All About Equity Capital Markets: How You Get In, What You Do, and What You Do Next
Ok, no more questions about Equity Capital Markets: this one interview with a reader should answer everything on your mind.
We cover how you get in, what the recruiting process is like, what you actually do in capital markets, the culture, and the exit opportunities.
Equity Capital Markets is sometimes labeled Structuring & Origination, and can involve more than just IPOs – for example, underwriting equity derivatives, convertible debt, and hybrid instruments may all fall under the ECM label.
The department also hosts teams for private placements and syndication.
Capital Markets Recruiting
Q: Can you tell us how you got started in ECM?
A: I started as a generalist in the Analyst pool and was eventually placed into the Equity Capital Markets group.
Like any other placement process, the choice was made on the firm’s need and what experience I could bring to the table (ex: investment banking summer internship).
Q: Ok, so you didn’t recruit specifically for ECM – but I’m guessing you’ve interviewed lots of people looking to get in. What’s the recruiting and interviewing process like for ECM?
A: It’s not much different from normal investment banking interviews.
You’ll still get the typical questions on accounting and valuation, but you need to show more of an interest in the markets : how indices are performing, previous issues in a sector you’re interested in, and if you’re interviewing for a convertible debt position you should know how calls, puts, and equity derivatives are used and why they’re used.
They’ll also focus on why ECM vs. other groups – you want to say that you like the markets but you’re still more of a banker than a trader.
Covering derivatives, you’ll get a chance to close hedging trades, and work with traders to see if a convertible could be done in the current market climate. Equity originators typically interact with the sales force and are focused more on the story of the deal (ex: use of proceeds).
A Day in the Life
Q: So what do you actually do in Equity Capital Markets? What does an Analyst there have to do each day?
A: First, note that working in equity origination is different from covering convertible offerings. Both are under the ECM department; other groups include Syndication and Private Placements as mentioned earlier.
On the equity side, most of your work consists of updating market slides, creating case studies on recent equity offerings, working on internal memos, and drafting up selling points for equity issues that are about to launch.
The “grunt work” consists of looking up stock ownership and analyzing the buying and selling history of stocks.
The convertibles team is significantly more technical because you’re working with derivatives and you need to develop valuations of convertibles and produce derivative structures suitable for the client.
Just like other types of financial modeling, the math isn’t “hard” but it is a lot different from what you learn in any training program – so there’s a learning curve when you first start.
Q: Ok, so there’s a mix of both qualitative work and quantitative work in ECM, and that the quantitative work with convertibles is a lot different from other types of financial modeling. What’s a day in the life of an ECM Analyst like?
A: The day usually starts at 7:30 AM – usually Syndication is the first group in the office.
The convertible team shows up around 8:00, and the staffer shows up around 7:45 – 8:00.
The actual workplace for ECM is very similar to a trading floor – each computer had Bloomberg, FactSet, and Capital IQ, and the floor is noisy because senior bankers are on the phone with clients and analysts are responding to requests.
After I finish up reading up on the markets and recent news, my Associate stops by around 8 AM with the work that we need to do for the day.
Usually I’m asked to update slides with market data needed for pitches, create case studies on recent equity offerings, make ownership diagrams (show how the composition of institutional investors in stocks changed over time), and create new slides based on the senior banker’s ideas.
Around 9 AM, I get my assignments on the convertible side – updating market summaries, case studies, and convertible valuations for upcoming pitches. Most pitch books have a market review slide to keep the client updated on current deals.
The rest of the day is taken up by these tasks, along with requests we get throughout the day – unlike M&A or industry groups, you do more “take 30 minutes to respond to this request”-type work in ECM. This is the case because you typically cover more than one industry vertical.
I usually leave around 7:30 or 8:00 PM, so the average day is around 12 hours – less than what the average banker works.
The convertible team works somewhat closer to “banking hours” more often and sometimes left at midnight or later, because the work is more quantitative and requires more frequent updates.
Q: Wow, only 12 hours a day – are you sure that was investment banking?
You mentioned a few times that the work in convertibles is more quantitative – for those not familiar with it, can you describe what exactly you have to do?
A: As long as you’re advising clients on raising capital, it’s investment banking. The career path for more senior bankers starts off in coverage and moves to capital markets.
The main tasks for the convertibles team include valuing convertible bonds, creating convertible bond term sheets, and then creating payoff diagrams or schedules for investors. Here’s a representative sample of other products being pitched.
There are a couple of ways to value convertible bonds. A simple method involves looking at each component – the regular bond and the option feature. Inputs to the models include the volatility of the equity and the credit risk for the bond component. Another method is the binomial approach, examining the value of the bond if it were in debt form or equity form at various points.
