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Former lawyer, now i-banker, takes Qs 7/31/12 (Spacebanker)
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Date: July 31st, 2012 9:41 AM Author: disgusting travel guidebook Travelling today and have time to kill. It's been a while. Go. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222375) |
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Date: July 31st, 2012 9:43 AM Author: big parlour jap are you at one of JPM, MS, CS or GS? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222378) |
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Date: July 31st, 2012 9:44 AM Author: disgusting travel guidebook Let's say I'm at a top bank, one of those or their prestige peers. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222387) |
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Date: July 31st, 2012 9:46 AM Author: big parlour jap what kind of work do you mainly do? M&A, DCM, ECM, LevFin? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222393) |
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Date: July 31st, 2012 9:54 AM Author: disgusting travel guidebook See below. Everything, with the types of stuff oscillating between M&A and financing depending on the environment. M&A is more satisfying than financing for a variety of reasons (money, sexiness) so that gets more attention but grinding out DCM deals pays the rent too. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222429) |
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Date: July 31st, 2012 9:58 AM Author: big parlour jap aw yeah dem leveraged recaps amirite.
describe what happens in a pitch meeting. to whom do you normally pitch deals? biz dev VPs or C-level execs? how long does a pitch last? do you send the company materials prior to the meeting? is there ever a beauty contest among ibanks when a company is considering a financial transaction? |
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Date: July 31st, 2012 10:04 AM Author: disgusting travel guidebook At my level I am not regularly pitching deals on my own to CEOs of big companies, though I will chat regularly with biz dev and treasurer types at big companies or C-level types at smaller companies. When you pitch transformative M&A to a CEO you tend to have some senior bankers in the room.
I do lots of pitch meetings that are 1-2 hours, I fly out with a team and meet with a team of executives. But also a lot of calls and coffees with guys at the company to check in, keep them up to date etc. It's a sales/relationship business; if you only see your clients in formal 10-person 2-hour meetings you won't get a lot of business.
It's not unheard of to send materials before the meeting (some companies ask for it) but the preference is usually not to, if only because we're typically revising the night before.
There are beauty contests all the time. It is not the best way to get business - you'd rather trade on relationships and proprietary ideas than on pitching for something they're going to do anyway and are just picking the bank - but it's a fact of life and if you can't win at beauty contests you'll have problems.
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Date: July 31st, 2012 10:12 AM Author: laughsome hunting ground milk in your estimation how much of landing business is demonstrating a superior product to the client and how much of it is the client saying "hmm, i'm gonna go with goldman over citi because, well, they're goldman"? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222498) |
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Date: July 31st, 2012 10:18 AM Author: disgusting travel guidebook It is very variable but both of *those* things are overrated. The product is mostly "a merger," "a debt deal" - you're kidding yourself if you think that your product is vastly superior to anyone else's. And clients are not usually that concerned with i-bank prestige though there is *some* of that, especially on IPOs.
The *biggest* thing is all the stuff that you'd lump under "relationship." You don't get a merger assignment because you've reinvented how to do mergers. You get a merger assignment because: 1. You ping the company regularly with debt market updates saying "I know you talked about buying Company X last year, if you wanted to pre-fund that you could do a 10-year bond at 4% today because the market is desperate for IG chemical-manufacturer paper." 2. You call the biz dev guy regularly and say "hey, you were talking about doing a small acquisition; you'd really like the guys at Company Y and they're in your town next week, would you like me to arrange a meeting?" You give the client thoughtful ideas that are not about pressuring an immediate deal but about giving the client options, helping them run their business etc. 3. When the treasurer calls you and says "can you help me figure out the tax treatment of these hybrids my predecessor issued?," instead of saying "ask a tax lawyer" or "what's in it for me?," you say "of course" and quickly and responsively get specialists to give him a useful and correct analysis.
Basically you provide a lot of free service that impresses the client with your thoughtfulness, honesty, hard work, dedication to and understanding of his business, etc. And then when he stumbles across a merger target that wasn't pitched to him by a bank, he calls you because he thinks you'd do a good job and because he owes you for all that free work.
