You work in an investment banking division (IBD) and are based at a bank which divides its M&A staff into sector teams (eg Goldman Sachs) rather than grouping them into one big ‘analyst pool’ (eg. Barclays, for its first years). Which sector teams are best avoided? Recruiters are pretty unanimous: financial institutions groups (FIG) can be a career dead end.
“If you get stuck in a FIG team when you leave university and you don’t like it, you’ll find it very difficult to move into anything else,” says the head of one M&A recruitment firm, speaking off the record for fear of alienating future FIG candidates.
Part of the problem is that junior FIG bankers spend their time building dividend discount models (DDMs) instead of discounted cash flow models (DCFs). “It’s a different skill-set – says the M&A recruiter. You spend three years on DDMs and you’re no use to anyone in a different sector.”
Another recruiter of junior M&A bankers, also speaking entirely anonymously, agrees that FIG can be a one way street. “It’s very, very hard to get out,” he tells us. “You’ll find yourself pigeon-holed as a FIG specialist. I constantly get junior FIG bankers coming to me and saying they want a new job in anything but FIG but no one wants to hire them.
“The problem is that the skills are less transferable and in many banks FIG is seen as a corporate development rather than an IBD role – you’re looking at divesting and adding to parts of the bank’s own business,” he adds. “The reality is that most people don’t want to be doing FIG. It’s very rare that I phone people up and say, ‘I’ve got a FIG role’ and they say, ‘That sounds fantastic.'”
Nonetheless, FIG bankers are being hired. There are currently 54 jobs for FIG professionals advertised on eFinancialCareers, compared to 49 for industrials professionals. “FIG is quite unique and more complex than any other area,” says Richard Hoar, a director at recruitment firm Goodman Masson. “Yes, it’s specialized but FIG teams have been consistently busy and are consistently in demand.”
“FIG can be a double-edged sword,” says Logan Naidu, founder and CEO of search firm Dartmouth Partners. “If you want to keep your career options open, it’s very niche. On the other hand, you will develop the kind of knowledge that gives you something unique. Whereas a background in consumer or retail is quite easy to replicate, FIG knowledge can’t be built up overnight. That makes you individual and is valuable in itself.”
For all the warnings about getting stuck in FIG, some people do seem to get out. HSBC, for example, just hired Robert Walker, a former FIG analyst from BNP Paribas. He joined the healthcare team.