The convertible bond term sheet simply states the key features of the bond – conversion scenarios, interest rates, maturity, anti-dilution provisions, covenants, and so on (sample term sheet).
The payoff diagram just shows the profit/loss to convertible bond investors at a range of share prices – it’s more complex for convertibles, but you can see a simple example for options right here.
Murders & Executions
Q: Ok, I know almost nothing about convertible bond math so let’s abruptly switch topics. You mentioned before that the equity side had a lot of qualitative work and that convertibles were more quantitative, but how much time do you spend on pitching vs. deal execution?
A: The breakout of my time is something like this:
- Pitching: 60%
- Processing Internal Memos: 10%
- Deal Execution: 30%
Keep in mind that it’s not uncommon to spend over 50% of your time pitching in investment banking, unless your group happens to be very busy with clients.
Q: Ok, so let’s say you’re working on an IPO. What type of work would you do and what would the industry coverage team do?
A: First, note that there are really 2 roles for banks in an IPO: book runner and co-manager.
Book runners do most of the work, get the majority of investors, and collect the largest fees, while the co-managers are proportionately less involved and get lower fees. At the book runner level, analysts will develop sales force memos that will highlight selling points and risks for the client’s security.
Most bulge bracket banks will only be involved with IPOs if they serve as book runners, while boutiques and middle market banks fulfill the co-manager role.
In terms of the IPO process itself, both ECM and Coverage are involved:
- IPO Valuation Model: The industry coverage team begins the model with capital markets’ assumptions about the appropriate discount and how much can be issued.
- Customer Due Diligence Calls: Mainly coverage.
- Sales Force Memo: ECM is responsible for this one – we have to analyze and understand the company, and then summarize the key points for the sales force so they can properly pitch it to investors.
- S-1: Initially the lawyers give us a template, then the industry group makes their additions, then ECM provides feedback, the lawyers weigh in, and this cycle repeats dozens of times until it’s done.
- Road Show: The coverage bankers are responsible for the road show, but every once in a while ECM gets to see a sales force presentation.
Culture & Lifestyle
Q: So what’s the culture of the ECM group like? I’m guessing there are fewer “Patrick Batemans” if most people leave the office by 7:30 or 8:00.
A: Yeah, that’s accurate. The equity, syndication, and private placements teams are very casual and relaxed – most people play sports, have interests outside work, and everyone is easy-going and approachable.
There is no real “face time” on the equity side – if you’re done at 7 PM, you can go home and no one complains about it.
The convertibles team is more like traditional banking, and staying late / getting saddled with face time is more common.
You’ll get asked to stay late and help with more random tasks and projects in convertibles vs. the equity side.
Q: What about the pay? How do base salaries and bonuses in ECM compare to other groups?
A: Base salaries are standard across all investment banking groups, at least at large banks – so they were identical to what you’d get as an Analyst anywhere else.
Bonuses are dependent on group performance as well as how well the analyst ranks, so it’s hard to generalize there.
Exit Opportunities
Q: So what types of exit opportunities do you have access to if you’ve worked in ECM?
A: You have 3 options:
- Move to a coverage group.
- Move to a hedge fund in an ECM / markets-related capacity.
- Move to an investor relations firm.
The skill set in ECM is more niche: the modeling and analysis is similar to what an analyst in a coverage team would do, but you look at the financial statements in different levels of depth. For example, the valuation of a convertible bond has little to do with the company’s “story.”
You do need to understand those concepts in ECM, but you don’t actually create the models yourself – so it’s more difficult to get into private equity or groups that require a lot of modeling. If you are placed in ECM, you should still review how trading comps are put together, how transaction comps are done, and learn how to walk through an operating model to see how each part fits together.
Q: That makes sense, but what about on the convertibles side? You said it was more technical – so do you have better exit opportunities there?
A: Theoretically, yes, you should have better exit opportunities and you should be able to go to hedge funds that do convertible bond investing.
It’s still difficult to move into PE or anything that requires coverage modeling because your skill set – though it’s more technical – is still different from what’s required in those fields.
Q: So what advice do you have for someone placed into ECM who wants to move elsewhere?
A: Many people sign up for ECM after they complete their investment banking years – it’s an easier schedule, though you can still be on call when the client has a question or request.
As an analyst, it’s very important to know how the valuations are done and how the client’s operating model works.
When preparing to transfer to another group, focus on what’s transferable (hint: making case studies, market slides, working on internal memos) and be sure to hone in on how the groups are similar rather than their differences.
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Hi Brian,
I have an unrelated question. I go to a non-target school now and am trying to go to a target for a Masters. I applied to Duke’s MMS program (it’s a very new program). I also applied to a couple of programs in Europe Oxford/LSE/HEC Paris.