Also lending. Big companies particularly demand underpriced credit facilities in exchange for allocating capital markets and sometimes M&A fees to banks that are in those facilities.
And *sometimes* you do come with a novel idea - a complex structured transaction, or a private-company acquisition where you have a unique in with the target - that gets you an assignment from a company where your relationship otherwise isn't that strong. |
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Date: July 31st, 2012 10:40 AM Author: brilliant tattoo Greetings, *XOers discover being an alpha ibanker still involves sucking client dick and [gasp] NETWORKING* *XO aspie ibanker aspirants killself en masse* |
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Date: July 31st, 2012 10:41 AM Author: elite goal in life haha credited but relationship maintenance of this type is easy. it's the law firm "land the whale" culture that makes BD difficult in this environment |
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Date: July 31st, 2012 10:42 AM Author: laughsome hunting ground milk logged in under wrong account? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222596) |
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Date: July 31st, 2012 10:44 AM Author: elite goal in life nah, just an observation. I see people obsessing over landing the most massive clients/deals/etc, completely to the detriment of client maintenance and the little shit that keeps em coming back (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222608) |
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Date: July 31st, 2012 10:41 AM Author: disgusting travel guidebook Honestly banking is 100x more of a client service business than law is. If you're antisocial and hate clients and pointless work, banking is not for you. Also it's not really "alpha" in personality, not if you're good. I've met some of the best bankers in the world and they leave *me* with the feeling of being brilliant and important: alpha arrogance is not a way to win friends and influence people. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222594) |
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Date: July 31st, 2012 10:42 AM Author: laughsome hunting ground milk banking has pointless work? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222600) |
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Date: July 31st, 2012 10:43 AM Author: disgusting travel guidebook Joke? Almost all of banking is pitching and relationship maintenance, which is almost by definition "pointless" in the short run.
My analysts *hate* it when I say "let's run an analysis for Company X on a merger they'll never do." It's good business but it sure feels pointless. |
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Date: July 31st, 2012 10:56 AM Author: brilliant tattoo Greetings, I do not equate "alpha" with "arrogant" and never have. Leaving someone with the feeling that you're brilliant and important is alpha. I'm GC of a tech startup, and getting the job was all relationships. Keeping the job is a mix of doing good work and relationships. The human side of the legal business is a lot of fun; I'm kind of jealous that you have a job that requires even more skill at it - I think I'd have a blast, even if I sucked hard. |
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Date: July 31st, 2012 10:57 AM Author: disgusting travel guidebook Totally agreed, I may have overstated XOXO's assumption that "alpha" = "bragging about your dick a lot."
But even the most alpha bankers do a lot of client grovelling. |
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Date: July 31st, 2012 11:01 AM Author: brilliant tattoo Greetings, I wonder if groveling can still be alpha. Like if you are only doing it to manipulate someone, that seems like it could be sorta alpha. Not sure though. Probably not. Honestly don't care - fiddling with the definition is just intellectual masturbation. Are you related at all to SpaceLaw? |
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Date: July 31st, 2012 11:03 AM Author: disgusting travel guidebook I am not directly related to SpaceLaw but I picked this name around the time that "space law" was a topic discussed on XOXO and I made the logical leap to space banking. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222731) |
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Date: July 31st, 2012 10:44 AM Author: big parlour jap lulz titcr.
i wouldn't mind a job requiring lots of client contact. i find it kind of fun actually. you get over the nervousness quickly, ime, even if you are kind of aspie. it's also way easier to talk to someone when you're offering expertise and can leverage institutional reputation. |
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Date: July 31st, 2012 10:45 AM Author: laughsome hunting ground milk yeah but then you have to know stuff and cant just sit at your desk and twiddle your thumbs (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222613) |
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Date: July 31st, 2012 10:48 AM Author: big parlour jap i assume the level of client contact you get is proportional to your ability to interact intelligently with the client. i assume an analyst isn't going to field a call from a F500 finance officer and pitch transactions to him/her. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222629) |
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Date: July 31st, 2012 10:41 AM Author: laughsome hunting ground milk fascinating. ty. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222592) |
Date: July 31st, 2012 9:44 AM Author: Aromatic bull headed lettuce business firm what specific department are you in and how busy are you these days? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222385) |
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Date: July 31st, 2012 9:46 AM Author: disgusting travel guidebook I'm in an industry group.
