by Brian DeChesare Comments (61)

Structured Finance: Debt Raising Made Easy, or Financial Weapon of Mass Destruction?

iStock 501597050

Last time around, there was some controversy over whether or not Structured Finance was evil.

“Evil,” of course, meaning that it caused the financial crisis.

This time around, our interviewee addresses that question and responds to even more of my passive-aggressive interviewing techniques – plus a whole lot more.

Here’s what you’ll learn in part 2 of our series on Structured Finance (Part 1 – Recruiting if you missed it):

  • What an average day in the life of a Structured Finance analyst is like.
  • How modeling is different in Structured Finance (bottling remains much the same).
  • How much you get paid and what exit opportunities you get.
  • Why you shouldn’t blame Structured Finance groups for the financial crisis… or at least, not everyone in Structured Finance.

A Day in the Life: Structure vs. Chaos

Q: Structured Finance sounds much closer to a DCM or LevFin group in banking than a trading desk – what about an average day in your life, though? Are you working market hours or banker hours?

A: It’s a mix of both. Sometimes I get in early – around 7 AM or earlier – for market update calls (i.e. if we need to hear where spreads are from the relevant trading desk).

But deals can take months to move from start to finish, so in that sense it’s similar to investment banking. And it’s not unusual to leave at midnight or 1 AM, so it’s different from trading.

Unlike investment banking, though, no one assumes that you’ll always be there on weekends – if you’re busy with a live deal and something needs to get done you may come in, but other than that there’s little-to-no “face-time.”

Most of the senior bankers here are married and have kids, so they have no interest in sitting around and seeing how long you’re at the office – they want to do their work and go home.

If there’s nothing to do at night, I’ll usually leave around 9 PM – if I’m busy with a deal or a pitch, that may extend until somewhere between 9 PM and midnight, or maybe a bit later than that.

Q: So it’s between standard hours in M&A / product groups and what you see in trading or capital markets groups.

What about the work itself? What do pitches and deals involve?

A: It’s a mix of the type of work you see on any other deal or pitch, and then a few points that are specific to Structured Finance.

Pitch work involves creating:

  • Market update slides showing the spread, tenor, and ratings of bonds.
  • Deal comps that show the rates competitors are pitching.
  • League tables showing how all other banks “rank” in the market, often cut in “creative” ways.
  • Loan performance tracking – this is specific to Structured Finance. We show how the collateral underlying structured notes is performing – defaults, overall credit quality, and so on.

Pitch books themselves are very similar to what you see in standard pitch books anywhere.

As far as deal work, it’s a lot of the usual administrative grunt work you’ve written about before – creating Working Group Lists, deal timetables, working with lawyers, rating agency teams, and so on.

Our main technical function on deals is structuring – we come up with the credit enhancements, figure out the “buffer” that investors should have, and then create marketing materials for the sales people to present to investors on the roadshow.

For Structured Finance, sometimes we just post the presentation online and people look at it over the Internet as well.

Once the roadshow is over, we’ll go to the syndicate and spend 2-3 days with them marketing the deal from launch all the way through pricing.

It’s extremely important to monitor the markets – if we’re doing an auto loan deal and 3 other auto loan deals are launching in the next few days, we might hold off on launching ours so that investors don’t get distracted.

Q: That makes sense. Speaking of the structuring work you do on deals, what exactly does it involve?

Are we talking standard modeling work with the 3 statements, or do you see radically different methods?

A: Sure. There are 2 types of modeling work in Structured Finance: more IB-esque modeling and then really heavy, quantitative, Monte Carlo-style Ph.D. modeling that “structurers” here do.

Similar to actuaries at insurance companies, these structurers work with probabilities all day and figure out how likely it is that borrowers will default on mortgages, auto loans, and so on.

The goal of any model in SF is to calculate the amount of cash flow available to pay interest and principal. Bankers work with the company to understand revenues and expenses so that they can understand and calculate cash flows.

