll also find that in most cases it's a same group of older individuals in boards and same bankers who works with them. 
 

But doesn't mean at EB you can't build relationships. If you are targeting $10bn public companies only - it'll be tough. Moelis has done well becoming more specialized with sponsor owned sell sides under

Also lot of commentary around execution skills. As someone who moved from BB Coverage to EB and doing a whole bunch of M&A - it's overrated. Most BBs have M&A team who do the ugly work, but remember it's mostly acc/dil, setting up DD calls and dataroom. All the middle market banks do it fine. You do it once or twice you get a hang of it. Being execution guy gets you stuck at director. If you want to be MD focus on coverage skills and finding new opportunities. 

 
  • Associate 1 in IB - Gen
Feb 23, 2021 - 2:13pm

Totally agree on your thoughts on the execution piece. Obviously, as an up-and-coming person, you're more likely to be able to build good relationships with smaller or mid-sized companies than Billion dollar + public companies. In my experience, directors and more junior MDs get pushback from the more senior guys when they use-up team resources for relatively low fee events. Is there anything you've seen that the good directors / more junior MDs do to get buy-in from the senior guys about using team resources for their smaller deals? Alternatively, is this likely just a product of working with senior guys that seem like dicks, for lack of a better word.

 
  • VP in IB - Ind
Feb 23, 2021 - 2:21pm

Group I'm in is all about chase anything. We hire more juniors if we need to and sometimes it's just roll up your sleeves and do it. It's no different at BB (why are you wasting time on $3-4mm deals). It's extremely selfish and common w certain set of senior people (not in our group) that focus only their legacy large cap things and internal things need to be in deck for them etc. it's even an issue with junior people who don't want to work on small things. Think long term that'll be a challenge for places like Centerview, Lazard, Evercore who only wants to focus on big things. Short term the economics work (you do 1 big deal per client w 5 clients over 5 years) and life is good. But it's bad for growth. That's why they go hire guns after the old guys get rich and quit. 
 

I'll also say there is nothing strategic about M&A advisory. Most times client knows what they want to buy. Highest price wins sell side. If an activist walks in you are probably dead. Centerview didn't solve Kraft's issues. No deal was ever unfair - whether the opinion was done by a BB, EB or whoever 

 
Feb 28, 2021 - 5:48pm

Your comment on M&A is only true if you are talking about non-public M&A, which of course the vast majority of M&A is. But there is significantly more art to public to public M&A, which tends to separate the great M&A bankers from the rest and of which few people have real experience in. And these days, most of the best M&A bankers are at smaller platforms for a reason. 

 
  • Associate 2 in IB-M&A
Feb 23, 2021 - 4:35pm

Echoing the posts above:

BB builds your Rolodex. You can literally get your foot in every door via your product offering.

When you become a senior MD, you should try the move to the EBs.

This has been the prototypical path. Obviously the world is changing at exponential pace.. so who knows what the ideal path will be for you / us.

 
Feb 23, 2021 - 4:58pm

The short answer is that the world doesn't revolve around M&A, unlike it appears by reading this forum. One example, in March/April last year most BB and other balance sheet banks were there for their clients to provide financing necessary for them to survive and these events build relationships even more. Not sure how an Evercore (random example) banker could have been helpful in that situation. Needless to say that a good amount of people even in the broader finance industry have no idea who Centerview (random example) is while everyone will know JPM. You may disagree but have experienced both points above myself

 
  • Associate 2 in IB-M&A
Feb 23, 2021 - 9:46pm

Go look at Evercore's Q4 earnings. Record year. I think that illuminates the fundamental misunderstanding about EBs. The resilient industries (TMT, healthcare, etc) continued with M&A after a 10 minute pause. The rest of the industry groups (consumer, industrials, and the rest that got hammered by COVID) were doing endless restructurings which led to a ton of debt and equity advisory (all three of which are not at all siloed, contrary to other posts in this thread. How much RX work does a BB banker see in a career?). There was a lot of PIPE activity and distressed M&A as sponsors saw blood in the water. Did you think we've been sitting around on our hands the last year?   

 
  • Business School in IB - Ind
Feb 25, 2021 - 1:55pm

This is a great point that a lot of people tend to be missing. Global Independents have still been very busy. 

EVR/MOE/LAZ/PJT all crushed Q3 and Q4 earnings. LAZ/PJT have a bit more revenue coming from RX than the other two and I think that helped them in Q2 and Q3 more than EVR/MOE. That being said all 4 of these banks crushed it when M&A came back online in the second half of the year. All of these firms will probably pay out around 65% of revenue as compensation for 2020, give or take a couple % in each direction, meaning killer bonuses. 2020 Bonus thread seems to confirm this so far. 

(Yes, I know some BBs have also had great 2020s but unlike the EBs, "global independents", this doesn't always translate to increased compensation for the IB division.)

 
Mar 1, 2021 - 7:04pm

I didn't want to trigger anyone. My point wasn't about deal flow or earnings or how busy people have been. I was just saying how close balance sheet banks were to many clients in the peak of the covid crisis and this helps relationships a lot. Then of course life goes on, M&A comes back and the qualities of the EBs shine again. Ignoring the RX angle, that only few can count on

 
  • Prospect in IB - Gen
Feb 28, 2021 - 3:16pm

How are you a VP and not know Moelis and apparently Evercore (from the comment thread) had a record Q4? Despite the COVID-19, it is apparent that the M&A market is very hot + restructuring demand has been increasing significantly (which are boutiques stronghold). There will always be M&A because strategics will want both organic vs. inorganic growth, especially with the rise of tech + healthcare. But I do agree with your point of exit ops and name recognition. 

