by Brian DeChesare Comments (156)

From Big 4 Restructuring to Investment Banking: How to Make the Leap

From Big 4 Restructuring to Investment Banking: How to Make the Leap

“Help! I hate my accounting job and want to move into banking, what do I do?”

“What group should I transfer to if I want to get into finance?”

“My Big 4 salary doesn’t give me enough cash for bottles!”

If you’re at a Big 4 firm right now, you’ve had one of the thoughts above before – maybe multiple times.

We covered how to move from accounting to investment banking before, but this time around there’s a different twist – an interview with a reader who moved from a Big 4 restructuring group to investment banking.

Here’s how he made the leap, and how you can do the same:

Background & Culture

Q: Let’s start with your background – how’d you end up at the Big 4 firm, and what did you do before that?

A: Sure. I actually started out as an athlete, and played at the college level for a few years before I got a serious injury that ended my career.

Then, I transferred to a smaller and lesser-known school in the Midwest, and got more interested in finance once I knew that being a professional athlete was no longer an option.

The investment banking industry is smaller in the Midwest, but there are still a few local banks there and they were doing a lot of distressed M&A deals for the auto industry, so I started contacting them and asking about internships each week.

After a ton of networking, one bank finally caved in and decided that they needed an intern – so I joined and got to help out with a few live deals there.

As graduation approached, I continued networking and found a few guys who used to work at a very well-known PE firm.

They had just started a lower middle-market fund just for family/small-business investments, and they needed some analysis done on Project Finance-type investments (power plants and such). I volunteered to do the modeling for that, and they were impressed with my work and turned it into a full-time internship.

Since I had so much experience in restructuring, I went to a restructuring group at a Big 4 firm after my internship at the middle-market PE fund. I stayed there for around a year, and then recently moved to a bulge bracket bank.

Q: That’s a great story – before we jump into it in more detail, I think a lot of readers might wonder what it’s like working at a Big 4 firm in their restructuring group.

We’ve covered the work and culture in IB and PE before, so how would you say the Big 4 firm compared to those?

A: There was definitely a skill set overlap – we did lots of cash flow modeling, presentations to lenders, and distressed M&A deals where we advised the company on selling, restructuring, or bankruptcy options. We also worked with the big auto companies, so you got good exposure to their finance teams.

The financial modeling and deal skills were similar, but there was a big cultural difference because we only worked on 1-2 projects at once and the hours were very, very tame. I only worked on one weekend, and a “late night” was staying to 8 or 9 PM.

So it was quite a bit different from the “work hard, play hard” culture of banking where everyone works to the point of exhaustion, and then drinks to the point of passing out.

Q: Why do you think there’s that cultural difference? Deals are still deals, so I don’t understand how you could “choose” to be less busy if you’re working with Fortune 500 clients all the time.

A: It’s mostly because financial advisory services were a very small part of what the firm did. At an M&A boutique bank, 100% of revenue comes from advisory, but at this Big 4 firm advisory accounted for maybe 2% of revenue.

Their focus was accounting/audit and consulting – they had investment banking and restructuring services, but they were an afterthought next to everything else there.

Q: OK, so it sounds like they consciously chose not to take on as much business as they could have since it wasn’t their core focus.

Obviously you did well moving into banking from restructuring, but what other groups would be good if you wanted to make the Big 4 to IB move?

A: As you’ve mentioned before, Transaction Advisory Services (TAS) can be good since you get exposed to bankers in some scenarios.

But I don’t think it’s necessarily the best group all the time because many TAS groups focus on accounting and due diligence, and you may not get exposed to valuation, financial modeling, or other aspects of the deal. They may also spend a lot of time on tasks that bankers don’t care about, such as making sure that working capital requirements are met when a deal closes.

So I would recommend looking at the internal middle-market banks that all Big 4 firms have – they do mostly sell-side advisory, and while it’s not comparable to the experience you’d get at a real bank, it’s closer than most other groups at the Big 4. Here are links to each firm’s internal bank:

And then anything transaction-related – like the restructuring group I was in – could work as well.

