Ask a former Wall Street investment banker (almost) anything

[BroXplode]

What's the trick to getting into an analyst program?

[squatlover]

Whats the best retail source for information on upcoming mergers and acquisitions? You probably used your own sources, but is there a comparable one for someone not in Wall St (excluding the obvious Bloomberg)?

[mezner09]

What's the trick to getting into an analyst program?

This. I need to know.

[proconsul]

What are your job duties as an MD?

Lead deal teams. Work with my coverage partner.

Depending on if your firm "cross-staffs" (MD,VP, Associate and analyst from both M&A and industry coverage group), or "co-staffs" (one person each level from one group or the other), your deal team is generally 4-8 people, except for bigger deals.

I did a $15 billion deal for a large telecom once. Our deal team had six people at the managing director level or above. In this situation, your life sucks.

What is your best advice to someone just getting into investing?

Learn finance. 95% of the retail market is throwing a dart at a board.

are you a doomsday prepper?

Not really, but I think I'd do better than most in a zombie apocalypse.

what would you say are the 3 most interesting things you've seen in your days on wall street?

I did a deal where structuring saved ~$5 billion in cash taxes. That was some pretty clever work by us M&A guys, if I do say so myself.

I loved being expert witness for the defense on shareholder class action lawsuits. The guys that the litigation trolls hire for finance work... let's say they weren't guys who would have been hired by real banks.

I met Bono at a meeting with Elevation Partners. Demonstrating why coverage guys (who are often salesmen types) hate us M&A guys, I listened to him say they had been looking for an acquisition of a certain profile for a long, long time.

So I asked him "... but you still haven't found what you're looking for?" and gave him a big ****-eating grin. My coverage partner would have shot me on the spot if he was armed.

are you happy at wall street ?
what did you study ? did u do perfect in school ?
should i rather try to become or doctor or go into investment banking ? (100% srs)
couldnt imagine the feel of having a pay cut and still making well over 100k.

I would have been a doctor if I had stuck to my planned path. I am not sorry I went to Wall Street.

Why did you retire?
What age did youstart?
How did you get into that position?(uni, internships, etc)
Will you recommend the same job to your kids?

The market sucked. I left on my own terms, but on Wall Street you never know if this morning will be your last as a banker, srs.

still in uni... kind of want to get into IB im in my last yr
debating whether i should minor in econ since i need only 2 classes for it. Debating if i should take fidelity internship I got over the summer... or if I should work at a broker firm that my grandma's neighbor owns.. he offered to sponsor me through it.
Also do you think i should take the BAT test my investments professor keeps telling me i should... and hopefully if i get a B in short term fin management ill be able to take my ctp
and srs wanna connect on linkedin

An internship at a large firm always beats one at a small firm, unless it's M&A at a recognizable boutique vs PWM at a large bank.

Salary?
Hours?
Does wall street do a lot of coke?

Coke? Not since the 80s.

My ending salary was $250K. My highest total annual comp was ~$2 million.

Generally, undergrads (analysts) make $150k/200k/250k in bad markets for a 3 year program before going to b-school or another job. In good markets closer to $200/250/300. That's total comp. Salary is about a third of that.

[LethalGunz34]

Why do PE firms tend to hire Ivy Leaguers regardless of experience? I graduated from a Division III and have been in the PE/Hedge Fund sector for 6+ years now. I'm really happy where I am at the moment and love my job, but I see a wide gap between actual experience and level of education (top business schools, Ivy schools, etc.) when decent companies are looking to hire someone. To me, it looks like the firms just want to show off their talent no matter the talent's knowledge in the field.

[BridgerD]

YAWWNNNNN....who cares

[LethalGunz34]

Coke? Not since the 80s.

My ending salary was $250K. My highest total annual comp was ~$2 million.

Generally, undergrads (analysts) make $150k/200k/250k in bad markets for a 3 year program before going to b-school or another job. In good markets closer to $200/250/300. That's total comp. Salary is about a third of that.

Wow, that's awesome man, good for you. Were you able to balance your life or was it all work work work?

