Analyst Class: 10 Years Out

I often hear that most IB analysts go on to be relatively successful, but I'd love to hear about your class and what the analysts in your class have gone on to. (Would also be great to get a complete view, like how long ago it was and what percent of the class went on to a certain position)

(Ex. 10% continued in IB and made MD, 20% to startups, 10% retired, etc.)

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Feb 2, 2021 - 12:50pm

Well,  Timmy was working at DQ and was able to secure a FT roll at $AMC as a Head of a highly revenue generating product group (snack counter).  He was ble to get som stock options and now Timmy is worth more than most people.  

Jan 29, 2021 - 12:14pm

That's not true

Money can purchase freedom, if you have the guts to buy it

  • 1
Jan 29, 2021 - 12:22pm

5-6 years out, analyst class probably gonna get fired from their current hedge fund employers after GME fiasco. Glad to be on the other side of the trade $$$

Array

  • 7
Jan 29, 2021 - 4:09pm

WSO vet here, and it's been just over since 10 years since I started as an analyst. The (small) analyst class 10 years later:

  • CFO of a well known Series C
  • Hedge fund analyst
  • Investments at an endowment fund
  • Venture investor
  • Corp Dev/Strategic Finance at a sponsor-backed company
  • Handful still in banking as Directors or MDs

you didn't make good choices; you had good choices

  • 11
Feb 1, 2021 - 1:04pm

DDTG

nobody in PE? did you work for a local credit union?

LOL, a few of those guys had stints in PE but I started at a boutique that wasn't a feeder to the buy-side. Looks like everyone did ok regardless.

you didn't make good choices; you had good choices

  • Intern in IB-M&A
Jan 30, 2021 - 1:44am

Would you say this is a relatively good result for an IB class, or is it pretty normal?

  • Intern in IB-M&A
Jan 29, 2021 - 6:31pm

one of my parent's NYC analyst class at BB after 25-35 years... I think in total there were like 15

-2 still at CS.. think just MDs

-4 ended up starting or joining mid-sized distressed PE fund... All still partners/CIOs

-1 retired for 10 years, came back and works as corporate advisor 

-1 made partner at another large HF/PE... passed away a relatively young in a car crash. (according to my parent: "the best analyst in the class")

-1 started an EV marketing company... think its going pretty good 

don't know what happened to the rest. 

Jan 30, 2021 - 10:46am

I'm 31 years old, work in MM PE as an associate. Currently work 60-70 hours a week on average, making $250-300k a year. Pretty happy with my career trajectory so far, although I think at my current firm it will be a struggle to push up the ranks to VP and significantly increase my earnings.

Of my fellow analyst class, it's a real mix. Obviously these are not exact percentages but just my rough guesstimate off the top of my head:

- Around 10% are "super-successful", i.e. they either went into MF PE and are now VP/Principals or stayed in banking and are close to making MD (director level currently). These guys are probably making $600k-$1m a year. A lot of them though (especially in PE) look terrible and are still single, having got where they are by working 7 days a week (80-90+ hours a week) up into their early 30s.

- 60% or so are "standard successful" (by IB/PE standards). Either stayed in banking and are now VPs but not likely to move up anytime soon (because they were great analysts but struggling to bring in business/become a rainmaker in today's environment). I feel a bit of sympathy for these guys as although they're making good money, a lot of them are married with kids and have expensive lifestyles so can't quit (and no-one in the corporate world is going to pay an ex-VP $400-500k a year in corporate development). The other batch are guys who went into LMM/MM PE firms (like me I guess) - I think these guys generally have a good deal, as they're maybe not earning mega-bucks but they at least have a reasonable worklife balance/more opportunity to move up.

- Remaining 30% - people who exited IB and didn't want to go into PE. These guys have ended up in a variety of roles - a lot went into corporate development and are earning good salaries with a nice worklife balance, others joined fintech startups or even created their own startup. Very mixed outcomes/salary range for this group as yo can imagine.

Ultimately none of these groups is better than the other - it's all about what's best for you personally. If you're a rockstar IB analyst and want to slave away at a MF PE fund to earn the mega-bucks, by all means go for it. Equally if you want to work 40-45 hours a week in corporate development making $150-200k plus stock options, that still gives you a nice lifestyle with plenty of time left over to spend with your family.

Jan 30, 2021 - 11:32am

What tier bank were you at? 5-6 years out here from a top BB. People are still struggling. Nobody has really made it big yet. 