Networking & Interviews

Q: Can you talk about the networking you did to get the bulge bracket offer? What was the best source for finding contacts and meeting bankers?

A: Keep in mind that I had been networking all along, ever since I got my original internship via aggressive cold-calling.

So it was just continuing what I had already started – I took the Big 4 offer knowing that I still wanted to move into banking and would have to continue networking.

It was difficult to find bankers at first because few alumni worked in finance, I didn’t have co-workers I could reliably ask, and headhunters were useless unless you had at least some full-time work experience.

Q: So where did you find bankers if not through the usual sources like your alumni database?

A: A couple ways:

  1. High School Contacts – Even though my university had few alumni in finance, there were quite a lot from my high school who worked in the industry.
  2. Random Online Contact – I would just go through LinkedIn and look up bankers in the Midwest and start reaching out them like that.
  3. Cold-Calling/Emailing – This is how I got my first internship. It’s time-consuming and has a low hit rate, but it does work.
  4. Upscale Gyms – I joined a few higher-end gyms in my area and ran into a bunch of financiers there. I met a few bankers, people in private wealth management, management and turnaround consultants, and even a PE Partner like that.

All of that helped, but the most helpful thing for me was always asking, “I’m interviewing with this group / interested in this area – do you know anyone else I could speak with?”

I got tons of referrals with that line at the end of each call or meeting. It sounds very simple, but you’d be surprised at how many people are too afraid to make simple requests in a conversation.

Q: I really like the tip about upscale gyms; it reminds me of Gordon Gekko playing racquetball.

So it sounds like your strategy was pretty similar to what we’ve covered here before with investment banking networking, setting up informational interviews, and then following up aggressively.

How did you spin your resume when you were applying, since the Big 4 firm was your only full-time experience?

A: I actually downplayed the Big 4 experience, because I felt my banking internship and my work at the middle-market PE fund were both more relevant. So I focused on those and described my transaction experience using the template you’ve suggested before.

For my Big 4 experience, I focused on the valuation and modeling work and left out anything that was closer to accounting/audit.

Even though I had worked in restructuring there, I was interested in moving to industry or M&A groups in investment banking, so I didn’t want to make myself look too specialized by writing 100% about restructuring or distressed deals.

Q: That makes sense, and it’s great advice for anyone who has worked in a more specialized group and wants to move elsewhere.

What about the interviews themselves? Were they mostly technical or deal experience-focused?

A: They focused a lot on my deal experience – and more my experience at the bank and PE firm rather than in my restructuring group.

There were technical questions, but they were more curious about why certain deals happened, potential complications, and what I thought of the valuation and the process for different companies.

For some of the industry groups, a key question was “Why this industry?” They get a lot of people who don’t know why they want to work with financial institutions or industrial companies or whatever they cover.

Q: We covered a few possible answers to that one before, but what did you say?

A: In my final year of university I had completed a finance course where we valued companies in different industries, so I used that as my “spark” to show them how I got interested at first.

It didn’t work for every industry group, but by using that I could at least talk about my interest in the more common ones, like energy, financial institutions, and industrials.

I also used a few of your industry-specific modeling courses to demonstrate my interest and they were really impressed with that, since hardly anyone else had gone to the effort of completing entire case studies on these companies.

Q: I’m surprised by that one, because we generally tell customers that the industry-specific courses are more helpful once you’re already working – but you found them useful for interviews as well?

A: Yes – even just seeing real examples of NAV or dividend discount models for different types of companies was very helpful, because then I could walk through them in interviews.

And these were lateral interviews at the top bulge bracket banks – even there most other interviewees still hadn’t done as much as preparation as you might expect.

Q: Well, glad to hear the courses were helpful!

It seems like the interview process was straightforward for you, but I’m sure bankers had at least a few “objections” to your background. What were the key issues, and how did you overcome them?

A: Their main concern was that my academic experience looked very spotty.

