Equity Analysis vs Investment Banking

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askajan

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I am currently a valuation analyst and value closely held entities for various reasons (pre-ipo, estate tax, gifting, etc...). I am working on my CFA and have almost completed my ASA requirements (aside from the experience requirement). Does anyone have any input on the applicability of my current valuation analysis skills towards equity analysis or investment banking? I'm considering these two fields and I want to pursue opportunities I feel I could apply what I have learned here at my current employer.
 
My experience has been that if you didn't take an analyst position out of undergraduate or go to a top-tier MBA program you'll have little success getting into an IBank.

I have several years in an M&A / Strategic Finance group at strong companies plus a top part-time MBA and I'm not really getting anywhere; you might have better credentials than I though.

My bosses both went to Wharton and are both ex-bankers (Stephens and Solomon Brothers) I believe and they apparently had no difficulty so I guess that's the difference: Wharton vs. Robinson.
 
You could join a ibank but it may be a middle market bank. I know of several people from your background that make the jump. I would opt for a MM bank anyway....closer to deal and better exp to make switch to PE
 
askajan, you'd have an easier time getting into research as they are more open to people from non-traditional backgrounds like yours. there should be a lot of recruiting come january, and even though competition will still be stiff, start reaching out to headhunters around that time because there should be some turnover.

that's not to say your skills wouldn't be relevant to banking, and it's worth a shot if you're interested, but i would generally agree with the points that jmerten makes. as far as what goldenboy09 described, MM banks talk about how you work on smaller deal terms as a main selling point to join them, but this isn't necessarily true. firms like GS run pretty lean deal teams as well and the reality is that the type and quantity of work you do, whether it's for a one billion dollar deal or a multi-billion dollar deal, is not that different from one case to another -- the reality is that the work/productivity is pretty scalable. i also disagree that it's easier to switch into PE from an MM -- in fact, unless you're targeting a firm with a specific sector or industry focus, it's almost invariably easier to get in from a larger bank. PE firms respect and want the prestige/training that analysts from BB banks have.

but let's not get too far ahead of ourselves here...get your resume out there, but know that you will have an easier time getting into research than banking unless you have a very strong network there. and even getting into research is no shoo-in. good luck
 
hey Numi, do you think its easy to make the transicion from operations to ER? i currently work in bank loans for a large investment management firm. my plan is to pass L2 by next june and take some financial modeling classes along with programming ones (VBA). do you think this would add value and prob compesate the lack of formal training ( as you know, ops has nothing to do with ER) do you think this is doable? would appreciate your thoughts.
cart
 
hi cart10, unfortunately your background wouldn't make you stand out - I mean I'm sure you have a good shot at being able to do the job seeing as how neither research nor banking are "rocket science," but the challenge for you is to get an interview...best way to do that is by networking. you'll probably have to tap a personal connection on this because there are a lot of people who want to move from ops to ER, and on top of that there are a lot of people that actually have front-office finance experience trying to get into ER. it's quite competitive so use your networks to the best of your ability
 
Thanks for the advise Numi. I have been in the market litlled over 8 months. thats why i want to get out of Ops as soon as possible. ive heard that the longer you wait, the harder it is to break into any ER or ay other front office type role.
cart
 
How common is it to make the jump from business valuation to equity research? It seems like both of them would require a common skillset and knowledge of similar valuation methodologies. Is this a common career path, especially for those who did not go to a prestigious undergrad/grad school where ER positions are typically recruited? I bet that a business valuation job in transaction services for one of the big four would be a better spring board to ER than a local BV/accounting firm that does valuation work only for estate/transfer tax/divorce work. Any thoughts on this......
 
cart10 Wrote:
-------------------------------------------------------
> Thanks for the advise Numi. I have been in the
> market litlled over 8 months. thats why i want to
> get out of Ops as soon as possible. ive heard that
> the longer you wait, the harder it is to break
> into any ER or ay other front office type role.
> cart


agreed. it is never too early to start searching, especially in these markets. make sure you align yourself with some good headhunters...in fact, for research, there are quite a few firms that act on a contingency basis (rather than on retainer) and you would have your best shot with those.
 
Thanks again Numi,
like I said, I am trying to gain some skillsets so that i can include those in my resume. I know that now is not the best time to be looking for job. i will wait until May or June to start sending resumes out. i know the hardest part is to get the interview, because once your in front of the HR guy or Manager, other things come into play (i.e good fit into the team, personality, etc).
cart
 
that's not quite what i was saying. you should continuously try to build skills that are essential to the job (writing, modeling, etc.) but if you're looking to switch careers, the best time to look for a job is *immediately.* as you recognized earlier, the longer you wait, the harder it'll be to get in...and you shouldn't underestimate how much time it takes to find the right job.

it's wise to keep building your skill set, but ultimately you will learn what you need to learn on your future job...so in the meantime why not try to learn those skills while concurrently applying to jobs?
 
GoVols,

You should be fine going from big 4 into anything really, and if you don't get what you want the experience should help you get into a top mba to launch from there. The head of macquarie infrastructure funds canada is a former business valuation partner at one of the big 4 and a lot of CA's work in equity research at all the large banks in Canada. If you look at the executive and investment team biographies of most firms you will see a lot have experience at a big 4 firm. The head of Credit Suisse of UBS Canada, one of the two can't remember, is a CBV as well.
 
ca-cbv-cfa Wrote:
-------------------------------------------------------
> GoVols,
>
> You should be fine going from big 4 into anything
> really, and if you don't get what you want the
> experience should help you get into a top mba to
> launch from there. The head of macquarie
> infrastructure funds canada is a former business
> valuation partner at one of the big 4 and a lot of
> CA's work in equity research at all the large
> banks in Canada. If you look at the executive and
> investment team biographies of most firms you will
> see a lot have experience at a big 4 firm. The
> head of Credit Suisse of UBS Canada, one of the
> two can't remember, is a CBV as well.


Interesting. Thanks for the insight.
 
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