Lateraling To Another Investment Bank? Look Before You Leap

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“I’m in the Credit Suisse Tech M&A Group currently but I heard that Goldman TMT is way better and that everyone who works there aces their private equity interviews and gets offers at KKR and Blackstone. How can I transition over to a much better group/bank?”

Every week I get questions like the one above. And my reply is usually the same: don’t bother. In most cases, lateraling is a waste of time and effort. But around the end of their first years in finance, young investment banking analysts everywhere think about making the move.

Bulge Bracket to Bulge Bracket

It doesn’t make a difference whether you’re at Morgan Stanley or JPMorgan; you’ll have access to the same set of recruiters at any bulge bracket.

You could argue that some groups/offices are “better” (like the former UBS LA) and that it’s therefore better to work for the more “prestigious” offices, but it’s still a lot of effort for a marginal gain if you’re going from large bank to large bank.

Reasons to Make the Move

If you can’t stand your investment banking group and want nothing more than to end your misery in a violent way every morning when you wake up, then you might have an actual good reason to make a lateral move to another bank.

Even in this scenario, though, you should confirm there’s nothing you can do to improve your situation – like switching teams or groups – before you decide to swing through the jungle of finance to another bank.

Another reason might be if your bank is collapsing, or your group is collapsing and everyone else is switching banks anyway; in that case you don’t really have any choice.

Issues To Consider First

If you make a lateral move you’ll have to start over at another bank, both literally and figuratively.

Depending on the banks involved, you may be forced to start over as a 1st year Analyst. This “demotion” is more common going from a smaller bank to a larger bank, but the real issue is not the demotion – it’s the loss of time in the recruiting process.

Since private equity firms and hedge funds conduct interviews a year in advance of start dates, you will have to stay in banking for 3 years rather than 2 if you switch to another bank. If you’re a masochist you might want this or you might be fine with it, but most people making the switch don’t realize this and are horrified when it hits them.

In addition to the harm done in terms of recruiting, you’ll also have to build “mind share” with senior bankers once again and prove yourself capable so that you work on deals rather than pitchbooks.

Boutique Or Middle Market To Bulge Bracket

This is the only lateral move that makes sense. While you can get good experience at a smaller bank, you will have better access to recruiters and exit opportunities at bulge brackets.

So if you ended up at a boutique or middle market firm due to economic conditions, because you came into the recruiting process late, or because you made a career change long after graduation, going to a bulge bracket may be a good move.

Just make sure you really want to stay in finance for the long-term. Otherwise, it’s a waste of time and effort because having Goldman Sachs on your resume vs. Piper Jaffray isn’t going to do much for you if you move back home to help out with the family business.

But You Should Still Think Twice

Even if you’re 100% convinced that you should move to another investment bank, I would still urge you to think twice before you do it. Make sure all of the following are true before jumping over to the other side:

  • You are willing to be an investment banking analyst for 3 years rather than the standard 2.
  • You are 100% certain you want to stay in finance for at least another 10 years.
  • If you have a team conflict or can’t stand your current group, there’s nothing that can be done to remedy that at your current bank.

Be Wary Of Headhunters

Recruiters are always looking to make lateral moves happen because they get a commission if they get you to move somewhere else.

So if they’ve told you that the other group you’re considering moving to has Aeron chairs made of gold, exit opportunities beyond your wildest expectations, and yes, even a daily allowance for models and bottles, you should be careful:

You’re probably being sold.

Sure, if you’re interested in moving anyway and you have some good recruiter contacts who can make it happen, go ahead and use them. But if they’re pitching you on moving from Goldman to Morgan or on moving from Gleacher to Revolution Partners, there’s probably something you don’t know.

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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58 Comments to “Lateraling To Another Investment Bank? Look Before You Leap”

Comments

    • says

      Ikemen: very interesting list. I’ve seen variations of it before. I’m not into ranking banks/people too much, but it’s interesting to see just how much all these guys make.

  1. A. says

    You mention here what one should consider before making the move, but you don’t mention how to go about doing it. BB to BB — headhunters or networking? Do banks have recruiters who only deal with laterals at the analyst/associate level? If so, how do you find them and submit your resume? Would you mind explaining how this is actually done and how it can be done without being “caught” by the group you currently work for?

    • says

      You can really do either – I would only go through a headhunter if you don’t know anyone at the bank you’re moving to. Most of my friends who have lateraled have done it via networking since they knew people wherever they were moving.

      There are no lateral-specific recruiters at banks – recruiters handle everyone, whether new hire out of college or lateral from elsewhere. They don’t openly advertise their contact information, so best to go through a friend or headhunter.

      In terms of not being “caught,” there’s always a risk, but the best advice I can give is to avoid telling anyone at your current bank what you’re doing. No matter how much you think you trust them, don’t say anything because it WILL get out. If no one at your current bank knows, there’s not much risk.

  2. EMBanker says

    To avoid being “caught” and regarding the confidentality issue, should one apply with the presently employer firm name blanked / crossed out?

    How should one apply? …The normal way, with the present employer firm name shown?

    • says

      You have to leave in your current name or no one will take you seriously – just make sure the distribution is not too wide.