[moondg29]

Generally, undergrads (analysts) make $150k/200k/250k in bad markets for a 3 year program before going to b-school or another job. In good markets closer to $200/250/300. That's total comp. Salary is about a third of that.

More recent banker checking in. Coming from the top group at a bulge bracket, analysts aren't doing 15-250. Right now it's about 120 first year, 140 second year, 170 third year, breaking the 200k comp barrier at the associate level.

Not sure if it has been answered before, but were you at a boutique? Or at a larger bank?

I also hopped to VC. Are you in DC since you're doing gov't work?

[SiNiStEr94]

XD or M&P?

[proconsul]

What's the trick to getting into an analyst program?

If you are in a "target" school, get into the on-campus process. This is where we make 95% of our hires, and this is the easiest way to get an interview.

If you are a "non-target" you need to network. Like a maniac. Cold-call bankers, ask for an "informational interview". Make the trip to New York and try to sit down with as many people as will meet with you. Analysts and associates can help as much as MDs, because quite honestly an MD is less likely to take a stake in recruiting.

Do your homework. Learn DCF and comps approaches. Know how to calculate valuation multiples. Most importantly, be a good guy. There are lots of smart people applying. We're asking you to work 100 hour weeks for 2-3 years straight. We're looking for (1) Someone we will like hanging out with at 4am when everything else sucks and (2) someone who will grind it out. Brilliant but unmotivated is a recipe for disaster. Smart enough and tenacious wins every time.

Last thing, for the most part... if you get an interview, you're pretty much on an equal footing. Once you're hired, nobody will care where you went to school or how you did there (until you go apply to PE firms or b-school).

Hopping for a meeting. Will be back in a bit.

[illbleed]

Does MD bring in business for the firm? Which position is the most sales/people/relationship oriented?

[Procta]

after working in WS, has your value in money changed in anyway? Do you believe in the USD or would you put more eggs in the self reliance basket

[myrongunz]

can a dude in his early 30's break into IB? also did u meet anybody that went to a top school in the west coast? (uc berkeley, stanford, etc)

[magog704]

how would you value a 20 person engineering firm. idk how you can say we are worth more than our book value and our refrigerator and shiit. im tryna sell this bitch before the money makers bounce.

[yage]

Current banker reporting in.

I'm based in Hong Kong, since I wanted to ride the Asian exposure wave. I work at a boutique I get my hands on every deal we do (M&A, cap raising, and working on an IPO)... but ultimately I want to move into PE, based in NYC. What's the PE recruitment like in NYC? Do they still only want NYC bankers?

[datboigene]

OP can i ask you to review my resume cuhzzzz

also my sister is a 3rd year and she made a bit over 300 last year

so OP could be right.. srs

[tino124]

Are the 100 hour weeks worth it?

There is no life outside of work... I can't even imagine that.

[calbaisey]

nice thread

[magog704]

you had a bad gpa as a history major? how did you get into yale?

[proconsul]

More recent banker checking in. Coming from the top group at a bulge bracket, analysts aren't doing 15-250. Right now it's about 120 first year, 140 second year, 170 third year, breaking the 200k comp barrier at the associate level.

Not sure if it has been answered before, but were you at a boutique? Or at a larger bank?

I also hopped to VC. Are you in DC since you're doing gov't work?

I worked in bulge bracket M&A groups until I was a VP2. VP2 to MD at a mid-size bank, more middle-market focused but some large cap deals, although very little larger than $2-3 billion. A couple of exceptions were a large PE club deal for a foreign telecom and a hostile on a cross-border mining deal, both $30 bn+.

Yes, what you say is very true. Comp is highly variable, and still is off the '07/'08 levels as I understand it. I'm also told that the market is cold for SVP/MD types, but actually very hot for AN2/3, AS1/2 types so I'm surprised that comp hasn't rebounded more for them

Why do PE firms tend to hire Ivy Leaguers regardless of experience? I graduated from a Division III and have been in the PE/Hedge Fund sector for 6+ years now. I'm really happy where I am at the moment and love my job, but I see a wide gap between actual experience and level of education (top business schools, Ivy schools, etc.) when decent companies are looking to hire someone. To me, it looks like the firms just want to show off their talent no matter the talent's knowledge in the field.