It's been a while since I've been very busy on live executions but some deals are happening and we're definitely not in sitting around waiting for layoffs mode. Most of my work is always pitching and that is fairly active these days. |
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Date: July 31st, 2012 9:47 AM Author: saffron aphrodisiac pistol How pissed are analysts at their bonuses that are coming out right around now? Are they being all millenially pissy and entitled to 70k and bitching about 50? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222395) |
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Date: July 31st, 2012 9:51 AM Author: disgusting travel guidebook Yes, analysts are always millennially pissy. Today's 22-year-olds grew up thinking that banking was a glamorous high-paid stepping stone to even more glamorous and higher-paid buy-side work and the decline of the industry is constantly news to them. As someone who has built a bit of a career here, likes the work, makes a good living, doesn't get killed on hours, etc., I can take the money ups and downs in stride and am okay with knowing that the money will never again be as good as it was in 2007. For the analysts that is perpetually shocking. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222412) |
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Date: July 31st, 2012 10:24 AM Author: saffron aphrodisiac pistol Interesting. Do you notice anything in common as far as background amongst the better analysts? Is staying to be an associate becoming more common as the buy-side gigs aren't there for everyone anymore? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222539) |
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Date: July 31st, 2012 10:28 AM Author: disgusting travel guidebook Honestly they went to Wharton. I am not a b-school graduate or a fan of undergraduate business education on a personal level, but it definitely helps first-year analysts hit the ground running, which as I get old and crotchety I appreciate.
Yes but I am continually surprised by how available the buy-side gigs are. From where I sit, seeing analysts leave, the recession seems to have dented the buy-side less than the sell-side. Very top name buy-side firms continue to pick up analysts who I thought were mediocre. |
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Date: July 31st, 2012 9:51 AM Author: laughsome hunting ground milk do you do debt capital markets or equity capital markets or M&A or something else? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222407) |
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Date: July 31st, 2012 9:53 AM Author: disgusting travel guidebook Most bankers are in an industry group: they cover a group of companies in a line of business - chemical manufacturing or enterprise software or apartment REITs - and advise those companies on all sorts of transactions. So I do DCM and ECM and M&A deals (alongside, of course, my product-specialist colleagues) and also a lot of general financial advising, handholding, and connecting companies with the right specialists at my bank for FX hedging or tax structuring or whatever. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222418) |
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Date: July 31st, 2012 9:54 AM Author: laughsome hunting ground milk how hard to make the jump from:
analyst to assoc
assoc to veep
veep to md
md to director
and what is the base salary/bonus potential at each level?
sorry for making you my vault guide bro. |
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Date: July 31st, 2012 10:00 AM Author: disgusting travel guidebook Analyst to assoc - varies a lot by bank but a lot of banks have been pushing to retain rising analysts in recent years. The trick is that good analysts want to go buy-side and banks don't want bad ones, so you have to be a particular kind of mediocre to make that jump.
Assoc to VP - pretty much automatic, you just have to not be fired, which you won't be if you do the work. Unless there are mass layoffs, which there frequently are.
VP to director or whatever the senior-VP title is - usually almost as automatic as associate to VP.
Director or whatever to MD - you need at this point to be commercially viable and producing good money for the firm. Social factors, etc., enter into it but it's a commercial decision. Probably a higher percentage of directors make MD than law firm associates to partner just because there's usually no strong up-or-out, you can linger at the sub-MD level for a while trying to make it.
I don't know about base/bonus at each level, use Vault. At VP level I make mid six figures all-in; most banks now pay pretty high base salaries compared to the boom years (associates make a little less than equivalent law firm associates, VPs a little more) and then you at least hope for a bonus of ~100% of salary though making multiples of your salary, at mid levels and in banking (as opposed to trading), is no longer as expected as it used to be.