I had taken a year off after I got my injury back in college, and then had to enroll in another school and ended up missing another semester, so it looked like I had taken forever to graduate and had been to school twice.

Some bankers just focused on that for 100% of the interview – they asked about all my gaps in education and why I had gone to schools they never heard of.

I answered those questions by explaining that for my first 2 years in university, I was practicing constantly, still doing well in school, and working 1-2 part-time jobs at the same time. So I spun a negative into a positive, and pointed out that I was working crazy hours a good portion of the time and could therefore handle the hours of a bulge bracket bank.

And then I also had my previous IB and PE internships, so they weren’t too concerned by the end.

What If? And the Future

Q: Since you had those internships, you had 100% relevant experience when applying to larger banks.

But what advice would you give someone who’s at a Big 4 firm in some other role, like audit? What should they do if they have no transaction experience and want to get into IB?

A: First, get out of audit immediately. Do something – anything – more stimulating.

People make fun of investment banking for being mindless work, but in my opinion audit is even worse because it’s so mundane.

At least with deals, you witness drama as different buyers and sellers express interest, back out, make different proposals, and negotiate. In audit you’re staring at numbers all day unless you happen to uncover the next Enron.

Most Big 4 firms are fine with internal transfers – it’s often easier than it is at a bank. Sometimes the Partner you’re working for may take it personally, but that depends on your group.

You should reach out to the other group you’re interested in first, contact people there, and make sure they know what you’re interested in doing before you even run the idea by your current boss.

The Big 4 firms all have lots of events and internal mixers where professionals in different areas can meet each other, so it’s easier to get to know other groups than it would be in IB – most people don’t work more than 50-60 hours per week, so they have the time to help you.

You really have no excuse not to move to a group that’s more closely related to banking – I would recommend restructuring, valuation, internal M&A, and TAS as your best options.

Q: It’s interesting to hear that the internal transfer may be easier at Big 4 firms, but I guess the culture is just more relaxed across the board.

So now that you’ve won this bulge bracket offer, what’s next for you? Will you stay at your new bank for some time, or are you thinking about moving to the buy-side?

A: Unlike most other bankers, I’m actually interested in staying in IB for the long-term.

Back when I was interviewing for this role, a number of distressed investment funds also approached me, but I wasn’t interested in PE back then and I’m not interested now, either.

My key issue is that you must put your own money to work to progress in PE.

It’s not just Partners investing the fund’s capital – they also put in their own funds, so a poor investment could wipe out a good chunk of your personal savings.

Yes, the pay ceiling is higher and you could make mind-boggling money – but let’s be honest, at the MD/Partner-level, the average is about the same in both industries. The outliers in PE make far more, but for me the risk isn’t worth it.

The other issue is that private equity is much less of a team environment than banking, and coming from an athletic background I enjoy working in teams more than the solo work that you see in PE.

Q: That makes a lot of sense, and that point you raised about putting your own money to work is a great one that often goes overlooked. Thanks again for taking the time out to chat, I learned a lot!

A: You’re welcome, it was 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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Investment Banking: Pakistan Edition

Investment Banking PakistanOK, I’ll admit it upfront: while this site has featured lots of interviews from readers in “hot” emerging markets such as China and India, I haven’t gotten too many requests for Pakistan.

But this is such a good interview and has such specific information that I wanted to publish it anyway.

Plus, the interviewee has been a long-time reader of M&I and captured the personality of the site very well. So let’s get started and learn all about banking, PE, recruiting, and the lifestyle in an emerging market that might be completely off your radar.

Introductions

Q: Can you tell us about your background?

A: I play the drums. I love buffalo wings with sour cream and ginger ale. I love stargazing. I’m a huge Tolkien fan. I find jazz very relaxing. I just discovered a hidden passion for photography and hopefully I’ll be traveling to Iceland in a few months after I buy a Canon DSLR.