We wouldn’t necessarily create a detailed 3-statement model for that, but we would need to model the cash flows and show what those would look like in the future.

Then we hand that work over to the structurers, who model out the payment waterfall of the notes for a given structure, and get their input on how risky they think the security is under different stress scenarios.

I’d be surprised if, during an interview, someone asked you what happens to the 3 statements when depreciation goes up by $10; you’re more likely to get questions on how to calculate cash flow given revenues and expenses.

Q: It sounds like the structurers do all the heavy lifting – do they also get paid more?

A: Nope. A few people have moved over from the banking side to the structuring side before, but most people prefer to stay in banking because you get paid more despite the easier technical work.

You earn more here because you’re responsible for bringing in clients and winning deals – and as with almost any other sell-side role, sales roles pay more than execution roles.

Culture, Hierarchy, Hours, Pay, Exit Opps, and Financial Crises

Q: That’s actually not too surprising, because you also see the same thing in areas like trading and hedge funds where the one bringing in returns or profits makes the most.

On that note, can you tell us about the pay in Structured Finance?

A: There’s minimal to no difference in pay at the junior levels: expect what you would get in any other investment banking group.

Our revenues are smaller since it’s a niche area, but we also have a much smaller group.

At the senior levels, MDs in the M&A group probably see bigger paydays than the MDs here because they can advise on much bigger deals and collect higher fees.

The fees for Structured Finance deals, just like M&A and capital markets deals, are based on the deal size and how risky and difficult it is to get the deal done.

We earn less on student / auto / credit card deals because they’re traditional and less risky – if we charged even a 0.05% higher fee, the client would instantly go to competitors.

For less conventional deals that require more custom work from us – solar power or alarm system securitization, for example – we might charge 1% or more in extra fees.

That sounds like a small amount, but it adds up to millions to tens of millions in extra fee revenue on deals worth hundreds of millions or billions of dollars.

Q: Right, interesting to hear how the fee percentage differs depending on the deal type.

You mentioned that the Structured Finance team is usually smaller than the other product and industry groups at a bank – what about the culture and hierarchy?

A: Our group is very flat, and the analysts go out to lunch with Directors on a daily basis. We toss around Nerf footballs after dinner. I help one guy set his fantasy football league every Thursday.

However, they also won’t hesitate to hand me a boatload of work at 7PM on Friday that’s due on Monday, so it’s a balance.

Q: What about those glamorous exit opportunities? I’m assuming that Structured Finance is not the place to be if you want to move into PE.

A: You have an extremely low chance of getting into private equity from here unless you’re in a unique situation – for example, you worked in M&A or Leveraged Finance before this, or you have other deal-related experience.

Most likely, you’ll stay in Structured Finance and move up the ranks.

Another possibility is moving to a normal company in a financing role and helping them issue securitized products to raise funds.

You could also go to an insurance company or an asset manager like Vanguard that invests in structured notes.

Q: What about hedge funds?

A: There are actually quite a few hedge funds that make investments in structured notes, so that’s another possibility.

Just don’t expect to get into a global macro fund or traditional long / short equity fund, because the strategies and securities traded there are completely different.

In addition to working at established hedge funds, some people also leave Structured Finance groups, go out to investors and raise $500 million on their own, and then find a company with relatively high CapEx that needs to raise capital.

Then they’ll act as the sole investor to that company and invest their funds directly, in exchange for a custom structured note related to the company’s pool of underlying assets.

These securities are ultra-high-yielding and you can potentially earn much higher returns than with traditional debt – assuming the company doesn’t go bankrupt, of course.

Or, you might just work with the company in question to issue the structured note and raise funds from 50+ different investors, acting as the company’s “mini-investment bank.”

So there are lots of possibilities on the hedge fund / investing side – just not with the traditional HF strategies, and certainly not in PE since you don’t buy and sell entire companies.