It depends.

Mega PE has always been pedigree focused. It is true even in coming out of an analyst program. KKR, Apollo, Blackstone and such have always tended to hire mostly GS/MS/JPM M&A analysts versus industry types, and it was significantly more difficult to get a solid look if you were tier 2 M&A or industry unless you were working for Ben Lorello or Kenny Moelis.

It's just the way they are.

Whats the best retail source for information on upcoming mergers and acquisitions? You probably used your own sources, but is there a comparable one for someone not in Wall St (excluding the obvious Bloomberg)?

Honestly, the only place that has a decent rumor mill is the industry rags (like healthcare newletters etc.)

Do the chicks in NY actively try to get with guys on Wall St?

I wasn't really part of that scene, so I have a skewed view. Yes, there's the whole "models & bottles" stereotype, but I found that reality was a lot less appealing. Let's face it, for a lot of girls it's more appealing to date the artsy bohemian guy who barely makes enough to pay his rent than the analyst who you never see.

We had a joke T-shirt when I was an analyst - "Top Ten Lies Told by _____ M&A Analysts". It had things like:

-At least I still have my health
-You get used to the all-nighters
-I hope the weather is nice this weekend
-I'll meet you for drinks at 8:00

The #1 line was:
-Honey, I won't break this date... I promise.

[vvvaaa]

can a dude in his early 30's break into IB? also did u meet anybody that went to a top school in the west coast? (uc berkeley, stanford, etc)

I have a friend who went IT->IB when he was mid 30s. I'd suggest you only do it if you're extremely motivated, the guy had to eat chit and fire for years before he was "there"

[proconsul]

Are the 100 hour weeks worth it?
There is no life outside of work... I can't even imagine that.

It is worse than you can possibly imagine as a junior banker. Think about it this way - to work 100 hours a week you have to work from 8am to midnight every night of the workweek. Then 12 hours on Saturday. Plus 8 on Sunday.

And 100 hours isn't the limit... it can be the norm. Yes, some groups work 80 hour weeks. But not M&A. My worst week was 144 hours, not including the time it took me to get to and from work. That came at the end of a stretch of 6 110+ hour weeks.

I went in to work on three hours sleep on Thursday morning, and stayed overnight Thursday and Friday. On Saturday night, I wrapped up and went home around 11pm. I walked into my apartment to find my girlfriend on the phone with one of my other VPs, who was telling her that she needed to tell me to come back in to work on his deal. I dropped my bags and turned around.

I finally came back home at 3am on Sunday night. I was so tired that I sat down on my bench, leaned over to untie my shoes, and woke up face down on the floor two hours later. True story.

The good news is that it gets much better as you get more senior.

By the time I was an SVP/Executive Director, I loved my job. I rarely went home after 8:30. As an MD, I traveled the world and advised CEOs, Boards of Directors, and Ministers of Finance. The only downside when you get senior is that you're always under pressure to generate revenues, and you're always on call. I spend a lot of evenings and weekends on my cell phone while I walked my kids around Central Park.

Remember also that Wall Street is a young person's game. It's a very flat hierarchy and it's a very fast rise. From the day you enter the firm as an Associate (analysts are technically non-professional hires since they are expected to leave for b-school) to the Day you make MD is ~10-12 years (yes, there are people that take 16-20 years to do it, but that's rare). Generally, promotions are regular, and done by class. 4 years as an associate. 3 years as a VP. 3 years as an SVP, and then you become eligible for MD. MD can take a while, because it's a very complicated process. I made MD in nine, which was very unusual (minimum is generally ten).

You are also getting paid decently through that period. In good markets when I started in the business, the rule of thumb was that you started ~$300k and got a 100K raise a year. That's been compressed a lot, so not the raise is probably closer to $50 per class, but it's still ok money.