I was born in Abu Dhabi and raised in Dubai. My father retired from his marketing job and we moved to Islamabad (Pakistan’s capital), where I completed high school and undergrad. I was a very distracted student during my O/A Levels because I really didn’t know why I was studying and what I wanted to do, so I definitely lacked direction for a time.

But during the first year of my undergraduate, I got really interested in corporate finance and M&A – so I actually performed decently and did much better than in high school.

After graduating, I networked my way into an investment banking analyst position at a bulge bracket bank in Karachi (Pakistan’s finance capital), and then I moved into private equity in the same city.

Q: Most Westerners know very little about Pakistan aside from what’s reported (accurately or inaccurately) in the news. What is the country really like, and how is the finance industry there different? Are the rumors of economic collapse / bankruptcy true?

A: A recent Newsweek cover described Pakistan as “The World’s Bravest Nation” – after describing it 3 years earlier as “The World’s Most Dangerous Nation.” I know the general perception is that it’s a country filled with corruption, religious fundamentalism, and no roads or women.

There is an element of truth to those claims, but for the most part we’re just regular people and most of what you read about in the news corresponds to a very small part of the country.

So don’t believe everything you read about the claims above (especially the part on roads and women) or the frequent accusations of terrorism – there are isolated extremists here but they are not representative of Pakistan at large.

Economically, we were always an underdeveloped country due to corruption from previous governments – but during Musharraf’s 10-year rule we were elevated to “developing country”status. Since that time the rulers have been questionable, so the progress has been disappointing since then.

The rumors of economic collapse are untrue. We’re not in the best shape right now, but we’re far from bankruptcy – the US and its allies also have too much of a stake in the country to let a bankruptcy happen. And we’re part of an IMF program that has pledged billions to us over the next 3-4 years.

Overall finance is still very much in a growth phase here, and private equity is at a nascent stage; Islamic finance is developing rapidly and corporate finance is also thriving. Hedge funds don’t exist yet, but many banks do have investment banking divisions and a handful of research and brokerage houses here offer investment banking and related services.

Q: What’s different about recruiting there? Do they prefer certain backgrounds or certifications?

A: The recruiting process for both IB and PE is highly unstructured.

Unlike the US or Europe where certain “paths” are preferred, here you can transition from almost any finance-related field into IB or PE.

I know people who have gotten into investment banking from industry, management consulting, and research, and people who have gotten into PE from Transaction Advisory Services, research, middle office trading support roles, and corporate banking.

Local banks here have a tendency to hire accountants and research analysts – and just like other regions such as India and South Africa, they love the CFA.

My VP (from the US) would always tell this analyst at my bank that the CFA was completely useless in banking, but in Pakistan people have been conditioned into believing that a CFA + an accounting degree is the key to achieving unprecedented glory.

Wheeling & Dealing

Q: You were at a bulge bracket bank there – do the other global bulge bracket banks have presences in Pakistan, or are local firms more common?

A: It’s a mix of both. JP Morgan has been here since the early 90’s, Citi even earlier than that, and Credit Suisse has been here since 2008. UBS and BoAML operate through local affiliates, but aren’t officially here.

Even though they’re bulge bracket banks, they usually work on deals worth around $100 million USD – sizable for here but small by US standards.

M&I Note: Middle market banks in the US would do deals of this size; most bulge brackets focus on $500M+ or $1B+ deals, though they do occasionally go lower depending on the market.

Since that’s “the bar” for bulge bracket banks, smaller, local firms – called “investment houses” – advise on deals worth less than $100 million USD.

They offer everything from research to mutual funds to M&A advisory and capital raising. Two of the largest investment houses also have consumer and corporate banking divisions that they use for syndications.

Pure-play boutique investment banks are still very rare here – off the top of my head I know of just one firm that offers only M&A advisory and restructuring services to clients.

Q: What types of deals and companies are most common in Pakistan?