Q: That makes a lot of sense – so even if you’re interested in hedge funds, Structured Finance might be a good fit for you if you want to continue working with structured products.

Now I’m going to move into “bad cop” mode and ask you a more pointed question: many people blame securitization for the financial crisis and all the ensuing housing troubles.

How would you respond to this?

A: I would respond to that with 3 points:

(1) Blame: First, yes, the securitization of sub-prime mortgages was the vehicle created by Wall Street that drove the economy off a cliff and into the financial abyss.

However, if you’re going to sit here and blame the world’s ills solely on Wall Street bankers then I’m going to have to nail you with some pepper spray…

What about the people with no job and no income who bought a house for $500,000 with no down payment and a loan with an adjustable rate? Where’s their sense of responsibility? What about the rating agencies who got paid to rate these deals but didn’t even know how they really worked?

What about the shareholders of banks who would have penalized their CEOs and BODs for the profits that would have been lost by sitting on the sidelines? What about Congress who created the incentives for all this in the first place by mandating that loans be made to subprime borrowers?

There is surely enough blame to go around.

(2) Derivatives upon Derivatives: In addition to the securitized assets themselves, we also had CDOs being written on top of these bonds where a single default would have disastrous, exponential consequences throughout the financial system. The failure of one bond would have the effect of ten bonds failing.

(3) Complexity: And finally, almost no one had any clue what was going on with the complexity of these securities, and risk management at financial institutions and credit agencies fell apart.

So yes, structured products played a role in the financial crisis, but it’s incorrect to blame them 100% for what happened.

Today, people are much more conservative and you rarely see sub-prime loans being underwritten because everyone remembers what happened.

You don’t see derivatives upon derivatives upon derivatives anymore – so the industry is fundamentally different now. And the volume of securitized issuances has been cut in half compared to what it was at the peak, just before the financial crisis.

Q: OK, thanks for addressing that – I know a lot of readers are curious to hear your views.

Based on everything we’ve discussed so far, who do you think would fit in best with a Structured Finance group?

A: Well, I’ll start by explaining who would not fit in well with a Structured Finance group: stay away if you’re hyper-focused on the traditional Ivy League -> IB -> PE/HF -> Greatness path because SF is clearly a different path altogether.

The upside is that you could get promoted faster than your IBD peers because you won’t need an MBA.

If you’re genuinely curious about different companies and how they make money and you’re creative, you’d fit in well here.

There’s more creativity required than in M&A because you have to think about how to structure securities and how to provide buffers that appeal to investors – and you have to balance that with the company’s concerns as well.

You need to be outgoing and good at networking and sales as you move up – we pitch a lot of unconventional ideas to companies, so you have to be comfortable doing that.

Finally, if you’re a prestige whore, stay away because Structured Finance is not as “sexy” as M&A and you won’t be working on deals that make the front page of The Wall Street Journal – you need to be interested in the markets and actually like the work to do well here.

Q: Thanks for pointing that out – I think you could say the same about many other areas in finance, since you’re rarely working on anything “prestigious,” even at large banks.

What about your future plans? Are you going to stick with Structured Finance?

A: So far I’ve liked my group and fit in quite well here, but the economy is not so great and banks are thinking of cutting back in several different areas, including Structured Finance.

I’m not too worried personally because I’m just an analyst – AKA cheap labor – so I’m not as likely to be cut as the mid-level bankers.

Longer-term, whether I stay or leave is very dependent on pay. It is grinding and a lot of hard work, since you have to follow the markets and do deals.

So if the market goes sideways and bonuses plummet for a few years, I might potentially jump to a hedge fund or something else on the buy-side since I already have the CFA certification and the due diligence experience working with PE firms and HFs.

But right now, it mostly comes down to the pay-to-hours-worked ratio.

Q: Awesome, thanks for sharing your story. I learned a ton, and I’m sure everyone else reading did, too.

A: My pleasure!