Entrepreneurial friends from back home are doing way better

Array

Jan 30, 2021 - 12:45pm

I'm also from a BB - tbh I think luck has just as big a part to play as anything. For example, one guy I knew who just made principal at a MF got his promotion from being the key guy on an investment that netted the firm a huge payday when they exited in 2019. But if they'd held on one more year until 2020... let's just say it would be a different story. Obviously that's not in any way diminishing his hard work and skill - but unfortunately, you need both of those and luck as well (Malcolm Gladwell's "Outliers" is a fantastic book on this).

When you say "made it big" - I mean, the top 10% I mentioned are doing very well financially but they're still not multi-millionaires (maybe will be in a few years to be fair). Also they've traded pretty much all of their 20s and a number of them appear to be suffering in some way either physically or mentally from the constant overwork. I guess most of the guys I knew from my analyst days I would class as successful bankers (and certainly your average person on the street would think earning $300-500k is incredible) - but no-one I know is going to be the next Schwarzman or Ackman anytime soon.

  • Intern in IB-M&A
Jan 30, 2021 - 7:23pm

What do you think will happen to the 60% that stayed but who don't seem like they will move up? Will they get pushed out?

Jan 31, 2021 - 7:26am

Good question - I think it depends on a couple of factors:

a) Market environment - in the bull market of the past 10 years, banks have generally been increasing headcount (or at least there has been no real pressure to reduce headcount). Whereas if there is a sustained market downturn, these guys will probably be the first to be cut - for their salary/comp level they generally add less value than an associate or 2nd year analyst. However I've seen guys above me who were made VPs 6-7 years ago and are still in their role (even though they have no real chance to move up). So very market/macro environment dependent I would say.

b) Competence - a VP is ultimately an "execution guy" meaning their role is to manage the transaction and make sure it all progresses smoothly. Surprisingly you get quite a wide range of competence at the VP-level (at least in my experience, with the IB bankers I've worked with on the PE side). On one end there are guys who were presumably good analysts/associates but now think they've paid their dues, and seem to spend most of their time forwarding emails to their juniors without adding much value themselves. In my experience on the PE side these guys can be painful to work with, and frankly I'm surprised they stay in their job (presumably they're good at "managing up" and taking credit internally).

On the other hand, there are VPs who really add value. Even though they will struggle to become rainmakers (and thus get promoted) they have become what I call "execution gurus." What I mean by that is by this stage of their career they really know their sector/specialty and all the various issues/roadblocks that will come up in a deal and how to resolve them - and at the same time are technical enough to still dip their toes into the modeling and thus can explain to their clients/external parties the model outputs and what affects them. Personally I really like working with these guys - as even if you have a rockstar analyst/associate who builds an amazing model, they probably won't have the necessary career/sector experience to fully understand all the roadblocks that can come up on a deal (whether they be structuring/lending related, or legal/regulatory and requiring the lawyers' input).

So in a good/neutral market environment, from my experience I see the latter group staying at their bank for a long time. Because even though they're expensive and don't bring in new business, for an MD they are well worth their salary - as the MD can just bring in a deal and toss it over to the VP to manage/run, knowing it will be handled very competently. Of course for this type of VP there is the question of do they want to spend a decade-plus of their career doing all the work for an MD who takes all the credit and makes the mega-bucks, while they're earning $500k. By the time most get to this point of their career however, they probably have a family/kids etc so taking a 50%+ paycut to go into corporate development may not be an option. And PE firms don't generally hire from IB at VP-level, since by that time (rightly or wrongly) they seem to view VPs as too "entrenched" in the sell-side.

With the former category, if these guys are good at internal politics they often seem to stick around for a number of years. If they're not so good at politics/managing up, I tend to see these guys move to steadily smaller banks over time - one example is a VP who was at a BB for 4 years, then moved to a mid-size bank for a couple of years and then a small boutique for another year or so. He's just joined a fintech startup now. So it seems like there's always the option to move to smaller firms if they get forced out.

Jan 31, 2021 - 11:18am

I'm old enough to see patterns. The VP/Directors in this bucket will continuously trade down in banks until they churn out. 2-3 lateral moves in 5 years. Sometimes the lateral results in a promo, sometimes not. The comp hit associated with moving to corporate is very substantial and people will try to push it out as long as possible. 

Jan 31, 2021 - 7:55am

No worries. I think that last point I made is really something you learn with age (not meaning to sound patronizing here). What I mean by that is at 24 I thought I would love to work at a MF to make the mega-bucks - and I wouldn't mind working weekends/to 1am in the week every day to make VP/Principal there. I didn't get any MF offers so never had that opportunity anyway, but even now as a single guy at 31 I find having to work all weekend much worse than I did in my mid-20s. I can't imagine what it would be like having a family and working at a MF.

