The Buy-Side vs. The Sell-Side: The Worst Way to Categorize Finance Firms?

58 Comments | Investment Banking - Types of Banks

The Buy-Side vs. The Sell-Side“Yo, you’ll make bank when you move to the buy-side! Screw this stupid investment banking job.”

“Yeah, I heard everyone at hedge funds makes at least $1 million and gets a castle as their signing bonus.”

“So when’s your interview?”

Ah, yes: that classic debate about the buy-side vs. the sell-side. Although the conversation above is fictional, similar exchanges are taking place in cubicles across the world as you read this.

You hear about the buy-side vs. sell-side distinction everywhere, whether you search online, browse through you message boards, or even (gasp) talk to people in real life.

The only problem is that “buy-side vs. sell-side” is the worst way to categorize financial services firms.

From Cold Call to Closed Deal: How a Private Equity Investment Comes Together, Part 3 – The Dotted Line

51 Comments | Private Equity & The Buy-Side - Day in the Life & Week in the Life Accounts

How a Private Equity Investment Happens“She thinks $60 million is a discounted price? Can someone shoot her with an animal tranquilizer gun until she snaps out of it?” John says, looking around in disbelief at all the other Partners.

David turns to you and his eyes light up as a new idea percolates to the top of his head, and then sputters out of his mouth.

“You do know about the special analyst bonus, right?”

Everyone else in the room laughs, as you contemplate whether or not they really want you to tranquilize the CEO.

$60 million would be 6x EBITDA – a reasonable price for a larger company – but significantly higher than what you’d pay for a small, Founder-dominated business in a niche market.

David speaks up once again as the laughter subsides.

“And let’s not forget about her other demands: she wants to roll over 20% of her ownership and put aside 5% in an options pool for the management team.”

“So we’re paying for an overpriced business and then giving up 25% for no apparent reason. This sounds like a better investment than finding Google in 1998,” John replies while rolling his eyes.

Everyone else sits there in silence as you weigh your options before speaking up.

“Well,” you say, “On a positive note, I think I could call in a few chips to get the financing in place.”

“What bank would even look at this? It’s too small for any of the usual suspects,” David points out.

“Right now everyone’s desperate for business – in normal times they’d say no, but beggars can’t be choosers.”

Debt Capital Markets 101: How You Break In, What You Do, and What You Do Next

91 Comments | Investment Banking - Product Groups

Debt Capital MarketsThis one has been a long time coming, but it’s finally here: the debt capital markets article you’ve been waiting for since this site began.

In this interview with a reader who works in DCM in Canada, you’ll learn:

  • How recruiting differs in DCM.
  • What an average day in a DCM group is like.
  • How DCM is different from Leveraged Finance, and pros and cons for each one.
  • Differences between DCM groups in the US vs. Canada.
  • The culture, pay, hours, and exit opps in DCM.

This one’s a monster and might just be the most in-depth interview ever featured here, so let’s get started.