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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  1. What are the four undergrad schools they recruit at? I may be in one but I have no idea; this will affect how I approach the recruitment process.

    Thank you, love the site!

    1. I don’t know, sorry. This interview is from a long time ago, and I haven’t been in contact with the interviewee in years. I actually did go back to my interview notes from years ago and look, but did not ask him for the names of the 4 schools or record them anywhere.

  2. Hi,
    I recently started working at “a normal company in a financing role and helping them issue securitized products to raise funds”. I’m not quite sure yet whether I want to stay at this employer for good or should try to make the leap into banking or asset management. So a few questions came up and hopefully the interviewee or someone else will be able and willing to shed some light into it.
    Do people in SF in banks have qualifications like CAIA (is it even heard of)? Or is this more sth for positions within HF/AM? I’m having my eye on it although it’s a big commitment as I feel I need to make myself more “interesting” for banks and HF. I suppose and somewhat hope that the CFA is not needed.
    How much Cash Flow/WAL modelling do you actually do as an analyst (not the quants) in SF? Is there any way to learn this without working in a bank or rating agency? This is the one bit I miss in my current position. The rest is pretty similar to what the interviewee said.
    Are any special programming skills like VBA, SQL, C/C# needed?

    My aim is obviously to excel in my current role but also to set myself up for the banking/HF world.

    Many thanks in advance!

    1. I don’t think the CAIA is common in SF. It is probably more common in buy-side roles. You can get a book to learn the basics of cash flow/structured finance modeling. You probably spend less than 50% of your time on it in the average analyst role. VBA might help a bit, not sure about the others.

  3. Any thoughts on the effect of automation to SF jobs?

    1. Not sure how much they will be affected, actually. I’ll see if we can update this article or do a more recent interview. But automation has probably made more of an impact on back/middle office work and trading so far.

  4. I have an interview coming up with a Structured Products group (which product I’ll be covering not specified in the job description) at a BB but don’t know much about SF.

    Preparing for IB interviews I already went through all the BIWS modeling courses including advanced ones but still don’t know much about SF. Do you know of any resources, books, sites, etc. out there that can help him prep or give him a high-level understanding of SF?

    1. We don’t cover Structured Finance at the moment, but one of these might help:

  5. I don’t want to specialise in a particular product too early. If I’m working in structured products origination doing typical banker origination pitch book work, what are my exit opps after a 2 year analyst stint?

    1. Maybe going into a related group like DCM/LevFin or something credit-related on the buy-side.

  6. One of my fav sites ever. Recently got a role as a structured credit analyst in the project and structured finance group. Project finance is what I was really going for but being a small local player they work on structured deals as well. This has given me much more insight than any other site about what it’ll entail day to day.

    Greatly appreciated.

    1. Thanks! We have a few articles on Project Finance as well.

  7. Thanks for this article…very interesting and helpful. One question, I have an internship in the structured finance division at a bank focusing on ship finance. Currently I am enrolled in the BIWS for fundamental and advanced modeling. I was wondering which areas i should focus on to better prepare for this specific internship?

    I did read your article on maritime shipping at investment banks ( but was not sure if this applies to structured finance.

    Thanks so much for the help!

    1. We don’t really cover Structured Finance specifically in the course, but if you’re relatively new to accounting/finance I would just focus on the Fundamentals course for now. The Advanced course is more complicated than most structured finance models since they are pretty much always focused on cash flow above all else – so some of the details in that course aren’t as applicable for SF.

  8. Not sure how old this one is (no dates argh!), but thanks so much for doing this Brian (and the chap who agreed to be interviewed).

    Incredibly interesting interview, this is one of the things I love about this site — shining a spotlight into some of the most esoteric stuff in IBs.

    Thanks again!

    1. Avatar
      M&I - Nicole

      You’re welcome. Thanks for your support!