A: The breakout for deal types is something like this:

  • Debt Financing: 70%
  • IPOs: 15%
  • M&A: 10%
  • Restructuring: 5%

M&A is most common in the banking and telecom sectors. Here’s a table of M&A activity from 2002 – 2010 that I’ve been updating from time to time:

Pakistan M&A 2002-2010

M&A in Pakistan rarely takes place to create value – this consolidation in the banking sector is driven by regulatory requirements (specifically higher capital adequacy requirements).

The actual rationale for M&A activity would be more interesting to look at – in my opinion it’s something like the following:

  • Regulatory: 65%
  • Gain Market Share: 20%
  • Divesting Operations or Exiting from Pakistan: 10%
  • Private Equity Investment: 5%
  • Value Creation: 0%

The government also has a massive privatization program in place (the numbers above exclude this, by the way) and so all the bulge brackets submit RFPs (Requests for Proposals) to the Privatization Commission for each deal.

Even some banks like Goldman Sachs, Morgan Stanley, and UBS that don’t have a direct presence in Pakistan will fly in, submit their RFPs, pitch, and fly out – they’re known as “parachute bankers.”

Some local firms also work on these privatization transactions, while the bulge bracket banks focus more on attracting institutional investors via road shows or finding international buyers for assets that the government is divesting.

Here are lists of completed and upcoming privatization transactions in Pakistan:

Got Networking?

Q: You mentioned how you networked into investment banking and then into private equity – how is it different in Pakistan? Do informational interviews and cold calls still work?

A: Right, so just to give you a brief overview first of how I networked my way in:

I went to a non-target school, but I did have 5 internships and decent extracurricular activities, as well as the resume template on your site. And I knew a lot about investment banking and private equity and kept up with global M&A deals and private equity activity via the NY Times Dealbook site.

A year before my graduation, I cold-called the bulge bracket bank I worked at – they’re known for only hiring summer interns from top US and UK schools, so it was a bold move.

A man picked up and I asked to speak to someone regarding summer internship opportunities in investment banking – the guy replied with, “I’m the guy” and he turned out to be my future VP.

I asked about the recruiting process for summer internships and he said they had already gotten started with interviews – but to email my resume anyway so he could send it to the team.

I did that, and about an hour later he replied and said, “When will you be able to join us for an internship?”

Q: Wait a minute, so you actually got an internship just by cold-calling a bulge bracket and asking for one?

A: Far from it, though that’s what I actually thought at the time – I didn’t even get an interview. I think he was just asking that to see when I would be free for an internship rather than actually giving me one on the spot.

He said they really liked my resume but were looking for a winter intern, which didn’t work for me timing-wise due to classes.

Over the next 5-6 months, I stayed in touch, emailed him on his birthday a la Bud Fox, added him on LinkedIn, and even sent the occasional random link.

Q: So you actually pinged him consistently – that’s interesting because I usually tell readers NOT to worry about constantly staying in touch and to focus more on making a good first impression and then asking for what they want when the time comes.

A: Right – you do have to be subtle if you want to take this approach. I didn’t want to give the impression that I was stalking him or wanted to be his best friend.

I did this more because I had an uphill battle given my school and background, and because there just aren’t as many banks in Pakistan – so it’s not like the US where you could easily go through hundreds or thousands of contacts to find the most helpful bankers.

Q: So what was the final outcome here?

A: In May I called him again, sent him my updated resume and “reiterated my interest” for an investment banking analyst position.

Despite being up against 100+ candidates from target schools, I was interviewed and offered the position.

What worked in my favor?

  1. I was myself and had the ability to laugh at myself – I didn’t act like some super-genius with perfect grades who claimed to know everything about finance.
  2. I had a burning desire to get into investment banking – I read everything and anything related to banking that I could find and this came across with how much I knew about the industry vs. the other candidates.

Q: What about your move into private equity? Did you go through a headhunter there or was that also networking?

A: Networking, once again. I cold-called my current PE firm’s Dubai office and spoke to a Partner there – we chatted about how Dubai has changed over the years and about the Middle East PE market in general.

I sent my resume, he forwarded it to the Partner in Karachi, and I interviewed a couple times and was offered the position.

