Industry Groups vs. Product Groups: Got Exit Opps?

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Industry Groups vs. Product Groups“Yo, M&A is the best, right?”

“Why would you ever take an industry group over M&A or Leveraged Finance? Don’t you want to buy entire countries when you move into PE?”

“If you’re not modeling you’ll get bottom-tier bonus!”

Ah, yes: the industry group vs. product group debate.

Just like the debate over cardio vs. strength training, models vs. bottles, and boutiques vs. bulge brackets, there’s so much fervor on both sides that you’d almost think war was about to break out.

Actually, I lied: it’s not quite that heated, but let’s dive right into the debate and see what the arguments for both sides are.

Say What?

Product groups always work on a specific deal type, such as M&A or debt, across all different industries – examples include:

So if you’re in the M&A group, you’ll always work on acquisitions of other companies across all industries and you’ll build so many merger models that you may get Excel burned into your retina.

With industry groups, by contrast, you work within one industry but on many different types of deals – equity, debt, M&A, and so on. Examples include:

Pretty simple, right?

A False Dichotomy

Except that this division is wrong – or at least not 100% accurate. There are several sub-divisions of groups at a bank:

  1. Origination – These groups market and pitch for new clients, mostly for financings.
  2. Advisory – You advise companies on buying other companies. M&A. Gordon Gekko.
  3. Coverage – You do both origination and advisory work here, but you’re focused on a specific sector such as industrials.

When most people talk about “industry groups,” they’re referring to coverage groups.

So there’s more to it than the industry vs. product group distinction, and the notion that industry groups are 100% marketing and product groups are 100% execution is wrong.

This Thing of Ours

So what do you actually do in an industry group vs. a product group?

The main difference is that industry groups focus more on knowledge of the industry, what different companies are doing, and building operating models (3-statement models) for companies.

Product groups, by contrast, get to know specific transactional models – merger models or LBO models – really well, but won’t do much outside that and won’t learn an industry in as much depth.

There’s a lot of hype over product groups because most people assume that you can get into PE more easily if you start out in Leveraged Finance or M&A.

But that’s not necessarily true, and if your bank’s M&A group is lesser-known and doesn’t have much deal flow, you’re better off going to their top-ranked Natural Resources group instead.

Give Me Some Deals, Please

So let’s say you’re working on an M&A deal between 2 pharmaceutical companies – what would the M&A banker do, and what would the healthcare banker do?

  • Initial Pitch: The healthcare banker would do most of this, including coming up with the right sets of comps and the correct list of potential acquirers.
  • M&A Process: The work here would be split, but not necessarily based on who’s “better” at what – if the healthcare banker is busy, the M&A banker might take over and do more, and vice versa. Yes, the M&A analyst is more likely to get the modeling work all else being equal, but it’s not always so clear-cut.
  • Closing Dinner: If the budget allows for it, you both get to go bask in glory – just make sure you don’t try to “share” anything there…

Here’s an example of what the work split might be for a tech company IPO, between the technology industry banker and the ECM banker:

  • Initial Pitch: The tech industry banker will supply the comps and do the valuation, also creating the market overview slides; the ECM banker will create slides on how recent tech IPOs have been doing and add in the standard IPO process slides.
  • IPO Process – Valuation: The industry banker does most of this, with input from ECM on certain assumptions.
  • IPO Process – Due Diligence Calls: This is the tech banker.
  • Sales Force Memo: ECM does this since they interface with the salespeople.
  • S-1 (or equivalent IPO registration statement): Both groups are involved here.
  • Road Show: This is mostly the tech industry banker and his team – ECM is busy with many other deals and doesn’t have time to travel frequently.

Restructuring is a special case because of the specialized knowledge – industry bankers can’t contribute much there.

At most, the industry bankers may weigh in on the comps, valuation, and potential buyer ideas, but the restructuring/distressed M&A team would do everything else (analyzing bankruptcy scenarios, different capital structures, and running the process itself).

The same applies to Special Situations groups (which often include restructuring/distressed M&A) at banks – since the skills are so specific, you won’t share much work with the industry bankers.