  9. I’d say it’s not nearly as stressful as trading (no loss of sleep over mistakes/desks getting shut down or automated) or ibd (no weekend work), and in accordance with that, the pay is extremely competitive, at least at pre MD levels.

    Lots of ‘quantitative’ stuff as well, some of the products can go deep into hardcore financial concepts, and fairly often you get to innovate and and do things that haven’t been done before.

    Definitely a good place to

    1. Avatar
      M&I - Nicole

      Thanks for your input!

  10. I am a qualified lawyer in the EMEA area with M&A experience. I recently moved out of legal practice to a boutique regional bank (read, small) working in the front office (in a non-legal role) as an associate on small cap M&A and debt funding deal.

    I have now been offered a senior legal role at a big bank in SF. Ideally, I want to break into M&A/PE abroad – there are limited opportunities in my region – my plan is to complete a top-tier MBA after 2 years in banking to facilitate the move.

    TL;DR: Would it be more beneficial to stay in a related field (pre-MBA) at a no-name bank, or move to a well-known firm in SF given my goal of ultimately moving into top-tier M&A?

    1. It’s better to stay in a more relevant field at a lesser-known firm, because going to a legal role in Structured Finance wouldn’t help you with moving into an associate role at a bank or PE firm really… most of the time they want people with deal experience on the finance side.

  11. Do you think it’s easy to switch from structured finance to trading (similar products)?

    1. Avatar
      M&I - Nicole

      Depends on hiring needs and your ability

  12. I’m going to have an interview for a SF analyst position and these articles have been a very helpful source! The firm I’m interviewing with is an asset management company with a focus in SF, would you know if the interview would be similar to big banks? Would you know what is the difference in SF group between an asset management company and a bank?
    Thanks a bunch!!!

    1. Avatar
      M&I - Nicole

      I’d presume the interview may be a bit more laid back though I may be wrong.

      This article may not be completely relevant but should help you:
      AM –

  13. Hi, I recently received an interview for general financing-side IBD, which basically means the group with lev fin, structured fin, DCM, ECM, etc. The problem is, I dont know which group I am interviewing with as they didn’t specify. Do you know how this recruiting process will work? Will I be asked which group I want or will they decide after the first round? Thanks!

    1. Avatar
      M&I - Nicole

      I depends on the bank. I am not sure, perhaps readers can give you better suggestions. I believe there’s a slight chance you’ll be interviewing with peeps across all groups within financing

  14. This was a nice two-part article, and I hope this contributor will share further insights and that this website will explore structured finance / securitization in more detail. But I wonder whether an industry veteran would share this analyst’s opinion on the contributions of securitization to the financial crisis. Obviously, this article was not designed to address this in detail. But it is important to point out that this analysis omits the roles deregulation, low interest rates, an implicit promise of bailouts after the LTCM rescue, predatory lenders, hedge funds who inflated the bubble with demand for high-yielding equity tranches, hedge funds who further inflated the bubble by sponsoring CDOs to bet against, insurers who issued credit default swaps with inadequate or no capital reserves, mono lines that provided credit enhancement without appropriate diligence, banks holding CDOs as capital reserves, etc. played. Moreover, it is erroneous to allege that the government mandated subprime lending. The Community Reinvestment Act encouraged banks to lend to underserved communities, i.e., urban areas. The subprime crisis mainly concerned exurban homes, and it was lenders who were not subject to CRA regulation that did most of the subprime lending. I don’t mean to skewer this contributor when all he/she was trying to do was to help educate readers here. But I do think this is too important an issue to gloss over.

    1. Let me be clear that I agree with the main causes the contributor pointed out. It is important also to point out the roles the GSEs played by trying to compete in the subprime areas with the private label issuers.

      Again, I very much hope we hear more from the contributor about his/her experiences on this desk and others in this area. It was very insightful.

    2. Avatar
      M&I - Nicole

      Thanks for sharing!