M&I Note: This may seem ridiculous, but keep in mind that in certain parts of the world they are looking for very specific people and recruiting is less structured. It would be tough to pull off the scenario above in the US, but the same is not true in emerging markets.

Q: So it sounds like overall, the standard networking strategies still work and may even work better since recruiting is so unstructured in Pakistan.

You mentioned before how knowing so much about investment banking gave you a big advantage – but doesn’t everyone coming out of target schools there know the industry quite well?

A: No! A lot of students from top schools have absolutely no idea what investment banking or private equity are.

I’ve interviewed candidates from top schools here and this is how interviews often go:

  • Me: What do you think investment bankers do?
  • Interviewee: They make investments so that you get higher returns.
  • Me: Higher returns… um, ok, and why do you want to get into investment banking?
  • Interviewee: I’ve heard really good things about investment banking and [Interviewee inserts objective from his/her resume and “pitches” it] and how much I can learn there and bring my skills to the organization.
  • Me: Right, we’ll let you know.

One time I had a PE candidate try to convince me that he was a “private equity investor” because he invested in the stock market.

I’ve come across only one candidate who made a convincing argument for why he/she should work in investment banking or private equity. And I’ve met hardly anyone else who has networked his/her way into IB or PE here like I did.

But as you can see from my story, it’s definitely possible – if you’re hungry and motivated, you can do pretty much anything.

Private Iniquity, Pay, and Exit Opps

Q: Not to sound like those annoying kids in Harold & Kumar, but what’s it like working for a PE firm there? What types of companies do you invest in, and is your job more about sourcing or execution?

A: Work is very unpredictable, which makes the hours unpredictable as well. I’ve pulled all-nighters, and I’ve found that there is a massive cultural difference / work ethic difference between local firms and international firms.

PE firms here do not focus on specific sectors – they’ll invest in anything from green/brownfield projects to mature companies and even distressed assets.

LBOs are highly uncommon here and so most of these investments are minority stake acquisitions instead.

Work is a function of sourcing and execution – I’d say I spend 20% of my time on sourcing (looking for new investments) and 80% on execution (doing due diligence, modeling for investments, and coordinating our team).

Q: As with other emerging markets, I’m assuming that salaries and bonuses are lower on an absolute scale but higher on a relative basis if you take into account the cost of living – is that accurate?

A: Yes, definitely true. In a good year, an analyst at a local firm can make 10 to 15 times his monthly pay with his bonus (around 80% to 125% of his annual pay).

In average years an analyst’s bonus might be around 50% of his annual pay – which is quite a lot of money in Pakistan.

Q: And are your co-workers all from Pakistan or are you starting to see immigrants there as well?

A: Right now there are hardly any immigrants – it’s 99.9% Pakistani co-workers.

Q: What are your future plans?

A: I’m planning to attend business school in 2 years, ideally at Wharton. I do want to stay in PE, and post-MBA I’d want to go to a larger firm in the US and work there for a few years before returning to the Middle East or Pakistan. If all goes well, I might start my own buyout fund here one day.

I also want to take up stellar and extragalactic astronomy – it has always fascinated me. And if I have enough capital, I want to start a theme-based restaurant at some point.

Or I could just take the CFA…

Q: Please, don’t.

A: Yeah, I think my own restaurant would be more fun anyway.

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.

Break Into Investment Banking

Free Exclusive Report: 57-page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews

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by Brian DeChesare Comments (139)

Investment Banking: Dubai Edition

Dubai SkylineDubai: the hottest emerging market in the world? The best place to work in finance?

Or is it all just a mirage in the desert?

The truth is somewhere in between, as you’ll find out in this interview with a current investment banking analyst who works in Dubai.

We cover this reader’s background, what the investment banking industry in Dubai is like, how you break in, and the all-important exit opportunities.

In the Beginning…

Q: Can you tell us about your background and how you got interested in Dubai?

A: Sure. I’m from the Middle East originally, and was studying at a university in Europe a few years ago.