  3. humble_dude says

    M&I, isn’t it logical to make the lateral move to a better group at a better bank, even though they are all BBs, so that one can get a much better chance to land a pre-MBA PE job? Or are you saying that one will have equal chances for the exit ops working at any BB groups?

    • says

      I’m saying that:

      1) It makes a marginal difference at best what your pre-MBA PE job was. Business schools put everyone from finance in the same category.

      2) Your chances from different BB groups are not significantly different – not enough to actually make the jump in 90% of cases (exceptions may apply depending on how bad your current group is).

    • says

      There’s not much to it… you decide on a start date, and then leave your bank and move to another one. Sometimes they give you a week or two of vacation in between.

  4. V says

    Would it be worthwhile then to lateral from a decent MM place to a BB solely for the improved exit options? Especially if you like your team at your current firm and are happy there? Reading this article it seems your answer would be no but I want to get a good buy side job eventually and it seems that all the good HFs and PE funds seem to only recruit from BBs. Any thoughts would be welcome.

    Cheers.

    • says

      If you want to move to a top PE/HF then yes it’s worth it. If you value your work environment, co-workers, and maintaining your sanity over brand-name, though, probably not.

  5. SB says

    Similar question.

    I work at a very top mm shop in m&a. I am not interested in working at a mega fund. I would like to work at a mm pe fund pre-mba. I am not very interested in hedge funds (at least not yet). I actually use to be very interested in strategy consulting but I felt like banking would be a better quantitative base. So far, thus is true, though I would like to be more strategy components of a deal. Someday I would like to have a balance between money, life, family.

    Could you advise me on my options? Stay or lateral to BB?, Stay and recruit for mm pe? (is that even possible, or would lower BB take all the spots?) ….. be a ski bum?

    • says

      I would say just go for the MM PE shops right now… no reason to move to a large bank unless you want to go to a mega-fund. You can easily get access to recruiters via friends, contact them yourself, etc. and if they are impressed they can help.

  6. curious says

    Hi, you said you can move via friends at other banks. I know people at all banks and all of them are happy to make it work but simply sending CV to the HR doesn’t seem to work, any views on how to make it work?

  7. French student says

    My question is not directly related to the current topic, but I can’t find a less inappropriate one.

    I’m currently preparing a Master in Finance in France but I expect, for personal reasons, to work abroad in a few years. Even if my university is among the best in France, its reputation is – except in French speaking countries and some banks in London – near 0 elsewhere.

    My question is : should I aim to start in a French IB like BNP Paribas in order to “sell the French culture” during transition-interviews, or, start in a bulge bracket IB in order to take a first step towards what will most likely be my employer once I will move from Paris?

    (if it can direct your answer, know that in 2009 JP was #1 in France for M&A, GS #2, and the French BNP #3)

    • says

      I would go for a bulge bracket since they tend to have more of a global presence; BNP is well-known but banks like JPM, GS, and so on have more of a presence in most countries.

  8. Greg says

    I’m currently interning at a boutique until the end of December but feel like I would like being at another bank a lot more. My bank is super small and kind of a dump. I graduated in May and this 3 month internship I’m doing right now is my only investment banking experience. Do you think I will be able to shift to another firm in January or should I stick it out here?

    I’m from a state university but graduated at the top of my class.

    • says

      You might be able to move to a better-known MM or boutique bank since having any kind of experience will help you. But you will have to be quite aggressive since other people have full-time (not internship) experience.

  9. Ghalib says

    How about lateral moves internationally? Preferably moving to a country where the average salaries would be larger. As an example, we could say being an analyst at a Boutique in Canada, would it be realistic to make a move to MM or even BB in the US?

    • says

      The US is difficult due to visa issues. For other countries you need to have some type of network there and/or go visit in-person first to establish relationships… otherwise it’s almost impossible if no one knows you.

  10. Conaw says

    Any issues with trying to lateral 6 months into your first year? I’ve learned a good bit at my current firm and like the people/culture but am very worried about exit ops, particularly because recruiting is done privately at my bank (so MDs and VPs may not actively push my name out) and I have yet to close a deal (thus making it very difficult to compete with BB analysts with 2-3 huge deals on their resume).

    Would you advise against this? Should I just stick it out for at least a year before pursuing other options? If opportunities exist, I’d gladly take them – just worried that this might come off as a commitment issue.

    Thanks.

  11. 1st year Cityboy says

    Hi Brian,

    Firstly, thank you for all the effort you put into this website – it really help us a lot!

    Secondly, I am starting as a 1st year IBD analyst with a big international bank (yet not BB, think BNP, HSBC, etc.) in London. I come from Central and Eastern Europe region, so for me it is a big leap in my career. Apart from the fact, as I have now heard, that they pay much less than BB, is there that huge difference in exit opportunity/ prestige that I should consider moving to a BB after my first year? I consider myself quite ambitious and I am not sure if my bank is the right place for me.

    Thank you!