Assuming I get into all of them (big assumption, I know) which one do you think is going to be most beneficial in terms of US I-banking recruiting? Duke’s program is very very new (it’s in it’s second year) and online rankings consistantly put HEC over Oxford and LSE. However, more people in the US tend to know Oxford/LSE as opposed to HEC.
Thanks.
I love your site.
I would say Oxford/LSE for the reasons you mentioned.
Even over Duke?
Thanks.
The only issue with Duke is that the program is new. But I think it would be on-par anyway because Duke is better-known in the US.
What are your thoughts on Equity Research positions? Is it still considered investment banking? What would an analyst position entail?
No it is not considered the same as investment banking. It’s more like a mix between IB and S&T where the analyst follow individual stocks and makes recommendations and writes reports on them.
UVA has a much better Masters program than Duke if you want to stay in the states. Their undergraduate business program is ranked #2 – I would definitely go there over Duke.
UVA has a much better Masters program than Duke if you want to stay in the states. Their undergraduate business program is ranked #2 – I would definitely go there over Duke.
Great,
I started my ECM internship today and now I understand it way better ;)! Thx
But I came home right now :) Maybe the hours differ throughout continents
If anything, I would expect the US to have longer hours than Europe or other regions but your mileage may vary…
i graduated from a non-target and i still cant find a job . . . (no internship or other relevant work experience at all), should I go do a Master in a target school or cold-call a MD 50 times a day to get an inertview ?
Depends on when you graduated – if it has already been 6+ months I would think about Master’s programs at top schools. Otherwise, keep networking.
i have completed my undergraduate but not yet graduated . i am from aus…
I would keep networking and see what the response is – it can be a bit less effective in Australia but you should try and gauge the reaction first.
Are you still going to do a equity S&T article as you stated at the end of the fixed income post? Or would you describe S&T as comparable in both equity and debt?
Coming up in about 3 days. It’s quite different.
Is it difficult to transition from ECM to corp dev or strategy for a F500 company?
M&A would certainly make it easier, but you can do it from ECM as well – a lot of times F500 companies don’t even care what kind of banking you did as long as you worked at an “investment bank.”
What about debt capital markets?
Interviewing another reader on that topic soon – up on the site in next 1-2 months
Off topic: M.I.T. Sloan or HBS for an MBA degree and pursuing BB IBDs (Europe & US)?
MIT: (+) Track in Finance. (-) Second to Harvard in Europe?
HBS: (+) It’s Harvard, well known, prestige & lower acceptance rate? (-) More entrepreneurial focus, no finance track.
I would say HBS because it’s better-known within finance despite the lack of finance track
Kind of off topic as well but…
When does crossing over into a F500 company become a good exit opportunity? If you work 2-3 years as an analyst will you be able to get a good job at a F500? Or do you have to be at the associate/vp level?
You can move in after 2-3 years but it will usually be at the lowest level at the F500 company – not necessarily a bad thing, but you won’t jump in and be head of M&A after 2 years of banking.
What about going back to business school? How many years are people in banking before they do that?
2-3 years
my friend is working as a Trading Assistant in GS. i am confused whether Trading Analyst and Trading Assistant is the same thing ?????
No, usually trading assistants have less responsibility and don’t do as much (or any) actual trading.
would dcm involve pretty much the same type of work as ecm but on the debt side?
Whats the difference between leveraged finance and dcm?
DCM is actually a lot different – more technical and modeling intensive most of the time. LevFin and DCM are very similar, but usually LevFin is more transaction-based and DCM is more markets-based.
Can you be more specific on that?
Like how is it different and is it possible to move from DCM to LevFin or M&A?
Also, what are the exit opps? are they more HF Or PE
Thanks
It depends a lot on the bank, some places DCM is almost the same as LevFin, other places it is different. DCM is responsible for tracking issuances in the market, updating slides on the debt markets, and so on, and occasionally does some quantitative work; leveraged finance is more closely integrated with deal teams and does more modeling work for potentially debt issuances. You can move around internally; it may be slightly harder to go into PE/HF from DCM vs. LevFin
I am interning in Global Capital Market’s Debt Capital Market division so I think its more Lev Finance. Is it rite?
Hard to say without knowing the bank, but as I mentioned DCM and LevFin are often very similar anyway.
Hey,
I am a sophomore doing finance at a non target school and I am trying to get into investment banking. I have been emailing local and non-local banks for intern positions, but so far, i haven’t received a lot of answers; I have a 3.81 cumulative GPA and I have done two internships so far, none of them in investment banking unfortunately; it was more economic research and forecasting. How do you thing I can increase my chances to get an internship in investment banking given that I am an international student(a lot of banks require citizenship and I have been rejected because of that) and I come from a non target school?Thanks.