 
Mar 1, 2021 - 6:57pm

Record year does not mean anything, my point wasn't about deal flow. Probably 2020 wasn't the best example because it was the shortest bear market ever and there were some very large restructuring, like PG&E. I am a VP because I am respectful of other people opinions, unlike many people here. Good luck to secure that summer internship

 
Feb 23, 2021 - 5:07pm

The standard answers about being able to sell multiple products and being able to rely on the balance sheet to faciliate relationships are true enough but none of that shit matters at all until you're a director. Literally at no point in your career will you be up at 2am thinking "holy shit i'm so stoked that I get to add a few coverage slides to a LevFin deck" or "oh god oh yeah balance sheet expand that rolodex bby". That shouldn't be anywhere in your mind when you're making an EB/BB decision. Here's the shit that matters:

 

1. Money. The compensation differential of EBs over BBs is significant and gets larger over time. It's in the range of 25% - 35% to start and rises from there.  

2. Protected policies and general respect for holidays and vacation. Probably group dependent, but BBs will generally have more formalized and enforced policies. 

3. Firm resources. BBs have bigger budgets for support staff, software etc. More likely to have third party affiliates who you can send bitch work to, more likely to have 24/7 print services people etc. 

If you want a balance sheet when you're a director or whatever you can lateral over to a bulge. But nobody does that, and you won't do that either. Because you'd be taking an immediate and massive pay cut. If people are leaving an EB but staying in banking they're probably doing it for lifestyle reasons and jumping to a lower middle market /regional type shop with chill hours, not jumping to a bulge to make substantially less money AND still get reamed.  

 
Feb 26, 2021 - 1:27pm

But I've seen this happen; I met someone who lateraled to a VP spot at a BB from an associate at EB.  When asked about it, seems like he faced more obstacles in getting promoted at the EB so he lateraled.  

 
Feb 26, 2021 - 2:28pm

Sure, that's fair. But sounds more circumstantial - I guess I was thinking more of cases where upward mobility isn't blocked due to one-off group dynamics. When people feel their hand is forced (or expect it to be forced soon) all sorts of moves suddenly make sense. 

 
  • Associate 2 in IB-M&A
Feb 27, 2021 - 5:25pm

One thing to add is that many MBAs are from international background and BB's global recognition is an important factor for those MBAs to contemplate if they do not win the work visa lottery (though many programs are now STEM eligible so they can work 3 years without the work visa). Those candidates could choose Barclays over PJT in London, or choose CS over Evercore in HK simple because BB's regional influence is heavier than the EBs in those cases. I personally would choose PJT/Evercore over Barclay/CS here in the U.S., but if I am from Mainland China, I could well take the offer from CS because I know I can be shipped to HK for safe. Its close knit to tech entrepreneurs in the region seems to benefit its wallet well. PJT/Evercore on the other hand might have limited exposure to such market.     

 
  • Analyst 1 in IB - Ind
Feb 23, 2021 - 5:27pm

EBs are not good at grooming talent. Just a simple fact, read the q @ a senior banker. Literally is a MD at an EB and says that EBs tend to poach rather than build talent. Look at new groups at EBs- ALL are from BB platforms. Move is def to stick it out at a BB and then make the switch to EB

 

 

 

 
Feb 24, 2021 - 12:36am

I'd choose neither. I enjoy not hating my teammates or modeling out a term loan at 4 am. 

  1.  
  • 1
Start Discussion

Popular Content See all

LETS FKING GO BOYS
+130IBby Intern in Corporate Finance">Intern in CorpFin
You Did it Citi
+120OFFby 2nd Year Analyst in Investment Banking - Industry/Coverage">Analyst 2 in IB - Ind
HELP: Sticky Situation with Boss
+107OFFby 2nd Year Analyst in Investment Banking - Mergers and Acquisitions">Analyst 2 in IB-M&A
Idgaf anymore
+29IBby 1st Year Analyst in Investment Banking - Industry/Coverage">Analyst 1 in IB - Ind
Anyone else just want out of this shit?
+28IBby 2nd Year Analyst in Investment Banking - Generalist">Analyst 2 in IB - Gen
Evercore Target Schools?
+26BSCHby Prospective Monkey in Investment Banking - Mergers and Acquisitions">Prospect in IB-M&A
To Snitch or not to Snitch?
+19OFFby 2nd Year Analyst in Investment Banking - Industry/Coverage">Analyst 2 in IB - Ind

Total Avg Compensation

March 2021 Investment Banking

  • Director/MD (9) $911
  • Vice President (31) $349
  • Associates (162) $231
  • 2nd Year Analyst (97) $151
  • Intern/Summer Associate (92) $144
  • 3rd+ Year Analyst (23) $145
  • 1st Year Analyst (370) $131
  • Intern/Summer Analyst (306) $82

Leaderboard See all

1
LonLonMilk's picture
LonLonMilk
98.5
2
Jamoldo's picture
Jamoldo
98.4
3
Secyh62's picture
Secyh62
98.3
4
CompBanker's picture
CompBanker
97.8
5
redever's picture
redever
97.7
6
frgna's picture
frgna
97.6
7
Addinator's picture
Addinator
97.6
8
Edifice's picture
Edifice
97.5
9
NuckFuts's picture
NuckFuts
97.5
10
bolo up's picture
bolo up
97.5