  15. Avatar
    Stringer Bell

    I recently accepted a position with a big 4 firm in their structured finance group. Basically they work on assisting in various areas of a structured finance transaction, including valuation, checking models, and due diligence. Having this experience and assuming I would get a good grasp on different sf transactions do you see this experience being attractive to a bank if I wanted to make the jump? I have been told before that this is one of the best areas to be in within the big 4 if one wants to get into banking since we will be working constantly with bankers, just not sure whether bankers in sf look down upon the big 4.

    1. Avatar
      M&I - Nicole

      I don’t think they’ll “look down” upon you. Just make good use of this opportunity! This link should help:

  16. Can you please tell me what structured trust/structured finance trust role actually does?

    And also how does Structured Products group and Structured Trust collaborate or work in tandem?

    1. Avatar
      M&I - Nicole

      Readers might have better insights to your question

      1. Trustees administer the accounts belonging to the special purpose vehicles that the cash-flow from the underlying assets pass through on their way to the holders of the ABS. They also have contractual duties to protect bondholders in the event of default by the trust.

  17. Hey everyone, very informative interview, would it be possible to break into SF as an accountant with an auditing background? What would the best rebranding strategy be i.e. MBA, Finance masters, other professional qualification?

    1. Avatar
      M&I - Nicole

      I presume you already have the CPA? If so, maybe a CFA (for accounting) would help too

  18. Hi Brian,

    Thanks for the article.
    I have a question not related to this one, it’s more about networking. I traded emails with some MDs that I run into during recruitment talks, and some are pretty warm and willing to help. Do you think it would be a good idea to send a Merry Christmas email next week?

    Btw, I asked you before and was recommended to watch The Wire, Game of Thrones, Breaking Bad and Mad Man. They’re all great shows.And I like Mad Man very much. Is there any other TV series you would recommend?

    Many thanks.


    1. Avatar
      M&I - Nicole

      Sure, I’d send the emails.

      I don’t know what other TV series you are interested in but the ones Brian suggested should suffice!

      1. Thank you, Nicole.

    2. Other TV series: Homeland, Boss, Boardwalk Empire

      1. Thank you, Brian.

        1. The Killing is also good and check out Rubicon.

          1. Thanks, Adam.

  19. I think it would be worth adding that while this area has not gone to exactly zero headcount at most (bulge bracket) banks, it has been one of the most aggressively cut areas in the recent years, including this year and next year.

    Typically a bank doing this kind of stuff has to keep a fair share of the structure on its books, and it is normally the junk part (or “equity tranche”, should I say :) ). Post-crisis, these assets have had their risk weights massively bumped up (for example in Basel III), meaning banks have to hold a lot more capital against them, meaning it’s no longer as attractive on a return-on-equity basis.

    While I don’t claim to be an expert, I think pretty much everyone on the street is slashing risk-weighted assets of this area and, in this case, I think headcount follows. Correct me if wrong.

    1. Yeah those are good points, but most large banks still have SF groups in some capacity. As the interviewee said, overall issuance is 50% of pre-crisis levels but there’s still a demand for structured products.

      Basel III does change things but some types of companies will always find structured products useful.

      1. I think there is a labelling mismatch here. The interviewee works in and talks about one particular area which produces “structured products”, namely securitization, i.e. repackaging of debt in one form or the other and then selling this to investors. So although it is called “structured finance” for reasons beyond my knowledge, securitized structured credit/correlation is a much tighter fitting description.

        In fact most of “structured products” are secondary market products, both in fixed income, FX and commodities, and in equities, which is also called “exotics” informally. E.g. a callable Bermudan option linked to 10 year swap rate – 2 year swap rate.

        I am describing this as although both are called “structured products”, the latter are not generally hit as bad (although they are hit) as securitized products by the various regulations.

        My personal view is that banks will maintain a small capability to do securitized products, but not because they will see it as good return on capital (except for the high-margin unusual deals like the 100bps for the solar thing in the article), but to maintain client offering and preserve relationships. So they will still do it, but they will not be particularly hot to do it.