PS: You are doing a great job with this website..keep it up
You should call them instead of emailing, for starters… also try targeting any banks that focus on the country or region you’re from originally.
I am very interested in working ECM but I am also interested in PE and I absolutely have the intent to go to business school. I am torn on how I should approach these goals though.
1. Can someone in ECM get into a top Business school as easily as an M&A/LevFin guy? Or is it like the harder the group, the better the experience, the more weight on the Bschool resume?
2. If it’s possible to get into a top Business school from ECM(I’m thinking H/S/W–definitely want a top 10 school), do people move to PE after getting that degree?
Thanks! Awesome site btw..
1. You can still do b-school. M&A/LevFin might have a very, very slight advantage. All bankers look the same to b-school adcoms.
2. Keep in mind that it’s extremely difficult to move into PE AFTER b-school no matter what background you’re coming from. You really need to do PE before to have a good shot at all. That said, ECM would definitely make it harder than M&A/LevFin pre-b-school.
Would you say that converts is more market-based or transactions-based? Also, do the majority of analysts that start off in converts stay there for their careers?
Thanks for this post! It is very helpful.
Converts is more transaction-based based on what this reader mentioned in our interview, but the transactions are all financings as opposed to M&A. I don’t think most analysts “stay there for life,” but if they do want to continue on in the field it’s common to go into convert-related areas e.g. HFs that invest in them.
Hi,
I’ve got 2 questions :
1. Is the capital markets group (ie. ECM, DCM) considered i-banking? What do people say capital markets group is a combination of IBD and S&T? Also, from what I understand .. isn’t ECM and DCM examples of a product group? Why is it sometimes considered to be in a totally new division call “capital markets group?”
2. this is for a SA placement. I was gunning for going into an pure corp fin. industry coverage group … is it possible for SAs who worked in the capital markets group to ask for a transfer to their industry groups for FT?
Yes, ECM/DCM is still considered i-banking, but some banks organize it differently and might classify one or the other under S&T or put it in a separate capital markets group.
It’s usually easier to transfer elsewhere after a summer internship vs. making the move full-time, so I would say yes, you can do it, but you need to network and get to know people in other groups to have a good shot.
I’m gonna be joining StanChart soon. They don’t seem to have a LevFin team (based on their website). Does that mean their DCM and LevFin teams are one and the same?
Not 100% certain but I would assume so, yes
Wow ! My tipical day during my ECM Origination internship was completly different ! From 9 am to midnight usually. Well maybe because origination is usually done by coverage / m&a teams that’s why my typical day was more IBD hours.
here is my reviewk, it’s more about Origination, no syndication / structuring / Equity linked team
It’s almost the end of my 6-month internship in the ECM origination team of a French bank in Paris (think Socgen, BNP) and I guess it is highly time to talk to my boss about what I want to do in a near future.
Atm, I’m a sophomore in a French business school ranked in the top 10 though it is not a target for BB but still happen to place some alunmi there in decent groups.
My job as an intern consisted in helping analysts and associates in their pitches of ECM products (IPOs, convertible bonds and other equity linked products, stake disposal, spin off / carve out, capital increase / rights issues etc) i.e company profiles, stock profiles (using bloomberg, datastream etc), case studies, equity stories, a lot of excel work with various models of capital increase for example, valuation (multiples mostly).
Since there are no industry groups in here, I worked with all the D/MD of the team, and particularly with the real estate boss (with whom I participated in an execution of a stake disposal from the pitching to the writing of the press release) and with the TMT team.
The thing to keep in mind is that here the origination team does the pitching and there are two independent teams which are structuring / execution and the equity syndication one that help when we get a mandate. And we had a very good year with the reopening of the French IPO market (CFAO), and many capital increases and convertible bonds so I gained a very good exposure.
I think it varies by bank/region… this interview with a reader in the US at a bulge bracket investment bank, so the division of labor was more concrete. Pitching/execution similarly varies by how involved other groups are with the process.
Hey Scratchy,
A couple questions here– do you speak fluent French? How did you get your internship? I am interested in doing a similar thing over the next semester.
Thanks.
Scratchy, so in the end did you end up getting a FT offer? If you did, did you stayed on in the ECM team or transferred over to a coverage group?