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Date: July 31st, 2012 10:02 AM Author: laughsome hunting ground milk how many hours a week of work at each level? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222454) |
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Date: July 31st, 2012 10:07 AM Author: disgusting travel guidebook Analyst - all of them
Associate - a lot, like 9-midnight regularly in busy periods
VP - sort of hard-professional work, 9-10am to 8pm and it's rare to see the office on a weekend (though you do calls, review materials, etc. from home)
More senior - you leave the office earlier and earlier when you're in New York, but you're travelling more and more. Being an MD is not an easy life exactly but it's not like being a lawyer. You almost never do "work" in the sense of sitting at your desk writing or reviewing documents, monkeying with Excel, etc. You just talk to people all day, often in person in faraway places. Successful senior bankers have hard lives. |
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Date: July 31st, 2012 10:13 AM Author: laughsome hunting ground milk "all of them"
lol |
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Date: July 31st, 2012 10:08 AM Author: Floppy Mahogany Boiling Water Can you talk about the importance of personalities to consummating an M & A deal? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222476) |
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Date: July 31st, 2012 10:09 AM Author: disgusting travel guidebook What do you mean? They're important. This is a people business. The best bankers are good psychologists and students of human motivation; there's only so much a DCF can prove and after that you need to figure out what the other side's people want and give it to them. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222484) |
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Date: July 31st, 2012 10:17 AM Author: Floppy Mahogany Boiling Water Like say more about it being a people's business--to what extent do the intangible factors go into consummating DAT deal? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222516) |
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Date: July 31st, 2012 10:11 AM Author: laughsome hunting ground milk (guy who doesnt know anything about anything) (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222495) |
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Date: July 31st, 2012 9:53 AM Author: Floppy Mahogany Boiling Water relevant to my interests. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222420) |
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Date: July 31st, 2012 9:55 AM Author: laughsome hunting ground milk (future bank teller) (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222432) |
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Date: July 31st, 2012 9:59 AM Author: pearl beady-eyed antidepressant drug nibblets (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222446) |
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Date: July 31st, 2012 10:08 AM Author: disgusting travel guidebook I do not think that in-house lawyering at a big bank is that attractive an exit opportunity. It is very commoditized work and you are not treated all that great. Certainly though we hire mid-level V5 cap markets associates to do it. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222475) |
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Date: July 31st, 2012 10:09 AM Author: pearl beady-eyed antidepressant drug nibblets Got it, thanks man. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222483) |
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Date: July 31st, 2012 10:13 AM Author: laughsome hunting ground milk thought that said crap markets. probably could say crap markets.
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Date: July 31st, 2012 10:14 AM Author: laughsome hunting ground milk what are your long term goals? what are the most coveted exit opps for bankers (besides becoming lawyers, ofs) (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222506) |
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Date: July 31st, 2012 10:20 AM Author: disgusting travel guidebook I don't know. Most coveted exit opps are to hedge funds and private equity, and those opportunities are mostly for analysts. At my level it's more like "become a more senior banker and then go be a CFO at some cool smaller company." (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222527) |
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Date: July 31st, 2012 10:46 AM Author: laughsome hunting ground milk lets say you need to learn about a brand new industry that you know nothing about. how do you do it? just do wikipedia?
same question but with a new company youve never heard of. do you just read their 10-k/financials (if available)? |
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Date: July 31st, 2012 10:53 AM Author: disgusting travel guidebook Bankers don't move between industries all that often: you specialize, and you learn about your industry organically by doing deals, talking to people in the industry, etc. When you start on an industry the #1 thing you do is talk to people at the bank who already cover it to get a lay of the land in terms of companies, what they do, what they care about, what drives their stock price, how they finance, what the M&A landscape looks like, etc. Much of the useful information for bankers resides in the heads of other bankers and part of the skill set is being a nice enough guy that those other bankers will help you get up to speed.