I think basically the opportunity cost gets much higher the older you get. Other threads here on WSO have covered this much better than I ever could, but essentially when you're in your early/mid-20s the opportunity cost of missing evenings/weekends is relatively low compared to the salary/future prospects IB gives you. Don't get me wrong it sucks working late into the night and at weekends - but if you're a single guy at 21 what would you be really doing then instead anyway? Watching Netflix or going for drinks with your buddies? Ultimately it's not the end of the world if you miss a few of those because of work. Not going to the gym does suck - but even with a busy IB schedule you can usually fit in a decent amount of exercise most of the time.

By contrast, by the time you get to your late 20s/early 30s - you've put up with working late nights/weekends for a number of years already, and you probably either have a family or are in a serious relationship or looking for one. And even with an understanding partner, having to cancel weekend/evening plans at last minute does put stress on the relationship. Must be even worse with young kids I can imagine.

Also even if you're a single guy like me - by this point a lot of your friends are married/have kids, so it's not like you can phone them up on a Friday night last-minute and get everyone to come out. For my friendship group at least, we now have to plan guys' weekends away/nights out well in advance - so cancelling on them at the last second would suck (I've had to do that a couple of times unfortunately).

Again I'm not saying one option is right and one is wrong - obviously most older guys at MFs and IBs have a wife and kids, so it's obviously far from impossible. I'm sure it can be stressful though. So I can certainly understand why people - once they have the career springboard that 2-3 years in IB gives them - go to work for F500 companies or join startups. They're still earning great salaries by the average person's standard and get a significantly better lifestyle. Each to their own I think.

  • Incoming Analyst in IB-M&A
Jan 30, 2021 - 11:41pm

of that 60%, whats the breakdown between stayed in banking vs left to pe?

Jan 31, 2021 - 7:32am

Probably around a 50/50 split I think (obviously not exact but just off the top of my head). Neither option is better - I think a lot of it depends on your personality type. In IB you are on the sellside but also a pure "deal guy" - i.e. you work on a transaction, it closes and then you move on to the next. Whereas in PE the deal itself is obviously a huge amount of work, but that's just the start - you now have to make sure the company is effectively managed by working with the C-level execs at the acquired company, and work towards an eventual exit in a few years. Also in PE the best deals are often the ones you don't do - last thing you want to do is overpay for an acquisition and subsequently realize you're not going to make your expected returns. Whereas an IB guy doesn't care - you just want to get the deal done.

I can see the appeal in both sides - personally overall I prefer being on the buyside in PE, but I can also see why the people I've known have stuck to IB. Working on deals usually means intense hours but it's also one of the best/most exciting parts of the job. By contrast doing quarterly valuation reports, working with portfolio execs to implement operational changes etc can be interesting but can also be deadly dull at times.

  • Analyst 1 in IB - Ind
Jan 31, 2021 - 3:55pm

Thanks so much - this is amazing. 

Quick question - From a pure financial / lifestyle perspective, do you think that those who stayed in IBD and are directors are best off? it seems like the MF PE Principals maybe making slightly more but their lifestyle is significantly worse 

Jan 31, 2021 - 4:41pm

Thanks! Good question - I think the answer is it depends. On the one hand in PE you're on the buyside so investment performance is really the only thing that matters - there's considerably less bs/obsessiveness with making sure a slide deck is perfectly formatted for example, as seniors only care that the numbers are right. On the other hand, you have a lot of new painful responsibilities (quarterly valuations/reporting for example) - and from what I've heard from professional acquaintances, at MFs you can be stretched painfully thin (even by IB standards).

In banking on the other hand, you still have to deal with all the client service bs and make sure you (or your juniors at least) format a slide deck perfectly. Having said that, by the time you make VP/Director (or even 2nd/3rd year associate) you've hopefully worked on enough deals that you know exactly how things play out/what is required - and that model/slide deck that took you 6 hours as an analyst can now be done in 1.5hr. Also you have juniors below you to pick up the slack (whereas as an associate in PE you will likely still doing everything on the model etc).

So tbh if you're a VP/Director in IB, if you're lucky you might be getting away with working 60-70hrs a week and making $500k a year - which is a pretty good ratio I would say. Certainly most IB VPs I know aren't working 100hr weeks. Of course they are sell-side (ie in service to the client) so can still be very prone to getting passed last minute/weekend client requests from their MD. Although at least as a VP your job will hopefully just be managing the associate/analyst over the weekend, rather than spending hours both days grinding away.

