How do you become a Sponsors MD anyway?
These teams are always extremely top heavy with very few juniors. Are most of them former industry coverage MDs who had a ton of exposure to various sponsors and then decied to just cover them full-time?
Seems like it would be a more chill gig than trying to constantly gin up M&A as a coverage MD while managing books. The sponsors guys I have seen mostly just have lunches and dinners and send introductory e-mails and then say a few things on calls but they aren't in the weeds giving comments on pages or w/e
Based on the most helpful WSO content, becoming a Sponsors MD typically involves a few key steps and considerations:
Industry Experience: Many Sponsors MDs start as industry coverage MDs. This role provides them with extensive exposure to various sponsors, allowing them to build a robust network and deep understanding of the sponsor landscape.
Networking and Relationships: Building and maintaining strong relationships is crucial. As you noted, the role involves a lot of networking activities such as lunches and dinners. These interactions are not just social; they are strategic opportunities to maintain and expand influence with key players in the industry.
Transition to Full-Time Sponsor Coverage: After gaining significant experience and establishing a network, some industry coverage MDs decide to specialize by covering sponsors full-time. This decision is often driven by the individual's strengths in relationship management and strategic deal facilitation.
Role Dynamics: The role of a Sponsors MD, as you've observed, can sometimes appear more relaxed compared to the high-intensity deal-making seen in M&A coverage roles. However, it still requires strategic thinking and effective communication. They might not be deeply involved in the minutiae of deal documents but play a crucial role in initiating and maintaining the flow of deals through introductions and strategic discussions.
Skill Set: Key skills for a Sponsors MD include excellent interpersonal communication, a strong understanding of financial modeling and deal structures, and an ability to see the bigger picture in deal dynamics.
In essence, the path to becoming a Sponsors MD is marked by a combination of strategic relationship building, industry experience, and a shift towards specialized sponsor coverage, leveraging the skills and networks developed during their tenure as an industry coverage MD.
Sources: Career Bankers: Coverage vs M&A, Top firms for distressed investing. Solving for brand and deal experience more than ability to growth within the organization., Hallmarks of a Strong MD, Questions about VP/D/MD levels at investment banks, Some Observations from an MD
Sponsors coverage, and the equivalent role on the buyside (BD), are the best jobs to have in this industry and I don’t think anyone can change my mind.
But to answer your question, idk.
I think it varies based on bank. I can speak to my old bank, Macquarie. Macquarie only has/had one or two sponsors analysts with all the associate etc work being done by the LevFin team with the exception of one SVP. If I recall correctly, there are like 8-10 people in the Sponsors group in MacCap USA overall. Regarding how to become a sponsor MD, at least at MacCap they took people from other corollary divisions and put them into Sponsors, eg a LevFin MD moved over in 2021 and another guy came in from the buyside to do it.
Fugit beatae rerum fugiat ullam. Voluptatem blanditiis sint est ut praesentium aut. Est dolorem et officiis rerum sint. Officia laboriosam minima at natus et. Expedita cumque et ut saepe. Ab accusantium perferendis repellat dolores sequi expedita voluptatem et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...