    • M&I - Nicole says

      Yes there is a difference in terms of exit opportunities/prestige. However, make the most out of what you have, and try to network as much as you can to land a job in a BB

  12. JerseyAnalyst says

    Hi,

    I’m in a very interesting situation. I am about 2 months into my boutique ib analyst job; it’s a no-name boutique. I am going to be in Finance for the rest of my life so I took this position knowing that I will only be getting a stipend as a salary and a bonus for every deal that gets closed that I work on. My motivation and determination is being killed. I am continually networking but I wanted to know how long should I wait until I aggressively try and lateral to a prestigious boutique or BB?

    Thanks for the help.

  13. J says

    Hey Brian,

    I graduated in may and started as an ibd analyst in nyc at an international, non-BB firm (macquarie, rbs, bnp, etc). I ultimately want to move to pe.

    After training, I was placed in a capital markets group (dcm/ecm). It def wasn’t one of my top choices, but I ended up there b/c a fellow alumni put me as their top choice.

    I originally planned to stick it out a year and learn as much as poss, but I am disappointed to not be learning any financial modeling or other relevant skills.

    Would you recommend I stay a full year? Or try to network to another firm/group?

    Thanks in advance.

    J

    • M&I - Nicole says

      Network as much as you can internally & externally in the meantime – you never know. If an opportunity comes up, move. If not, stay.

  14. W says

    Hi,

    Is a $40,000 base from a no-name boutique in a major city (think NY) ridiculously low? I know the economy is going downhill nowadays. Should I go in for the experience and try to lateral after a few months?

    • M&I - Nicole says

      Yes very low. However, if you have no experience and this is the only way for you to break into finance, take it

      • W says

        Will this low salary count against me for my next job since recruiters always ask for current salary? I am worried that potential employers might see that I am only worth $40k and refuse to offer me market rate (gasp!)…

        • says

          It may, but it beats the other option of not having an offer at all. And you can always fudge your salary #’s, not get specific, etc… no reason to ever give a salary even if they ask for it, actually.

  15. W says

    Hi,

    I am the same person as above. If I decide to lateral after 6 months to 1 year and is asked why I want to change jobs, ia it preferable to say:
    1. I want to experience more complex deals/a wider range of deals etc. types of standard answers. OR
    2. I feel I am underpaid for the work I do.
    Or both?

    Also, in general, when you lateral, how many references do they ask for, since you can’t give them a reference from the firm you are still working at?

  16. James Richards says

    I am currently a senior and have an offer from UBS and from a MM bank.

    I like UBS but given all the negative publicity about them, including their recent layoff of analysts, I am curious if it is still considered a legitimate position in the world of IB especially if I am looking to go into PE.

    If accepted, is it worthwhile for me to lateral to a different BB or is it not worth the effort?

    Thanks.

    • M&I - Nicole says

      You may want to raise more questions to the two teams and figure out what you’ll be doing there, what the team’s growth plans are etc – try to ask more information and see which team you think fits you better (this you should rely on your intuition)

      Yes, it is still legit.

      I think you should still network with other banks and check out other opportunities. Hard to say if its worthwhile or not – You haven’t even started the job yet!

  17. Marcel says

    I assume the same principle applies in London (correct me if I’m wrong?)

    Having said that, would I be right in assuming that it is also possible to move to another bank by doing an MBA after your years as an analyst and *then* moving to another bank?

  18. a student says

    Hi,

    I am just curious if you can list me the top 10 investment banking groups to work for in the US.

    Thank you very much.

  19. Al says

    I have an interview for Investor Relations at a Hedge Fund in NYC. What are the exit ops for this? Could I get into a top 10 MBA program with this on my resume?

    • M&I - Nicole says

      Exit Opportunities: If you have access to investors, you can always join another HF, or be involved in a fundraising role. This experience will be helpful if you want to break into a top MBA program, though I can’t say that you’ll be able to get into a top 10 MBA program with this alone on your resume. Your GMAT, essays etc are useful too

  20. James says

    Hi,

    I worked at a boutique M&A advisor in Europe for about 2 years and am now interviewing at banks in Asia. One of the concerns the sector teams I met was that I did not have much experience in equity / debt advisory as I worked at a pure M&A advisor. How could I position myself to be an attractive candidate in this case?

    Thanks,

    James

  21. James says

    Yes. Since the sector teams do equity and debt capital offerings, and syndicated loans etc., if they express concern about my lack of experience in those areas, what is the best way for me to answer such a question during interview?

  22. James says

    To clarify, I meant sector teams such as TMT offering M&A, equity and debt capital offerings, syndicated loans and structured products.

  23. Martin says

    What would be some good reasons for moving from a MM local shop to a BB shop that I could use during interviews without insinuating that I plan on exiting after the 2 year stint?

    • M&I - Nicole says

      You are interested in working at a more established firm doing “bigger” transactions; you like the culture at the BB after speaking with XXYY at the firm…

  24. James says

    Hi M&A, thanks for the post. What is your perspective on incoming full time analysts who would like to end up in a traditional coverage group (think TMT, Consumer etc) but have instead been placed in a non-traditional IBD group during sell days, (ie PFG) at a BB. The stuff one learns in these groups appears to be very different and so are the exit opps. Would you say this would be an instance where one should seek to lateral/switch groups if one is looking for traditional exits such as PE/Corporate/Hedge Funds?

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