As part of my school’s requirements, we had to complete internships – most people opted for Paris or London, but I was interested in more exotic locations.

I was from the Middle East and had been reading a lot about Dubai, so I decided to apply for internships there instead.

Q: Ok, so you’re in Europe but you want to work in Dubai. How do you actually apply for these internships? Was it just through on-campus recruiting?

A: One difference between Europe and the US is that when companies come to campus here, no one takes resumes or does interviews – they just come for informational and networking purposes. Then they tell you to apply online, go through numerical tests, assessment centers, and so on.

I went to all these networking events and also did the online applications afterward – in addition to both of those, I contacted alumni and searched for people with similar backgrounds to me on LinkedIn.

Q: You said “similar background” – what do you mean exactly, and what kind of response rate did you get?

A: I looked for others who were from the Middle East, had studied in Europe, and then gone back to the Middle East to work there.

Surprisingly, I got a higher response rate from people I found on LinkedIn than from alumni.

This was probably because we had a shared background, and because most other students in Europe were not thinking about working in Dubai.

Q: Wow, very surprising. So what were the results of your internship search?

A: I got a 6-month internship at a bulge bracket bank there – in Europe it’s common to have 6-month internships vs. the summer internships you see in the US.

Then I went back to school the next year to graduate, and accepted a return offer from the same bulge bracket bank.

The State of the Market

Q: So is Dubai amazingly awesome? Is it the end-all-be-all or are people drinking a little too much Kool-Aid when they talk about the finance industry in the Middle East?

A: Dubai is overrated. When most people think of it, they look at all the huge buildings and the media stories about construction projects here, and all the oil barons using it as their playground.

The truth is a bit different – while there’s a lot of growth here, most of the companies we work with are outside Dubai.

We’re responsible specifically for MENA (the Middle East and North Africa), which consists of about 20 countries.

We cover all industries and all products, but most of our clients are sovereign wealth funds, financial sponsors, and other holding companies.

They’ve definitely been on a buying spree, so from that perspective it’s interesting.

When it comes to actual deals, though, we often manage the relationship and then the industry team from London handles the more technical details – especially on larger deals.

Q: Interesting – so is the finance industry there dominated by other bulge bracket banks that leverage their presence in London? Or are there local boutiques as well?

A: Regional boutiques do exist, but they’re limited to smaller IPOs and smaller deals in general – anything large is handled by bulge bracket banks based in the US or Europe.

Wheeling & Dealing

Q: You mentioned that the London industry team often handles the more technical details. So do you get to do much modeling work? Or is it all qualitative?

A: We get exposure to both. The London team has more of a presence on larger deals – they argue that they have more expertise and that they should control all the models as a result.

For anything smaller, we do the valuation and modeling work and they’re less involved.

If it’s an intra-regional deal – both the buyer and seller are from our region – then we’re also more involved and the London team doesn’t do quite as much.

Overall, though, it’s a lot different from working in a large group in London or New York because there are more “random” tasks and the teams here are smaller.

Q: You mentioned smaller deal teams – how are they different from what you’d find in London?

A: Our entire team is less than 30 people, and there are fewer mid-level bankers. We have a bunch of Analysts, a few Associates, and then some Directors and MDs but relatively few VPs.

So you get to work more closely with the MDs, and it’s not unusual to work directly with a Director or MD as an Analyst – which would be unusual at a bulge bracket bank in New York or London.

Lifestyle & Culture

Q: So how much do you work each week? Is this still banking or do you work fewer hours because it’s a regional office?

A: It’s still banking. I was working about 100 hours a week for the past 2-3 months, but like any other banking role there’s downtime and slow periods as well.

The average hours aren’t much different from what you’d expect in banking, but there’s less face time and they care more about work getting done vs. staying in the office late every night.

One part unique to the Middle East is that the entire region shuts down in the summer – CEOs are traveling and on holiday, so August is our slowest month (also due to Ramadan coinciding with the summer this past year).