Hours / Pay

At the analyst and associate levels there isn’t a big difference – the one exception is that you do work less (~12 hours per day) in some ECM groups, especially ones focused on IPOs rather than convertibles.

Otherwise it’s fairly close and deciding which group to join based on hours and pay is borderline insane – you’re in the wrong industry if you’re thinking about where you would get the best lifestyle.

Show Me the Exit Opps!!!!!!!

Ah, here we go: surely the exit opportunities in M&A or Leveraged Finance must trump those in those boring industry groups, right? And if you do ECM or DCM you have no options, right?

You hear this line of reasoning a lot, but no one has ever collected data on where analysts go afterward – so all these discussions are anecdotal at best.

In general, it’s harder to get into PE from a group like ECM because the skill sets don’t overlap and you won’t know enough about LBOs and more complex models to compete.

But the industry group vs. M&A vs. Leveraged Finance distinction isn’t so easy and some industry groups place just as many, if not more, analysts into PE (e.g. the infamous GS TMT).

If you’re hyper-concerned about getting into PE and you have multiple offers lined up, ask the people in those groups where analysts go – that is more accurate than anything you’ll read online, plus it gives you an excuse to work your sell days effectively.

If you want to break into corporate development you definitely have an advantage if you’re in a closely related industry group, and for venture capital it’s good to know something about tech (or healthcare) companies.

It’s hard to say which group is “best” for hedge funds because so much depends on the fund’s strategy – overall there’s less of a preference for specific groups than there is with private equity, the only exception being that ECM usually leads to an investor relations/ECM-type role at hedge funds.

Product Groups Going the Way of the Dinosaur?

Some believe that product groups – especially M&A – are redundant and that there’s no reason to keep them around since industry bankers can do everything that product bankers can.

There’s some truth to that if you’re talking about a broad, sell-side auction where there’s nothing unusual about the process – you’re simply showing the company to lots of potential buyers.

But it’s less true when you have a more unusual deal or something that requires specialized expertise (e.g. a cross-border divestiture), so M&A groups won’t be going extinct anytime soon.

And it’s even less true outside M&A: with ECM, DCM, Leveraged Finance, and Restructuring, it wouldn’t be practical to consolidate everything.

If you’re learning a client’s business in-depth, it’s hard to also spend 20 minutes here and there updating market slides, running a debt model for another deal, and so on – there’s a reason division of labor has been around since ancient times.

Business School Advantages?

Overall, the names and reputations of the banks you worked at make more of a difference than the group you were in.

Everyone in the admissions committee knows the difference between bulge bracket banks and 2-person boutiques, but not everyone understands the trade-offs between being an energy banker and an M&A banker.

So don’t gravitate toward M&A just because you think it will get you into HBS or INSEAD.

Lingering Questions

That’s quite a lot to take in, but I’m sure you have even more questions:

What About Interns?!!!

As an intern, the work you do in any of these groups is not much different and you shouldn’t spend too much time stressing about which one is “the best.”

Yes, once in a blue moon half the people in the M&A group will leave and you will get to run models as an intern, but don’t hold your breath waiting for that to happen.

Your group matters mainly because you might end up working there full-time – so if you think you would get bored in ECM, then yes, try for something else.

But if it’s a choice between ECM and not doing banking altogether, um, take the ECM offer.

Wait, So What Do MDs in Product Groups Do?

Great question. If Managing Directors are responsible for winning clients, what would an MD in a product group do on a daily basis? The coverage or industry group brings in the client, so why would you even need MDs in the M&A group?

Usually the product group MD does 1 of 2 things:

  1. He oversees the deal and is involved with negotiations and execution – much more so than an MD in an industry group would be.
  2. He still brings in clients and is not heavily involved with the deal even though technically he’s on the execution side.

Scenario #1 is more common when it’s a large and high-profile deal – a $50 billion merger, for example – or when it’s an unusual transaction that requires specialized knowledge.

For scenario #2, remember that Managing Directors still have tons of contacts in the industry even if they’re only “executing” deals – every time they pitch the company to a new buyer, that’s another name added to their Rolodex.

So the division between product and industry group responsibilities isn’t as straightforward as you might think.

Industry MD > Product MD?

But now you have another question: if, on average, product group MDs don’t bring in as many clients as industry group MDs, do they get paid less?