That is one other positive of being on the buyside - while the workload can be equally intense in PE, the fact you're not serving clients can mean you get a bit more flexibility over your workload (for example in PE often you can juggle/move things around if you really need to keep a weekend free). But having said that, often you get urgent requests from principals/MDs which basically are the same fire drills as client work in IB.

So to summarise in my personal opinion (bearing in mind I haven't worked at VP-level in IB or at a PE MF, but know/work with a lot of guys that do), I would rank the worklife ratio as follows:

1. MF PE - probably the worst/most intense as you said. You get some advantages from being buyside (eg can juggle work around, less bs stuff then banking) but these are most likely outweighed by the sheer number of deals you're working on, and the fact you don't really have any junior support beneath you. Most of these guys likely regularly doing 80-90+ hrs a week. But pays the most.

2. IB VP/Director you're still in banking, so all the downsides of being beholden to the client remain. But at this point you're experienced enough that models and decks and other deal stuff is generally pretty straightforward - plus you have a team of juniors below you to take on most of the load. I'm sure there are a lot of busy VPs still working 80+ hrs a week - but if you're competent, lucky and have a good team below you, then you may only be doing 60-70hrs a week while making $400-600k+.

3. MM/LMM PE - this is what I do. I'm probably still working similar hours to a bank VP and for less pay, but at the same time I also have the advantages/efficiencies from being on the buyside (less time wasting work, not beholden to clients just my seniors, being able to keep certain weekends free easily barring emergencies etc).

Jan 30, 2021 - 8:35pm

Just looked. From one of the strongest 'elite boutiques':

  • middle market private equity ($7b AUM), did not do an MBA, preceded by a different middle market firm the exact same size
  • megafund private equity, preceded by a Wharton MBA, preceded by an associate stint at that same firm
  • senior strategy role at one of the jumbo fintech startups that IPOed within the past year, preceded by growth equity
  • venture capital (multi-billion AUM, think Bain - A16Z - NEA)
  • upper middle market private equity ($23b AUM), straight promote without an MBA
  • hedge fund, preceded by middle market private equity ($16b AUM)
  • MBB consulting

I am permanently behind on PMs, it's not personal.

  • 6
Jan 31, 2021 - 10:31pm

7yrs since started as an analyst in a US BB's HK office (class size of ~20)

  • 20% still in IB incl. myself, all VPs level in BBs, some incl. myself spent a bit of time in buyside before jumping back to sellside
  • 20% in MFs (all stuck at senior associates level and looking to move to a smaller funds for more growth opportunities and sourcing responsibilities)
  • 40% in LMMs / family offices / FoFs (good lifestyle, but comps in Asia for these places can be really low, easily a 50-60% discount to IB VPs / MFs senior associates)
  • 20% in large TMT corporates mainly doing M&A and investments, quite popular gig these days given tons of capital to deploy with no fund raising pressure as in for LMMs 
Feb 1, 2021 - 11:35pm

Sure, happy to share. I spent ~ 3yrs at a growth equity fund after A-A promotion at my previous BB. I would say PE/growth equity is not for everyone and certainly not for me. Upside might be there (at least 5-7+ yrs staying with one fund) with more control of your time given you only need to pitch your own IC, but some issues are:

1) portfolio management can be really boring and time consuming; when most of us back in sellside were fancy about being responsible of the operational / portfolio management, it in fact means spending quite a mount of time preparing valuation reports with the auditor/fund admin (not much value); when it comes to certain cases that do involve intense operational improvement, you wont be surprised that us ex. bankers are quite useless providing good advice to the owners, therefore tend to be frustrated with lots of pushback from the mgmt.

2) buyside is a long game and if adjusted for the risks (ie. deals go bust which happens more often than you think), your avg. payout will likely be lower than your peers back in IB, and the career path to at least director level is typically easier than PE (all my peers at MFs/UMMs are stuck at senior associates level after 6-7 years, some might be promoted to VP/Principal if lucky in the next 2-3 years, but by then your peers at IB will be director with an army below them)

3) this one is more Asia specific; unlike US where there is a established market for MM, in Asia the gap between MFs/UMMs and MM/LMMs is huge both in terms of pay and fund size. There are 2 implications: 1) you have to stick with MFs/UMMs to maintain the high pay but to bear the same if not worse lifestyle vs. IB, but as I mentioned most of my peers cannot get promoted to VP or above anytime soon, then they need to move to smaller funds which comes to my next point, 2) MMs/LMMs are having a hard time raising new funds given all LPs these days are being conservative, so they tend to add exposures into their existing large GPs, which will result in much less pay at these smaller funds. Based on my chat with those MFs peers, they just cannot take that kind of pay cut hence still stay.