        Obviously to this whole comment and to the last 2 paragraphs especially the standard “forward looking statements/everything can be wrong in the end” disclaimer applies.

      2. Just went across a report from McKinsey that estimates the impact of the Basel III securitization provisions to be up to a ten-fold increase in the capital requirements for this business.

        Even if it were just seven-fold, that’s still not pinkish.

    2. 1. “Typically a bank doing this kind of stuff has to keep a fair share of the structure on its books, and it is normally the junk part” <– this is not true in the areas my group touches. Most of the revenue comes from helping companies issue asset backed and mortgage backed securities, which are sold to investors and not kept on the bank's balance sheet. Also, in this post crisis world, banks are extremely reluctant to put "junk" on their balance sheets

      2. Every shop on the street is slashing risk weighted assets, yes, but it doesn't directly hurt groups that issue securities. My group isn't known as an "RWA-hog" as they like to say.

      1. 1) I think they used to do it voluntarily prior to 2007, and agree that these days it’s not the thing they would choose to do voluntarily.

        However, I am not sure how far prior to Basel III this was due to formal or informal “skin in the game” rules. Under Basel III, though, banks have to hold 5% of all the securitizations they issue at all times. It’s the investor’s obligation to check that before they buy an issue it complies with this.

        They can either take the 5% from the “first-loss piece” or do a “vertical” slice across tranches. So I agree they can avoid the junk to some extent.

        So to sum up, banks will have to hold a portion of each securitization they issue whether they like it or not, and on this portion, they will have a several-fold increase in capital required against this. Am not an expert, so won’t argue how much that will be, but even three-fold is pretty costly.

        2) Thanks for the first-hand info.

  20. Hey,

    I think Breaking into wall street is down – I can’t access what I’ve signed up and couldn’t even send feedback on the site..

    Could you fix it? Thanks

    1. Sorry for the inconvenience – we are working on a fix ASAP and will send out an announcement once it is repaired.

    2. Just an update: should be fixed now.

  21. Are the fees greater for Structured Finance deals involving aircraft collateral?

    1. Not 100% sure on that one but if they are higher, they would still probably be lower than something truly unconventional like solar panels or alarm systems.

      1. Avatar

        I am at a buy side shop and spend some of my “typical” day on structured debt. My impression is that bespoke things are expensive for issuers (and investors). Bespoke in this context is anything where I can count post crisis deals on my hands, though I don’t really know anything about sell side fee structures on them. I imagine they make out pretty well.

  22. Very nice and informative article! Thanks! I thought that in SF, exactly because it’s a niche area and a couple of years back was making deals all the time, the pay would be the same as in M&A. Anyways, can’t say I would be disappointed if I actually got an offer and was paid 0.8-0.9x times as an M&A banker. :p

    Regarding the exit opportunities, personally I believe the best way to have a good chance in PE is to focus on “transferable skills”. For example, talking about the creativity demanded and understanding how a company generates cash-flows in SF, might be a “checkmate move” during an interview for a PE analyst/associate position. I think Mezzanine Funds, another niche area (but in PE), might also be more interested than traditional PE funds?

    1. Yeah that’s a good point. I bet mezzanine funds would be more interested than traditional PE, though perhaps someone else could confirm that one.

  23. So……………. how much do they get paid?

    1. “A: There’s minimal to no difference in pay at the junior levels: expect what you would get in any other investment banking group.

      Our revenues are smaller since it’s a niche area, but we also have a much smaller group.

      At the senior levels, MDs in the M&A group probably see bigger paydays than the MDs here because they can advise on much bigger deals and collect higher fees.”

      1. Avatar
        Forgetful was Uh...

        I think he was asking in terms of dollars.

        1. Look at the recent salary/bonus information on the site and adjust accordingly.

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