Do you want to work in corporate finance? Are you 19? Do you love the markets, love investing, and very much admire Warren Buffet? Are you wondering whether corporate finance is the place for you? If you are, someone’s fortunately left a lengthy diatribe along these precise lines on the question and answer website Quora (titled ‘Should I become an investment banker?’).
The answer, overwhelmingly, seems to be “no”
“There are a lot of downsides [to investment banking careers],” explains the most vocal respondent: “Long-hours, competitive-to-cutthroat environment (depending on your personality, this may not be a downside), and less-than-fulfilling work.”
Less-than-fulfilling work seems to be the main reason to avoid investment banking.
“Make no mistake about it: as an analyst in an IBD you are at the bottom of the pile; so naturally, all the worst, most dull, and most mind-numbing work goes to you,” the respondent goes on. “If a roadshow is coming up, guess who gets to set up and oversee the hotel and travel arrangements for your bank, the client(s), and the other syndicate bank(s)? If your MD needs a pitchbook to look perfect, guess who gets to go through and make sure all the font types and sizes are just-so, all the tables/charts/graphs perfectly aligned and labeled? Oh, he also needs it in half an hour; except at the 29th minute it turns out the client changed his mind, so you just basically busted your ass just for fun. In short, lot of the work will have very little to do with understanding and investing in ‘real ideas’; the biggest benefit really just comes from having the access to look behind the scenes, to see how the culture functions and how deals actually get done.”
Needless to say, there is an upside to all this: the pay. Website MergersandInquisitions has assembled an enormous infographic on compensation for first year analysts and associates (in US$). We’ve extracted the most salient sections below. Conclusion: junior corporate finance jobs may be tediously boring, but they pay well (albeit not as well as in 2007).
Source: Mergers and Inquisitions
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Sir Derek Walker, man of the people. (Guardian)
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Sir David Walker can only be an interim chairman at Barclays. (Telegraph)
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Goldman Sachs’ pursuit of Sergey Aleynikov seems vindictive. (Wired)
There will be no criminal charges related to the Goldman Sachs CDO affair. (Bloomberg)
Arki Busson’s EIM fund of funds employs 100 people. It helps to be royalty if you want to work there. (Bloomberg)
BofA, Goldman Sachs, Citi, JPMorgan and Morgan Stanley told to make plans to prevent their collapse, implying the government won’t help them. (Reuters)
“Engaging in ‘self-sacrificial behavior’ is a profitable long-term strategy.” (Time)
Wisdom=the degree to which people use various pragmatic schemas to deal with social conflicts. (Peerreviewedbymyneurons)