Oups I put the first paragraph which was not part of the review but of my question in the wso forum ! sorry for that
==> To M&I. Yes you’re right, it differs and I would like to know where it is like the bank I went to because I liked both the pitching / equity story / valuation things and the market update parts etc
==> To banker11, it was a French bank in Paris, famous for various reasons, but which does not recruit during summer internships. In fact, threre no summer internships as we all know it. It s all about six month / one year internships and after that you may or you may not receive an offer. It s not that well organized and clear either for the team or the trainee. So at the end, and since I still have more than a year and a half of B school, I did not get any offer BUT I’m trying to keep contact with them maybe to get another intership offer in Acquisition & leveraged finance or in M&A since I got a good feedback from the junior team.
==> I don’t think it’s easy to transfer to another group. I think you have to do another internship in that group to be hired.
If you need more info, send me an email using the wso forum
M&I –
I just got placed into ECM, not by choice. However, I am very interested in pursuing PE/HF, and was hoping to transfer to a coverage group. What is the appropriate time to make the move and how?
Toward the end of your first year / at the very end is when you should make the move, just so you have “enough” experience and can actually network.
http://www.mergersandinquisitions.com/lateral-hiring-101/
M&I -
Love the site! I am interested in ECM largely because I am curious about the markets, ultimately may want to move into an investor relations role, and of course the thought of 12 hr days is much more appealing than traditional banker hours. However, I’m wondering if a traditional coverage analyst role at an ibank opens up more exit opportunites than ECM?
Is it easier to move from ECM to a coverage role or M&A or vice versa?
Thanks!
Yes, coverage would open up more exit opportunities.
Probably easier to move from coverage / M&A to ECM rather than the other way around.
Do you know of any good sources of information about careers in investor relations (for a PE or HF for example)? Do you know anything about those careers – salary, lifestyle, career path, etc.
Thanks!
I don’t know of much but I would assume it’s fairly similar to something like private wealth management – better lifestyle and hours, but less room for advancement and lower pay.
What are bonus like? I just got into ECM thanks to the programs you sell FYI.
Any BB ECM numbers for an Analyst?
Bonuses are usually lower, but I don’t know by how much. The interviewee here didn’t know specifically when I asked him either. I would probably expect 30-40% less than what analysts in other groups get, due to the reduced hours and fee potential.
I subscribe to your modeling programs, any specific recommendations for ECM?
Most ECM groups are not very modeling-intensive – the main tasks are IPO modeling (very simple – just assign a per share price and work out how much capital the company gets after fees) and public comps (covered in the program). Convertibles get to be more complex and it’s actually quite difficult to learn the math there on your own, but if you understand the basic concepts it’s not that difficult to pick up.
Yeah I was looking for more on convertibles. I made a good impression with the MD in Convertibles and would like to focus there (I think), it also seems more interesting to do everyday. From what I gather converts tend to work longer hours than the rest of ECM.
Thanks again, your interview guide was helpful, and the modeling section helped me brush up on stuff, and gave me better confidence for my Superday. Im a non target—>BB guy aswell.
After my SA I”ll send you synopsis, maybe a best day/worst day.
I’ll see if there’s anything useful on convertibles but honestly it’s pretty hard to come by that information – I only know the basics so a lot more research would be required.
Congrats on the internship and let me know how it goes.
Whatever I learn, I will tell you. My assumption is, I will see a bit more of the syndication desk and converts since I made large acquaintances in interviewing with in those particular groups.
I suggest you put this ECM article in your specifics groups category for easy finding too.
Thanks for the suggestion, there are now too many articles here to list below so we’re going to make everything available on separate pages in an upcoming redesign of the site in a few months.
Hi,
If I am an M&A lawyer thinking to transition into investment banking, do you think ECM would be a realistic transfer? If so, how would you sell your skills as a corporate lawyer in an interview to attain this type of position. Also what are the exit options, do you think investor relations for a hedge fund is a realistic long term goal. Thanks!
It’s harder to get into ECM if you’re doing M&A law currently, M&A would be a much easier transition. Otherwise you would have to talk about your experience with equity issuances which is probably not substantial if you do M&A law. As mentioned above, typical exit options from ECM are investor relations / hedge funds.
ECM Coverage at US BB in London.
Hours are closer to 08:30 to midnight, with weekends being fairly common. Work is quite similar to what was described, more execution related work though. Converts is a lot less like a banking team than described here (ie. no facetime) though they work long hours (very good team though). I’d say ECM coverage did more types of work than the interviewee described. He makes the job sound too easy. The fact that the coverage groups were so small (in Europe it was per country, and each country group was on average 1 analyst and 1 associate) meant you were always “on call.”
Hi. Im an undergrad working at JP Morgan Chase. This is my first year at work and I plan for MBA in a year of two. However, I am a part of TSS- Cash Operations, which is not related to Investments in any way. My ultimate aim is PE or IB. What should I do for that? Should I stick around till my MBA or should I switch immediately? Its been about 2 months at work. Also, opportunties for Undergrads in the world of Investments is limited to Operations/Back office roles if you want to work with one of the top banks. One more query. Would MSc in finance at LSE be a decent option or an MBA?