That makes sense in theory, but it’s impossible to say whether or not that’s actually true in practice because no one has the data.

Managing Directors at bulge bracket banks in developed markets might make a few million USD per year, and their pay is almost 100% correlated to their performance.

An industry group MD who only brings in 1 small deal could easily earn less than a product group MD who executes a dozen deals in 1 year.

Leveraged Finance vs. Debt Capital Markets (DCM) vs. Financial Sponsors vs. Financial Institutions Groups (FIG)

These 4 groups are commonly confused – possibly because 3 out of 4 of them have “Finance” or “Financial” in the titles.

Here’s how to think about the differences:

  • Leveraged Finance: Bankers here analyze companies’ capital structures, determine how much debt and what type of debt is appropriate, and do a lot of LBO modeling and credit statistic work. The focus is on high-yield bonds and leveraged loans. This is a product group.
  • Debt Capital Markets (DCM): This is also a product group, but it’s more markets-based and focuses on investment-grade debt rather than the riskier and higher-yield debt that you see in LevFin. The analytical and modeling work tends to be lighter.
  • Financial Sponsors: This is an industry group that develops relationships with private equity firms, pitches ideas to them, and works with their portfolio companies.
  • Financial Institutions Group (FIG): This is an industry group that works with financial institutions – commercial banks, insurance firms, investment banks, asset management firms, and so on – and does all types of deals, but exclusively with financial institutions.

Of these, FIG is the most different and you develop more specialized skills there – it can be hard to go from FIG to working with normal companies because valuing and modeling banks and insurance firms is like learning a different language.

There is a lot of overlap between LevFin, DCM, and Financial Sponsors, and at some banks they are effectively the same group.

Exiting into private equity is common from a LevFin (perfect skill set), but less common from Financial Sponsors (less modeling, but you know lots of PE firms) background, and also less common from DCM since you don’t do as much analysis there.

The hours and pay in these groups are not significantly different at the junior levels, so don’t decide which group to join based on that.

So, Which Group Should You Join?

It doesn’t matter nearly as much as you think it does. Yes, if you are 100% set on PE you probably don’t want to work in ECM – but other than that the differences in work/pay/exit opportunities are exaggerated.

If you’re really interested in a specific industry, go for that industry group – you may have a marginal advantage for certain exit opportunities in other groups, but you also need to maintain your sanity and stay alive for a few years, which are both much easier if you’re interested in the work.

Or you could just go for M&A and Leveraged Finance like everyone else – I won’t judge.

About the Author

is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys learning obscure Excel functions, editing resumes, obsessing over TV shows, and traveling so much that he's forced to add additional pages to his passport on a regular basis.

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116 Comments to “Industry Groups vs. Product Groups: Got Exit Opps?”

Comments

  1. Docks says

    Solid article, thanks for the read. Good to read more about Sponsors, that was something I’ve always been least informed on going through recruiting.

  2. Loansyndications says

    Great article, always useful to know the subtle differences between groups especially when interviewing. But I wanted to clarify something about role of the SYNDICATIONS GROUP within Investment Banking Division of BB’s.
    As an analyst we are primarily responsible for assisting with origination, structuring and execution of all the syndicated loan products. How does this fit into a typical Investment Banking Division in a Bulge Bracket firm.
    Would you say this is part of DCM ? What would the typical exit opportunities be for the above role ? Thanks !

    • says

      I’m actually not sure on that one but it sounds similar to DCM / sometimes it is officially a separate group. Exit opportunities would probably be DCM, Leveraged Finance, or maybe moving to a HF that specializes in those types of investments.

    • Loan banker says

      Bear in mind that loan origination and syndications aren’t actually things that your classic monoline investment banks enjoy doing. DCM and ECM are largely agency businesses (an ECM ‘underwrite’ tends to be an overnight / couple of days job) whilst loan guys take serious risk with the balance sheet. Underwriting major acquisition loan financing is capital intensive (think about the $45bn BHP bid etc.), and given the long lead time between commitment and syndication (often months) is risky – ie a market move will stick that chunk of capital to one borrower on the bank’s book possibly until maturity.