New company: yes, you look at some sort of public information packet (10-K, proxy, SharkRepellent etc.), you read research analyst reports, you see what your other industry clients think of them, and then you go meet them and say "hey, what do you want to talk about?" It's an advisory business, not a quiz: you don't get points for telling the company about themselves. You get points by listening to them and then finding something useful for them. |
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Date: July 31st, 2012 10:27 AM Author: elite goal in life 2011 all-in comp? 2012 expected? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222549) |
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Date: July 31st, 2012 10:29 AM Author: disgusting travel guidebook Mid six figures, mid six figures. More than I'd be getting at my seniority (senior associate) in biglaw but less than 2x what I'd be getting in biglaw. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222555) |
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Date: July 31st, 2012 10:29 AM Author: elite goal in life For a 5th year transactional/cap markets associate, best strategy for making the jump? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222558) |
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Date: July 31st, 2012 10:32 AM Author: disgusting travel guidebook What jump?
I mean, tell me what you're thinking. Do you want to go in-house, to banking, to some other area of finance? Why? What interests you? What skills do you have? |
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Date: July 31st, 2012 10:35 AM Author: elite goal in life (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222580) |
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Date: July 31st, 2012 10:40 AM Author: disgusting travel guidebook It's always better to target buy-side funds. Distressed investing has always been an area that is populated with former lawyers and if you can get a job doing that why wouldn't you?
That is somewhat tongue in cheek. The buy-side pays better for better hours and more prestige, ceteris paribus, but on the other hand you're on the buy side: you're evaluated on making good investment decisions. Can you do that? It's hard to know, as a lawyer, and if you can't your buy-side career will be short and unsatisfying.
The sell-side has worse hours, money, travel, etc., but if you're great at talking to clients and pitching business it's a better fit. The question is where is your skill set: hard analysis and decision making or soft client-service skills. And again in distressed banking ex-lawyers are common; try restructuring boutiques and also debt-heavy groups at big banks (restructuring, liability management, maybe lev fin but that tends to be more model jocks than ex lawyers).
If you want to go into banking, network, talk to your banker contacts on deals, etc. It's a people business and talking your way in the door is the first test of your ability. |
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Date: July 31st, 2012 10:44 AM Author: elite goal in life Thank you for the advice. One follow-up. Coming from law into the bank vs. buy-side debate, what type of comp discrepency can you expect? are we talking $100k or $400k? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222607) |
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Date: July 31st, 2012 10:45 AM Author: disgusting travel guidebook I have no idea. It's not something to worry about in year one; my guess is a fund would guarantee you less than a bank. It's that after five years of distressed trading at a top fund, if you make it that far, you're making $5mm a year, vs. $500k at a bank. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222612) |
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Date: July 31st, 2012 10:49 AM Author: Floppy Mahogany Boiling Water Do you handle FCPA compliance matters?> (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222631) |
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Date: July 31st, 2012 10:50 AM Author: laughsome hunting ground milk genuine 180 lol. tyft. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222636) |
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Date: July 31st, 2012 10:59 AM Author: laughsome hunting ground milk how butthurt are your banker buddies at all the banker bashing going on in ARE media? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222696) |
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Date: July 31st, 2012 11:01 AM Author: disgusting travel guidebook Not that much. You pretty much read an article misunderstanding what we do, get a little mad, and move on. It's not that big a deal and we're paid enough to suck it up. Back when Congress was talking about retroactive 90% bonus taxes, *that* was a big deal. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222714) |
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Date: July 31st, 2012 11:03 AM Author: brass glittery national Which clubs on the LES are completely dominated by BUFF AS FUARRKK V20 M&A BROttorneys, to the extent that bankers know better than to set foot inside? (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222729) |
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Date: July 31st, 2012 11:04 AM Author: disgusting travel guidebook Some of our analysts are LES/MePa/whatever clubbers, and actually so are one or two of our MDs, but I know better than to set foot inside any of them. (http://www.autoadmit.com/thread.php?thread_id=2010226&forum_id=2#21222740) |