Switch immediately if you can, harder to switch after MBA – undergrads can do anything, not just limited to operations / back office… read all the case studies on this site. MSc is good, check out the Master’s program article under Recruiting at the top.
Ive always wondered whether an Analyst to Associate promotion at IBanks exhist. If you look at the MSc finance course at LSE, the placements have all been analyst postions at IBanks. Is it on a contractual basis that the employee has to complete his MBA after the contract ends for him to become an associate or would he be promoted?
Yes it exists, MBA is not required. Bankers do it mostly to take a break
Hi M&I
I will be offered a ECM analyst position in a MM IB. But my goal is to move to either ECM or coverage in a bigger but non-BB IB like BNP, Barclay,or Nomura in 6 months to 1 year. I have pretty solid connections but still worried about the possibility of this kind of move. Could you give me any advice or how should I prepare for this move.
Reach out to headhunters as soon as you have around 6 months of experience, network with alumni at those places, go to events and information sessions… headhunters and alumni will be the most helpful
Hi M&I
I recently accepted a DCM internship at MS this coming summer and was wondering what can I do to prepare?
I recently did some equity research internships therefore know a little about modelling and DCF
Thanks
Learn about debt, go through sample LBO models, read up on debt deals in the WSJ Deal Blog
Furthermore, I know that HK and CHina are more capital raising countries and the M&A industry is not even 1/10th of USA or UK’s. In terms of bonuses, is it more advisable to choose either ECM or DCM as oppposed to M&A or the high fees in M&A more than compensates that?
Thanks
It depends whether you want to work in those countries long-term or move back to the West… if the former, ECM/DCM might be better, otherwise M&A is still better.
Just to clarify your response, are you saying that ECM/DCM will lead to a higher total comp in HK/China. How bout if you are thinking in terms of PE or setting up your own PE firm in the future in Asia? Is there less prospect of career advancement in ECM/DCM in Asia for PE or are PE in Asia more concerned with equity raising as well?
Thanks
I don’t think it will lead to higher compensation as those areas are not much different at the entry levels anyway. Setting up your own PE firm should not factor into your decision because that’s something that happens 20 or so years into the future and is not influenced by where you started. Not sure about the last question.
Hey Brian,
Great interview as usual. Mind if you could scour your resources and contacts to muster up an engaging interview with person involved in equities research? buy side/ sell side who cares!! Equities research info is so scarce and dispersed, I seem to only pick bits and pieces from the comments of your articles. Is this simply because ER is a dying/endangered role?
Cheers,
Ben
It’s on the list but it’s extremely difficult to find someone because it’s such a small industry / the only former ER person I know is not a good source of information.
Hey Brian,
What exactly is private placements? Is it essentially a secondary offering except done at a discount with a prearranged group of institutional investors? What would you do in a private placements group?
Thanks!
Private placements are similar to IPOs but they’re sold to a much smaller number of investors and they’re not on the public markets. The work is very similar to ECM, e.g. more qualitative and less modeling/technical work.
I need your help in making a decision regarding my career path. After going back and forth for the past couple of months i’ve come tot he conclusion that I have two paths in front of me, and I need your help in deciding which path to take. Some background info first: I’m 34 years old, graduate from Duke undergrad, econ major, not a great GPA – played football while I was there (not an excuse by any means but was a major distraction away from studying and i got a career ending injury), worked mostly in finance in my career and was able to work for a boutique M&A shop for a year and a half before I got layed off because of the recession. That was 2008, I have not been able to get back into M&A/I-Banking/PEG (most potential employers tell me that Im either overqualified or that I need and MBA) and currently considering going to business school so that I could potentially go directly to PE, which is the goal.
Option #1: I know you dont want anyone discussing the CFA – but my thought is to take level I to make up for my low GPA (along with me crushing the GMAT) hoping that it will help me get into a top tier b-school and then working to get into PE after i graduate…
Option #2: simply just trying to crush the GMAT hoping that its (along with my experience) enough to get me into a top school and onto a PE job.
Please let me know your thoughts.
Best,
- Will
Definitely #2 – at this point your age and work experience are working against you and the CFA won’t help with either of those.
It seems like those banks are not hiring currently.
what time would be a good for hiring? for Lateral hiring?
If you do a search for lateral hiring you’ll see guidance there… full-time recruiting happens in August-October, internships are December-February, and lateral hiring is year-round but mostly in the summer as people leave.
I am in mu second year of business at a top 50 school in U.S. I want to get into ECM. I am presently working as a Private Wealth Management Advisor. Any ideas or skills or positions I should be looking for?
