#M&A #FinanceJobs #WealthManagement #InvestmentBanking #FinancialCareer
π The changing landscape of finance careers in M&A
In a recent conversation with a director in M&A, we discussed the evolution of finance jobs and how they have changed over the past decade. The director mentioned that the landscape of M&A is not the same as it used to be more than 10 years ago, and there are now many other finance jobs that offer equally if not more lucrative opportunities.
π¦ Careers in M&A and Investment Banking
1. Investment Banking: Historically, investment banking has been one of the most prominent fields in finance, offering high salaries and lucrative bonuses to professionals at all levels, including those at the director level.
2. Mergers and Acquisitions (M&A): M&A has also been a popular career choice for finance professionals, with opportunities to work on high-profile deals and potentially earn substantial compensation.
3. Wealth Management: Another area that has gained prominence in the finance industry is wealth management, where professionals advise high-net-worth individuals on investment decisions and financial planning.
πΌ Changes in the finance industry
1. Increased competition: The director mentioned that the finance industry has become more competitive over the years, with a larger pool of qualified professionals vying for top positions in M&A and investment banking.
2. Diversification of opportunities: With the advent of technology and the growth of global markets, finance professionals now have access to a wider range of career opportunities in areas such as private equity, venture capital, and hedge funds.
3. Salary differentials: The director also highlighted that there are now many other finance jobs that pay equally if not more than traditional M&A and investment banking roles, leading to a shift in the perception of which roles offer the highest earning potential.
π Alternative finance careers with high earning potential
1. Private Equity: Professionals in private equity have the opportunity to earn substantial compensation through performance-based incentives and profit-sharing arrangements.
2. Venture Capital: Those working in venture capital can benefit from substantial returns on successful investments, leading to significant wealth accumulation over time.
3. Hedge Funds: Hedge fund managers and analysts have the potential to earn high salaries and bonuses based on their investment strategies and portfolio performance.
4. Corporate Finance: Opportunities in corporate finance, including roles in financial planning and analysis, corporate development, and treasury, can also provide competitive compensation packages.
π° Maximizing earning potential in finance careers
1. Networking and building a strong professional brand can help finance professionals advance their careers and access higher-paying opportunities.
2. Pursuing advanced education, such as an MBA or specialized finance certifications, can increase earning potential and open doors to lucrative finance roles.
3. Seeking opportunities at top-tier firms and leveraging industry expertise to negotiate competitive compensation packages can contribute to financial success in the finance industry.
In conclusion, while M&A and investment banking have traditionally been seen as the pinnacle of finance careers, the landscape of the industry has evolved, and there are now many other finance jobs that offer equally if not more lucrative opportunities. Professionals in fields such as private equity, venture capital, hedge funds, and corporate finance have the potential to maximize their earning potential and achieve financial success comparable to that of a director at a BB. By staying informed about industry trends and pursuing strategic career development, finance professionals can position themselves for success in today’s dynamic finance job market.
2023 was among the worst years in decades for M&A, syndicated debt financing, and equity offerings. Accordingly, most mid-senior investment bankers had horrendous end of year bonuses. 2022 was also quite bad, relative to 2019/2020/2021.
So I am not surprised that the current sentiment is poorer amongst bankersβ views of their careers. But current sentiment may be a tad draconian, as we are in a cyclical trough and bankers, like any humans, are prone to recency bias.
That said, there are additional structural factors that likely keep bulge bracket sell side pay, across the board, smaller than in the past. Notably, so-called Endgame bank capital rules in the US will further erode bulge bracket banksβ ability to provide committed financing for corporate M&A and sponsor buyouts, diminishing the fee pool and possibly leading to a greater shift in M&A advisory fees to elite boutiques. Trading desks will see reduced balance sheets, especially in less liquid products like corporate high yield/distressed, emerging market sovereign HY, and structured products.
However, if Trump wins, the capital rules will likely be materially softened, so I advise those in the industry to vote accordingly. I know Iβd rather be a rich man in a dictatorship like Dubai over a poor man in Swedenβ¦
In any case, to address the original postβs question, various jobs are perhaps superior to IB director, but ultimately depend on individual skillset, risk tolerance, and work life balance preferences.
– Private credit arm of top buyout firms (HPS, Ares, KKR, Apollo etc). Very high pay, potential for carry depending on specific team, much better work life balance vs both banking and private equity
– Capital formation / investor relations at top private equity or hedge funds
– capital markets / debt financing roles at PE firms
– investment role at long only asset manager for equities or ficc (Wellington, Capital Group, etc)
– capital market roles in niche asset classes at investment banks (asset backed securities, insurance linked securities, etc)
– real estate private equity
– Hedge fund analyst or PM at top fund
– private equity, generally better lifestyle vs banning
– various tech roles (data science, product mgmt, etc). If you work as hard as a banker does, and you are very strong technically, in these jobs you can accelerate career advancement and get to a similar place as a banker, especially given value of stock grants at big tech megacap companies
– lawyers at top firms with clear path to partnership (Wachtell, etc)
Buy-side credit is the way to go imo. Hours are great, comp is great, stress is manageable. Been at it for a few years now. If you avoid lifestyle creep and invest prudently, can easily retire in early to mid 50s.
Good question. I came across that connects you with industry professionals where you can ask them about specific aspects of their career / how to break into the industry. Both you and the professional are completely anonymous so youβd be able to ask unfiltered and candid questions about comp, likes/dislikes, how to stand out in recruiting etc.
Iβd recommend spending some time on that platform and scheduling a call with
professionals in the industries youβre targeting to see what path would be a fit.
Feel free to DM me if you want to chat more about it.
Best of luck.
I do hard money loans for real estate. Feel like itβs very niche and no one knows about it. Growing fast and you can easily make 500k+ at 25 years old
This was probably a polite response to a prospective intern (??) asking him about pay
Best to avoid any discussion and stick to more interesting topics
I mean at the senior level this is very true but at the junior level IB remains the best way to βopen doorsβ. You can do basically whatever you want after IB in terms of finance roles since working at a top bank is basically a stamp of approval that youβre a smart / hardworking individual
I mean not many jobs have the same earnings visibility and guaranteed high salaries as banking. If you donβt get fired in a downturn of course. Pretty insane money if you can survive the first 5 years
There’s smart CPAs who can do the job. No pedigree bullshit
s&t? looking for input from others on this as well
Corporate Banking. A lot of exit opps, chiller lifestyle, and still pretty high compensation if youβre okay with a BMW over a Rolls Royce.
Goldman sachs merchant banking (think they now go by AM private), MD at an EB (Centerview partners), Self sustaining wealth managers, 5 – 10 men team at no name LMM banks (check out Robey Warshaw), Qaunt & trading firms, tech & Fintech and Credit are what comes in mind.
Tbh even with my limited knowledge, I don’t think there’s many jobs that can pay you better than a MD at a BB.
Probably means Fintech, plenty of examples of people getting huge upticks in pay by leaving the big names for smaller well funded fintech startups.
Itβs not worth the effort.
Probably Risk i would imagine