One tip for the networkers out there... don't email me at night. You may think it's convenient for you, but it goes to the blackberry I have on my nightstand. You may think it's a polite, friendly "can I meet you" message, but you just woke me up wondering if something just blew up and I have an irate CEO who wants to talk. You are officially persona non grata in my eyes.

you had a bad gpa as a history major? how did you get into yale?

I had family issues that forced me to travel back home regularly during the school year. I was actually a Molecular Biophysics and Biochemistry major at the time. The MB&B curve was not particularly forgiving for someone who was absent from class and lab regularly. I was a 1560 SAT (back in the 1600 max days), 780 GMAT, so I'm not a dullard. but the GPA did take a lot of explaining, both to the banks and the b-school adcoms.

[srom12]

i want to get into something like this when will it be my turn?

also mirin salaries, past jobs, knowledge and success brah gjdm

[proconsul]

OP can i ask you to review my resume cuhzzzz

also my sister is a 3rd year and she made a bit over 300 last year

so OP could be right.. srs

PM it to me. I'll try to look at it next week.

As this thread slows down, I'll try to give more detailed, comprehensive answers. I just wanted to work through the initial flurry of activity, so please don't mind the short, superficial answers.

[magog704]

at least you are smart. you guys probably deserve the pay. my roomy was at ernst and young and workin there turned him into a huge phaggot. i thought he had ptsd from workin there, coming in at midnight every night drooling. people complain about banker compensation but not kim kardashian compensation.

did you come from money?

[nick187]

So you are going to shoot me with that gun ?

I don't understand insecure kids with gun pics.

[proconsul]

Do you think another 2008 like crash is coming soon? All this **** with QE and the debt ceiling makes me scared dump a lot of resourses into the market. Prices seem to be artificially inflated.

This is a real issue for the market. Because it's obvious that we've got a bull market that's fueled by cheap capital - clearly valuations are running ahead of economic growth in GDP terms, or profit growth in market terms.

It actually has kind of an interesting side effect too. Speaking as someone who works in venture-land now, the general feeling is that the classic VC model is broken. In my opinion, this has roots in Fed policy. Why? Because when you think about growth equity, or even more acutely venture capital equity, you are talking about non-debt sensitive investing.

For private equity investing in lower growth, high cash flow businesses, their returns are highly debt sensitive. That's why PE shuts down when debt capital markets got challenging in 2008/9. (I can run you through the math of why if you want).

So keeping a near-zero monetary policy for much of the last fifteen years means that institutional capital has been redirected towards PE versus VC. The bar on "acceptable" VC returns has shot up, because the ordinary return on debt-driven PE has been magnified by a favorable rate environment. Thus, low rates have killed VC, and to a lesser extent IPO-driven exits for VC.

In effect, the Fed has killed venture capital by distorting the return profile to make private equity un-naturally attractive for returns to institutional investors.

This is likewise going to demolish much of the PE world when rates rise. Why? We've created a whole PE-to-PE universe in the deal ecostructure.

Unlike 15 years ago, there are now a set of companies that basically get transferred from one PE to another, bypassing the public markets entirely. But what has driven this business is the low debt/high leverage ratio tolerance of the lending community. What happens to portfolio companies when high yield goes to L=800 from L+500? Or total leverage goes from 3x senior/6.5X total to 2x senior/4.5x total?

Well, valuations tank of course. Just you watch, there is a big shake-up among PE firms coming, particularly among the middle-market PE firms.

And guess who is heavily invested in PE in their portfolios? Universities, pension plans, unions, insurance companies, and state governments.

Things will get interesting.

[MegaaRon]

Would it be possible for an accounting undergrad to get accepted into a good masters program for finance? I have been reading the general requirements and it doesn't seem accounting is too favored.

[proconsul]

So you are going to shoot me with that gun ?
I don't understand insecure kids with gun pics.

I served in the infantry. I've been in combat situations on several continents. I like guns.

Thanks for coming by. Cya.

[LethalGunz34]

what's the longest you ever worked straight for with no sleep?