There’s not much specific to PWM that you need to know – get referrals through existing clients, co-workers, and so on, and talk about how in your PWM role you follow the markets all the time which makes you perfect for ECM since you always have to update clients on new investment opportunities.
Hello M&I (Brian):
This is Kenneth…Just wonder how does a guy like myself, with 6 years of engineering (mechanical) experience from an un-related-to-investment-at-all job, break into or get my foot in the door of Equity or Debt Capital Markets? I buy/take your advice that an MBA from a Top Tier School is almost the only way to start, then upon graduation or internships, and lots of luck and hard work, I should be able to make the switch and get into Finance/I-banking, BUT recently I have heard that Investment Banking business such as M&A, PE, VC are so aged biased and background biased, so if I am not that young (I am 30 now), then would Equity Research, DCM or ECM be easier to get in for a guy like me in my situation? Please advise to the best of your knowledge.
THANKS!
Regards,
Honestly not really – they might be a little easier than M&A but not by much. I would suggest a solid pre-MBA internship and then a top MBA program. http://www.mergersandinquisitions.com/age-investment-banking/
Hey M&I,
Wouldn’t there be a lot less to do for those on the equity side right now due to the lack of IPOs?
Perhaps but this site isn’t really focused on the “right now” – the market moves in cycles.
Hello,
I saw someone who graduated and then worked in marketing for 2 years and was able to move into ecm at a Bb.
Is that common? Granted that the barrier to entry is not too high…ecm is not a quantity role like eq. Research
Quantitative I mean
It is definitely not common, in fact that is the first time I’ve heard that kind of story.
Just wondering if there will be a DCM article at some point. Also, is ABS issuance done by DCM groups at IBs?
Thanks! Love the site!
Yes, there will be – have a few lined up to contribute but haven’t done the actual interview yet. Next few months. Honestly not sure about ABS and whether it falls under corporate banking or investment banking.
Hey M&I
I was just wondering, should I aim for around a 3.5 GPA as well for landing an ECM analyst position? or is it a little lower?
Thanks.
I don’t think it’s any different as recruiting is standardized at large banks with ECM divisions
Question on S&T
What does an equity sales assistant do? What are the exit opportunities?
Im going into an interview soon and want to be a “dead lock” for the job…cant afford to blow this one!
thanks in advance!!!
GREAT SITE
soo much valuable information on here..i appreciate it
Not 100% certain but I believe they just help equity salespeople reach institutional clients, potential investors, figure out how to pitch stocks, and so on.
Hi,
I’m taking an intern at BarCap in HK this summer, and last night I got a call from a VP saying that I will be most likely placed into his team ECM. What are my chances of transferring to other groups at the end of the intern? Is it common at all? Also, would it be a good idea to look for FT jobs at other banks?
Thanks very much!
It’s possible but you need to know people in other groups; you should definitely look into other banks as well just in case you can’t switch
Dear M&I
I was wondering when the full time recruitment cycle begins and ends for S&T in HK?
Thanks
It is the same as other regions, usually starting in August depending on your school and finishing by October
Is it common to have psychometric testings? I know that GS in HK doesnt do them
Um not to my knowledge.
So is it true that US and Asia recruitments do not use psychometric testing and just interviews?
Never heard of psychometric testing being used
Are bonuses for Equity Research Analysts and ECM very different?
Yes, equity research tends to be much less since they do not generate revenue.
Hey M&I,
I know this is an old post, but I’d really appreciate your advice on this one. I just started my summer intern. I’m working in the ECM, and while I like the people there I want to transfer to a group with more quantitative work. I’m thinking of either TMT (I know 2 associates there) or Levraged Finance. TMT is my optimal choice, but since I’m placed in the global markets team, will I even be considered for TMT if I get a full-time offer? I assumed Lev Finance would be much more realistic since it is part of global markets team. So shall I focus on Lev Finance instead of TMT?
Also, how should I maximize my chance of transferring? I currently try to talk to the people in both groups in a casual fashion, and will probably bring the matter up near the end of the intern. Do you think that’s right strategy?
I’m very confused right now, and I will really appreciate your help.
Yes it’s possible, I don’t think there’s much of a difference, the strategy sounds correct would just go for TMT
really appreciate your response. just talked to my friend at TMT and he agreed to assign me a project if the intern staffer agreed on this. hope this will work.
How are you placed in groups such as the convertible, syndication, etc.
http://www.mergersandinquisitions.com/investment-banking-summer-analyst-group-selection/
http://www.mergersandinquisitions.com/investment-banking-sell-day/
Hello M&I:
I have gone through the whole article and comments, it is really helpful for me to learn about what the ECM people are doing.