      Net net, what I’m saying is that the best places for loans aren’t necessarily the best IBs. JPM and Citi can just about play in both. GS and MS frickin hate loans. While at some of your bigger commercial banks, you’re a hero and compensated as such.

      DCM would be very much a sideways move – you’re far more likely to go coverage, or to a corporate itself, if you want to move.

  3. a says

    I always ask myself wheter financial sponsors is the best place to be when you are 100% focused on getting a PE job.

    • says

      Arguable, it probably helps more than something like ECM but it doesn’t always give you a huge advantage vs. M&A/LevFin/good industry groups.

  4. Karl says

    Great article, Brian.

    1) I’m in a weird situation: going into banking but want to trade. Any thoughts on which groups are best? I’ve heard there’s a lot of DCM–>bond-trading, maybe a group that helps hedge risk using certain products (FX, interest rates, etc.) Any ideas here would be great.

    2) I’m meeting with a few of those markets-based groups and am trying to get a leg up so I maximize my chance of getting into one of them. I’m doing background research so I’m knowledgeable/conveying interest but am worried there won’t be anything to talk about.

    Me: Hey, I really like your group
    Staffer: OK. Do you know what we do?
    Me: Only at a basic level.
    Staffer: Gotcha.

    Thanks for the help!

    • Adam says

      Karl,

      To answer you would take too long as a comment on this post, so Brian since you see both of our mails can you give Karl mine? I have a few comments that will give him a big leg up when talking to the markets groups.

      • says

        Feel free to leave a comment here – Karl’s email address is extremely personally identifiable so I would need to get his permission first before sending it over as everyone is concerned with privacy here.

    • says

      1) Probably ECM or DCM, those are the closest to the markets. Anything else is quite distant from trading.

      2) Just focus the questions on them and re-frame the conversation… you don’t need to know all the in’s and out’s of everything, if they ask a question like that just say, “At a high-level, you advise on debt offerings and help companies assess which capital structures best suit their needs” (e.g. for LevFin). And if they want more detail they can ask for it… but otherwise ask them the questions and make them personal/specific.

      • Adam says

        ECM/DCM will be better as they deal with valuation issues and market conditions for the paper. That said they are still quite distant from trading. ECM/DCM is certainly better than M&A etc for moving into trading but it’s not nearly enough. Hence, get in touch.

        • Italia89 says

          Hi,

          First year analyst in coverage here. Except I don’t cover an industry- I cover a country, and my bank gave up its M&A and ECM during my first month of work so I’m stuck with Lending, DCM and, yikes, Transaction Services.

          Ideally want to get in PE but would need a hand in understanding how to parlay my experience into that kind of job, even if it means switching banks altogether for an M&A / LevFin gig in the interim.

          Any help would be much appreciated.

          Thanks

          • M&I - Nicole says

            Yes you may want to move to a levfin/M&A role. Debt-related/financing experience may not be as useful as LBO modeling. You can then draw more attention to your M&A experience by elaborating on LBO modeling you did and perhaps write about potential IRR from that type of deal and/or anything you did to move the process along.

    • says

      No, most banks are divided into product groups and industry groups and you only work in one (GS does not do this exactly, maybe a few others as well).

  5. JBanker says

    If I’m applying to a group such as leveraged finance as an analyst, is it appropriate to mention my interest in PE and how that group would be best for me to get in or would it not be smart to mention exit opps during an interview?

    • says

      You can but you need to be careful in how you do it… don’t say you want to go into PE, just say you’re interested in it and in learning how it works, who the key players are, and how they acquire companies. But you don’t want to sound like you’re joining just to jump ship as soon as you can.

  6. FIGnewton says

    Can you join a “regular” financial institution after working in FIG(say in an upper management level, if not C-level)? Or are you stuck in FIG banking forever with no exit opps?

    • says

      What Adam said. Doing banking doesn’t prepare you to run a company – maybe you could do BD or corp dev at a financial institution but not general management.

  7. Mike says

    Thanks for a great article and a great website.

    I recognize that I may be way of base with this notion but please entertain me.

    Is there any validity to the idea that LevFin is superior to a group like M&A because in LevFin you are encouraged to give objective advice that potentially adds value.