So I was lucky that I got hired back to another BB that valued my time at buyside and didn't discount me at all and gave me a VP position at their TMT team. Things have progressed well given huge amount of activities in the capital markets.     

Bottom line is I do see some of my peers are happy with being at LMMs/UMMs given the lifestyle. PE is still attractive to some people but they need to have the right expectation, because most of us moved to buyside during analyst years when most of us didn't really know what we want.

Jan 31, 2021 - 10:41pm

Not quite 10 years out yet but getting there...

About half are VP's in PE. Some have been VP for a bit and probably up for promotion, some just got promoted (to VP). 

Biggest other bucket is corp dev / strategy, which accounts for maybe a quarter. 

Rest is spread between VC, consulting, banking, entrepreneurship, and asset mgmt. 

Jan 31, 2021 - 11:02pm

FWIW - one of the former posters (mergersandacquisitions78 - an MD at the time) did a round up for 18 years out a couple years back:

mergersandacquisitions78

18 years out.

10% banking at the MD level at top firms (I include the ones that made MD at top firms and then took some big $ guarantee to go to a lesser firm)

10% banking at second tier firms who didn't make MD at top firms (most EDs in banking at top firms get pushed out if they haven't crossed the rubicon after years 4 and 5; this isn't necessarily true in DCM, ECM or S&T)

5% banking at tiny boutiques / hanging up a shingle

5% partner level at top tier buyside

15% partner level at smaller buyside

10% sub partner level at buyside

15% family business (mainly the internationals)

10% c-level corporate (or on path thereto)

10% non c-level corporate (with no path thereto)

10% random

Source: https://www.wallstreetoasis.com/forums/where-do-most-investment-banking…?

Array
  • 1
  • Analyst 3+ in IB - Ind
Jan 31, 2021 - 11:11pm

Quite interesting that almost everyone 10 years out is still doing finance in some capacity. I know a good amount of people especially recently who are leaving finance completely in different analyst classes so I wouldn't be surprised if 10 years from now, the "Other" bucket for people will be noticeably larger. 

  • Analyst 1 in IB - Ind
Feb 4, 2021 - 10:51am

Yeah I kinda find that a bit depressing. I think I'll also probably find myself in that other bucket either through some type of strat/ops role at a startup or founding my own business.

Finance has too much structure.

Feb 1, 2021 - 12:59am

I'm only 5ish years out, but my group had 10-12 analysts. Here's the current breakdown:

- I went to MF PE for a few years, then switched to a smaller firm & now running acquisitions/serve in interim C-level positions for our portfolio companies (small companies, so less impressive than it sounds)

- 3 went to HFs; 2 of them are still there, not sure what the third is doing

- 2 still in banking at VP level

- 2 are sr. associates/VPs at lower MM PE (sub $500mm funds)

- 1 went to sovereign wealth fund, no idea what he's doing now

- 1 went to Corp. Dev./strategy

- 1 works at a large cap PE fund outside the US

- Last one works in Corp. Finance @ a start-up

My PE associate/analyst class was much more impressive; all-in there were 9 of us, although we had ~20 analyst/associates across years, and I think only 1 is still left standing at the firm (brutal place to work). Of the ~20, most of the associates are at top HFs (think Elliott, Lone Pine, Citadel, etc.) in analyst/senior analyst roles or MM PE funds ($1-3bn AUM) in VP/Principal roles. The analysts I worked with for the most part all went to top HFs, one left to go to a start-up where he's running finance; another went to a fin tech start up and is apparently crushing it, one at HBS and another at GSB. A few associates left to go to more relaxed firms for lifestyle reasons and make $600k-$1mm+ a year at early principal level; they live cushy lives and I'm jealous. 

Feb 1, 2021 - 1:56am

Not sure if this got posted 2x, one is at a family office & on lower end of comp spectrum. I do have a friend younger than me that has a sick FO role and clears $1mm - he's got the dream role.

Other friends are at structured equity / co-investment funds. One role is a bit unique because he got in at the ground level for a fund that ripped. He's also an awesome guy and deserves the success, but for sure the exception rather than the norm. 

Feb 1, 2021 - 1:52am
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