Now I have a question.I am going to have an interview in ECM with the group, what should I prepare? What is the difference of interview of Equity trading, research and structuring?
Thank you very much!!
ECM – know what the IPO market is about, research current IPOs that have been priced & delayed & pulled in your area, know why you want ECM and how you can add value.
ECM – help marketing & executing IPOs
Trading – helping clients/commission trade (buy sell at best price)
Research – equity research – banks giving view on what market/stocks are valued at
Hi M&I,
I have an ECM interview coming up in a BB, and wanted to ask what sort of technical questions should I most likely expect, and secondly – what is the best online source to find out about recent IPO, ECM and M&A deals?
Thank you ever so much for all this information. It is invaluable!
ECM – In my experience, I don’t think interviewers will go too in-depth into technical stuff like IBD usually but do have an understanding of comps like PE, EV/EBITDA and basic DCF analysis. They might ask some accounting questions too (financial statement analysis) though not sure if this is common. Do read up about recent IPO deals, their valuation, IPO discounts, investor sentiment (whether deals were oversubscribed/undersubscribed). Online publications – FinanceAsia, Dealbook http://dealbook.nytimes.com/2011/09/14/groupon-back-on-track-for-its-i-p-o/, WSJ, Bloomberg. If you want coaching on this front email me at coaching@mergersandinquisitions.com
Hi Nicole or Brian,
I just want to know whats your take of ECM/DCM and &A in Asia in the next 10 years? It seems that HK/China banks are mostly doing more capital raising than M&A.
In the ECM/DCM world, China is driving global IB revenues on that front because there are still quite a few companies that aren’t public yet, while many large and well-known US/European companies are already public. For instance, the recent Agricultural Bank of China IPO was the largest IPO in the world, even though ABC forced a 30% cut in IPO bank fees and withheld nearly $50m of the pool to pay “incentive” fees that it will allocate based upon how it thinks IBs have performed. This will likely be the upcoming trend given the increasing bargaining power of Chinese companies. http://www.ft.com/intl/cms/s/0/9e6bb830-90ff-11df-b297-00144feab49a,s01=1.html#axzz1eWZ8DXzE
In terms of deal volumes, China is also driving growth given the size of companies being listed on valuation terms. In terms of the M&A market, I’m not quite sure how it compares versus the IPO market but I do believe Chinese outbound M&A activities will still be rampant. Chinese companies undertake cross-border deals for many reasons i.e. access to resources, as evidenced by recent Sinopec’s Galp Deal. http://online.wsj.com/article/BT-CO-20111110-724459.html
Dear Nicole,
I just want to sincerely thank you for putting so much effort into answering my question and giving your wisdom!
I will definitely recommend everyone to read M&I!
About Me: Accounting student undergrad, completes in sept 2013, want to pursue a Masters program in 2014 to move into I-Bs, GCM preferred.
I have taken classes in derivatives,DCF NPVs & CAPM. Exam in summer. Will also be doing Bloomberg trading & analysis + F-modelling short programme in summer 2012. Have A grades from high school & in economics.
Would love to intern in GCM during summer 2014 before I start my Masters programme but don’t know what school to attend!
School 1: Respectable school in the UK that has a fair amount of students that go on to workin MS,GS,JPM, DB, Barcap & Credit Suisse. I’m planning on taking Finance & Econometrics. I like the asset pricing & modelling content & corporate finance content. Is this a good choice?
School 2: FT(Financial Times) ranked school with pure Finance content but tuition is currently £27500, don’t think I could afford it when I’m ready to start?
Lastly, which division in GCM is better ECM, Leveraged Finance or DCM when it comes to reasonable 12-14hrs max & also the highest paid in GCM?
Thanks very much
I can’t choose for you but seems like you like School 1
If you want reasonable hours, I wouldn’t work in GCM. As an analyst/associate, you’ll probably work around 12-16 hours, sometimes you might have to pull all nighters
So what do you think of my direction? Does it look favourable to land an internship in GCM as I don’t mind the 12-16hrs! I’m ridiculously motivated by the challenge, post taking my Finance classes & I see GCM to best fit!
I’m I on the right track?
Sure. I think you have a reasonable shot at landing an interview at GCM. Let us know how it goes!
12 hours days are considered lighter than a traditional IB job?
How are you supposed to live with 12+ hour days? i.e family, dating,chores, kids, etc.
Weekends, hiring a part-time maid…
Thanks for such a great site.
What are some of the recent developments in investment banking and what implications does this have for M&A or ECM or DCM or LevFin, as those are the divisions I am most interested in
Thanks
Check out – http://dealbook.nytimes.com/