    In other words, M&A is typically value destructive for a company but bankers are likely prone to push acquisitions regardless because of fees or whatever.

    Whereas with LevFin the service you are offering may be required for a PE acquisition or for a company to attain a superior capital structure.

    Also, how would the two compare if you knew you wanted to investment money for a career?

    Thanks so much.

    • says

      That’s an interesting point and way to look at it, but I don’t know that it’s really true. In LevFin you could make equally destructive choices, e.g. by recommending a debt structure that results in higher fees but more risk to the company. And it’s not as if all M&A bankers are set on destroying the world just to make money (despite what I write on this site).

      Either one works for investing, but LevFin is better if you want to do debt investing and M&A is better for investing across industries or doing merger arbitrage.

  8. Jim says

    I’ve occasionally seen people put on IB resumes that they financed XX% of their education through scholarships, part-time jobs, etc. What do you think of this?

    Is there a way I can indicate on my resume in a similar manner that I was first in my family to graduate college? I feel this could make my accomplishment smore impressive.

    • says

      I don’t think it makes a huge difference but I suppose it helps a little; I would just list that accomplishment as a bullet under Education.

  9. Moha says

    Dear M&I,

    Great article as usual! smart and full of interesting info to have in mind.
    But I wanna correct something. In ECM, at least in London bulge brackets, you work as much (90-100 hours…) as any M&A group within the bank. From my own experience, When it comes to corporate finance, I can tell that it depends more on the team/bank you’re joining that on the product your covering (ECM/M&A/LevFin).

    ++

    • says

      Thanks for that clarification. I have actually heard mixed reports on ECM in London, but as you said I think it does depend a lot on the team.

  10. charlie k says

    Great article.

    I interned in the London office of a BB but am working full time in the NY office. As such I have basically no connections there. As groups aren’t assigned until the end of training (I think you rank your preferences after exams) I’m not sure if there’s anything I can do to make an impression before then. Is it worth reaching out to groups I’m interested in now? What’s the best approach?

  11. tom says

    Hey, so I’ve posted here before, but this article is perfect for this question: I’m doing an internship at a new BB in DCM FIG and then a short rotation(2 weeks) rotation in LevFin, does it make sense to hope/expect the LevFin team to give me a full-time if I do well? I don’t want to stay in DCM FIG, since I think it’s too narrow (and a friend who worked there agrees) and want to leave my options open for PE. It’s such a short rotation in LevFin, so it seems as if even if I work myself to death they’d never extend an offer…

    • says

      They may, but if you spend most of your time in DCM you are more likely to get an offer there. So it really depends on how well you bond with the people in LevFin and you’ll have to go out of your way to get an FT offer there.

      • tom says

        how would I go about going out of my way with them apart from the obvious being ultra-interested, lots of face-time, having coffee with them whenever they ask? are there any things i need to think about especially?

  12. passer says

    great article. think i just want to add my 2cents on the LevFin and Financial Sponsors group. The actual responsibilities of these groups varies from bank to bank. While some levfin teams actually run the lbo model etc, and is involved more with the execution, some levfin teams do more pricing type work and the sponsors team will be the one running the model, executing the transaction throughout.

    • says

      Yup definitely agree with you there – I was actually going to add in something about that but thought it would just make things more confusing. The lines are definitely blurry with FSG/LevFin/DCM and as you said it depends on the team/deal and so on.

      • Nero says

        If possible, could you list the differences by BB in New York? It would be really helpful to not only know that there are differences but also know what those differences are.

        Thanks!

        • M&I - Nicole says

          Do you mean cultural differences? I’d suggest you to go to the banks’ websites & annual report because their websites provide you a lot of details!

  13. AC says

    Hey Brian, great post.
    Just a question maybe a bit out of topic. Is it really that hard to have a decent family life? I mean do you actually know of anyone that was able to withstand the workload of IB while having a family?

    • says

      Maybe at smaller banks you can do that, at bulge brackets most of the MDs are crazy / have dysfunctional or nonexistent personal lives

  14. Jimmy says

    The biggest/most high profile deal my group has done while I have been here was cancelled in my first month, so I hardly did more than update the team with news articles and random research, which doesn’t count for much. However I think it will be helpful to mention the brand name on my resume since it was announced we advised them and think I can talk about what happened proficiently. Should I still include it on the resume or is it a bad idea? I’m looking at lateraling after my first year so I’m trying to improve the resume.