M&I Note: The same is true in the US, though not to the same degree – lots of executives and bankers take their vacations in August.

Q: What about the culture? Do you hang out with your co-workers outside work?

A: There isn’t too much interaction outside work, even when we have free time – as an intern it was much different and Analysts / Associates would usually spend time with each other.

We might have dinner together, and we do have “team events” every few months to build camaraderie.

The Bottom Line

Q: Let’s talk about money. How much do you get paid, and is Dubai more lucrative than London?

A: Base salaries and bonuses are both the same as what you get in London… BUT we have no taxes here so effectively you make almost twice as much.

We also get a housing allowance of $30,000 US Dollars per year, which is also untaxed.

Normally it’s a bad idea to go into banking for the money, but if you work in Dubai you will make more than in other regions.

M&I Note: This trick doesn’t work 100% if you’re a US citizen – you still have to pay some US income taxes even if you live abroad.

You can deduct taxes for up to around $100K in income – which saves you a lot – but your taxes won’t be exactly $0.

Disclaimer: I am not an accountant / lawyer. This is not tax advice – please consult a professional.

Q: Wow, I’d move to Dubai in a heartbeat if I didn’t have this annoying US passport. What about exit opportunities?

A: Unlike the US, a lot of people here actually go into banking and plan to stay in it for the long-term. The whole concept of “Do this for 2-3 years and then jump to PE” isn’t as prevalent here.

Part of that is just a cultural difference in Europe and the Middle East, but part of it is also because pay at sovereign wealth funds and private equity firms here isn’t significantly higher than what you would earn in investment banking – so many people don’t see the point in leaving.

If you do want to move elsewhere, the 2 main options are sovereign wealth funds (SWF) and private equity firms – both local funds based here and then international ones like Carlyle and KKR.

One appealing aspect of SWF is that you get a high salary with great hours – one of my friends leaves at 6 PM every day and makes banking/PE pay.

I’m not sure what I’ll do, but one perk in my program is that I can choose to move to another region after 2 years, so that’s an option as well.

How You Can Work in Dubai

Q: Working at a sovereign wealth fund in Dubai is starting to sound good to me. What advice do you have for anyone looking to work there?

A: If you’re already in banking, the path of least resistance is to ask for a 1-year rotation to Dubai.

I’ve had friends who have done exactly this – they did internships in the US or Europe, got return offers, and then asked about switching to Dubai instead.

It’s tough to come here directly if you haven’t done an internship or you’re straight out of school – I would not recommend just showing up here and saying, “Hi, I want to work here, who will hire me?”

Q: So you wouldn’t recommend just applying directly to Dubai via online applications, for example?

A: You can do that, but the process is less standardized than it is in Europe. It varies by bank and in some cases you can just apply directly online via the London career website – but overall it’s more haphazard than Europe.

Q: Right. But let’s say you don’t know anyone in the region and you’re not in the position to apply for internships or full-time jobs directly – what do you do?

A: Headhunters are probably your best bet if you really don’t know anyone and have no strong connections to the region.

Just get a list of headhunters in the Middle East and start sending out your resume and contacting them – that’s not the ideal way to break in, but outside of networking and the formal application process it’s all you can do.

Q: What about the language requirements? Do you need to know Arabic, or is it just a plus?

A: It’s not necessary – plenty of people on our team come from the US or Europe, so they don’t know Arabic at all.

However, it is perceived as a plus and if the bank is down to 2 candidates with similar credentials, the one who knows Arabic is more likely to get the offer.

At the Analyst level there are more Arabic speakers, because sometimes we have to translate documents.

Occasionally firms will also create specific positions where the language is required – for example, KKR in Dubai was looking for Arabic speakers awhile back.

Q: Awesome. Thanks for your time – I learned a lot!

A: No problem.

Coming Up Next: Even more countries, groups, and stories. We’ll also take a look at another “hot” Middle Eastern country that has been off most peoples’ radar and compare and contrast it to Dubai.

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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