  15. Jon says

    Brian,

    Thanks a lot for your article, it’s extremely informative. It’s interesting how the ‘war’ between the product groups and industry groups plays out. Just my 2c as well – While I do agree that teams like GS TMT routinely place analysts into some solid funds, the difference between the exit opps in a product group vs industry group is more defined in a lower-tier BB (think Deutsche, UBS, Citi). At the place that I work, the only kids with PE offers are from the LevFin group, analysts from industry groups haven’t even started recruiting yet. Makes me think twice about my decision to stick it out in an industry group..

  16. Frank ODern says

    I got into contact with a director at a mid-sized bank and he has asked for a phone interview on Friday; would it be rude to ask them to reschedule for a later day? Would that piss them off?

  17. diana says

    Hi Brian

    I started at a big 4 CPA firm and unfortunately moved to backoffice covering alternative asset management at a bulge bracket bank… I guess I’m feeling stuck and a bit lost on what my next steps could be. I did well in school, top 25, strong gpa etc.

    I guess my options are controller at a PE fund/hedge fund or investor relations at my current bank on the IB side. PE fund accounting has a lot of technical experience specific knowledge and although investor relations sounds a little more fun i’m wondering if the PE fund controller position would be better? I guess fund controller pays up to $200k or so. I’ve heard investor relations at PE fund or Hedge funds can lead to good pay and opportunities but IB investor relations I haven’t heard much about. Any insight on IB IR?

    Could you help me please decipher between the less worse option… or any better alternatives I should look into.. any insight appreciated..

    Best,
    Lost..

    • says

      Not really sure about IB IR as I don’t know much about it. I think HF/PE investor relations is a better bet so personally I would go for the controller position and then try to move into IR from there.

  18. AE says

    Could you detail the responsibilities of both product groups and coverage groups? such as screen comps through Capital IQ or build valuation models in product groups?

    • says

      As mentioned above, the responsibilities are overlapping and not as different as people usually say. The entire point of this article is that product vs. industry is a greatly exaggerated distinction to begin with.

      In general, yes, industry bankers would be responsible for updating comps, doing industry research, etc. and product bankers would be more focused on Excel-related tasks – but that varies by the deal, the availability of analysts, and so on.

  19. Robert says

    Could you give more insight into Real Estate? I know that the valuation metrics used are quite different from “traditional” companies. Other than that, I have heard little about what goes on in real estate groups (within investment banks). Also, it would be great if you can give insight into lifestyle, compensation, etc. (if there are any major differences between RE and other groups).

    Thanks in advance

      • Robert says

        Thanks, I actually just signed up for this course. About to start SA internship in the RE group at one of the cdn banks in toronto, and this course has been hugely helpful in prepping me

  20. Mike says

    I know you’re probably bored of hearing this, but this has to be one of the BEST posts on this site…thanks so much!!

  21. Anonymous says

    Hi Guys,

    First of all, I wouldn’t have some of the options I have in FT recruiting currently without the council of your blog. I am grateful. I was wondering if anyone had any insight on how to best prepare for a FIG interview. I have a second round with a FIG group at a BB soon and I was wondering what some of the best practices were in preparation. How much FIG specs will they expect you to know? I come from a Tech M&A background so I image very little is directly transferable. Thanks in advance.

    GG

    • M&I - Nicole says

      What questions did they focus on in the first round? I presumed you nailed the why FIG and why their bank question? I don’t think theyll go too in depth in terms of FIG specific questions but I believe you should have a sense of recent FIG activities/landscape as well as deals they have done/their pipeline. I’d imagine some of the quantitative/analytical skills and qualitative skills (focus on this one) are transferrable

      • Anonymous says

        Really no FIG technicals at all; mostly the typical valuation questions. With regards to why FIG, I really stressed that I wanted to learn more about the balance sheet and how I was fascinated as a business and political science student by the re-regulation etc etc. I found that the group I am interviewing with is “specialty finance.” It’s not the traditional bank/thrift/depository model. They cover all sorts of stuff from hedge funds to student loan companies. Any ideas?

        • M&I - Nicole says

          Spoke to a contact in FIG. He said specialty finance is a broad term. You need to be more specific re the details of your job spec & your bank etc. Given this environment, banks are interested in how FI obtain funding & preserve their capital FYI. Hope this helps!

  22. Ross says

    M&I,

    First off, really enjoy the site…I have been reading for a year or so now but this is my first comment.

    I’m currently in an MBA program, but my background is in a pretty niche field of healthcare (pharmacy benefit management), and while I did not specifically work on “deals” in the M&A sense, my work involved building financial models and developing proposals in support of our bids to win business against other PBMs over multiple rounds.

    I am targeting a few boutique banks specializing in healthcare for summer internships, and while I can draw on my experience of dealing with unpredictable deadlines, mistakes that can cost a lot of money, and insane clients, do banking recruiters at smaller firms place more value on this experiential (as opposed to technical) aspect than BB firms? Or am I toast either way without being able to crank out the types of models specific to banking? Just trying to decide how realistic my prospects are and how to spend my time.

    Appreciate any help.

    • M&I - Nicole says

      Thanks. Yes to your first question. No, I don’t think you’re toast it really depends on your interviewer(s) and what they’re looking for. You just need to spin your story right. You said you built financial models right? while your modeling experience may not be directly relevant you can still try to make a link. furthermore, you can also beef up on your financial modeling skills before your interviews & if they ask you questions on modeling you can impress them. Key is to land the interview. So pitch yourself right. Rest will follow

  23. Prospective Banker says

    Hi Brian,

    Thanks for another great article on the website! I’m a long-time reader but this is my first post. My question is how to find out which team is best in a particular bank. I am currently in the recruitment process with Credit Suisse (Singapore) and would be grateful for any tips on how to go about picking a team – or if you know which groups are particularly good!

    Many thanks!

    • M&I - Nicole says

      I’d say network w people in the Singapore office. Try to figure out which team’s culture fit you the most and which team you enjoy working for the most. Your boss and teammates will make/break your experience and perhaps future prospects

      • Prospective Banker says

        Thank you Nicole. I am actually based in the U.K. with no contacts in Singapore. I have an introductory dial in call coming up. How can I go about networking with those in Singapore? Or should I just wait it through the usual recruitment process (four phone interviews followed by a final round interview in New York City.)

        • M&I - Nicole says

          I’d suggest you to arrange some meetings either via cold calling or your contacts and fly down to Singapore. Waiting through the usual recruitment process is also an option

  24. Dre60 says

    Do you need to know business modeling/operating modeling to break in? i.e. Mckinsey 7s, Mckinsey Matrix, BCG Matrix, Product life cycle? Or ist this mainly for Management Consulting?

  25. Dre60 says

    How do you calculate the sustainable, optimal, and core growth rate for an industry, product, service or company?

  26. Product banalyst says

    To me, the quintessential coverage group is natural resources/oil & gas, just because (as your fantastic article on the subject describes) the modelling is so different–depletion, reserve probabilities, replacement rates, etc. are all beyond what you might do for a typical industrial or retail client. So much so that in a number of banks, M&A execution is almost entirely handled by the coverage team.

    Since that’s relatively unique, i was wondering if you were planning on posting an article on O&G, M&M, P&P, or natural resource banking groups in general.

  27. Jason Marder says

    Generally speaking, what are the relative sizes of M&A, Equity Cap Mkts, and Debt Cap Mkts in terms of employees? What are the relative ratios of employees within each?

  28. BB_Analyst says

    Hi Brian,

    Thanks for the great article.

    As an incoming analyst I would like to ask about IB Sell-day and later transition between banks.

    1. If I got the offer from a specific team in the BB, will I still have the chance to state my preferences at the end of training? Will it be perceived normally if the team was happy with my performance? I am talking about London placement.

    2. If I am focused on later change to PE, is it worth trying to change industry group to LevFin at the beginning or is it better to switch the bank to top3 later (to LevFin, M&A)?

    Thanks for the help!

    • M&I - Nicole says

      1. Yes you can still state your preferences, though you may not necessarily be able to get another offer from another team because it depends on the needs of the team. If the team extended you an offer and they liked you, your chances of securing another role at the same bank may be higher.
      2. There’s a lot of hype over product groups because most people assume that you can get into PE more easily if you start out in Leveraged Finance or M&A.
      But that’s not necessarily true, and if your bank’s M&A group is lesser-known and doesn’t have much deal flow, you’re better off going to their top-ranked Natural Resources group instead. So if your bank’s industry group isn’t well known, I don’t think it is that useful to switch to LevFin in the beginning. The industry group vs. M&A vs. Leveraged Finance distinction isn’t so easy and some industry groups place just as many, if not more, analysts into PE (e.g. the infamous GS TMT) so it depends which group you’re in.
      http://www.mergersandinquisitions.com/leveraged-finance/

      • BB_Analyst says

        Hi Nicole,

        Thanks for the answers.

        From Your perspective will it be easier to make this transition during the sell-day in my situation or it is better to work hard in my industry team and try to switch to another bank in a year or so?

        In my bank the headcount for Lev.Fin is quite limited so I though it makes sense to get as much modeling exposure as possible during the first year and then network into another bank.

        Thanks!

        • M&I - Nicole says

          It may be easier for you to switch in a year. However, if you really don’t like your group, I would take the risk and try to switch now. But if you like your group and can get along well with your team, I don’t see the urgency to do so unless your group’s business is really dwindling

          Sure, having deal exposure is probably key

  29. HarlemShake says

    Hi M&I,

    So I just started training at a BB LevFin Group with focus on Energy clients. After talking to a few second analysts, my worst nightmare is confirmed….ALL MODELING WILL BE DEFERRED TO THE COVERAGE TEAM.

    So how can I move into a more model oriented group within the bank? when can I bring it up (after the first year?) or should I leave and work for a competitor?

    Thanks!

    • M&I - Nicole says

      You can bring it up after a few months at your team. What you can do is to get an offer from a competitor and use that as your leverage.

  30. RDK says

    Hi M&I,
    I am a Portfolio Associate within a Fudicary Asset Management group at a Financial Services firm. Which product or industry group would be a best fit post MBA for my asset management skills? I assume FSG would be the most compatible because they work in tandem with PE/HF’s firms. Please advise.

  31. Yifei Yang says

    Hi Nicole,

    Can I ask if I’ve been asked why choose DCM over ECM, what should I say? Maybe DCM is more technical, has more complex products and thus require more in-depth knowledge?
    What about DCM not LevFin?

    Thanks!

  32. Rohan says

    Kinda weird that i didnt go through this ages ago but finally ive got the difference

    So industry group is more about the sector in which the deals are done and product groups are simply the bouquet of services offered by the bank.

    If one wants to learn more about the industry and how the factors shape it , its obvious that industry groups will be more preferred

  33. Tony says

    Hi,

    I have an upcoming interview for a healthcare IB position. My backgrounds in Economics and my spin is that I originally wanted to pursue an economic consulting role after I graduated, but through my internships became more interested in the finance/business side. Now I want to take my finance experiences and pursue my career in the healthcare sector. (previous IB internship in college) I didn’t have much exposure to healthcare through my internship it was more of a generalist role. As a spin could I say that I met other healthcare bankers through my internship which sparked my interest in the industry. Or if I’m not knowledgeable on the industry am I better off saying that I took some bio courses in college which I found really interesting? I’m honestly just more focused about breaking into IB to begin with but this position happens to be for a healthcare group. Thanks!

    • says

      I would just say at the end you’re especially interested in healthcare because of the courses you took, plus several of the bankers you met through the internship

  34. Ambitious Rookie says

    I have a coverage interview coming up. How technical do the questions get since it apparently has slightly less technical input than the product teams?

    They havent specified which industry group it is but the interview is with the head of the division so its hard to feel out if it will be more fit inclined or otherwise.

    Should l expect “walk me through a DCF”? LOL!

  35. darie says

    Hi M&I,

    Do you have any insights about regional coverage? There are banks with product & industry coverage, and, along that, they also have country teams.

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