| Topic Name: |
Lots of misinformation |
| Message Name: |
Cap Mkts vs Industry |
| Date Posted: |
04/18/2000 |
| In Reply To: |
Hi Tech M&A Banker,
Do you think that the Debt Capital Markets group of a major debt house like SSB or ML is a good group for an analyst to start in? I
mean, will you get to see a lot of different debt deals, actually work on something productive, develop good skills, and have good exit opportunities? Or do you think it maybe better to work in and industry group, and have a bit of exposure to debt, but also see IPOs and M&A? Thanks is advance. |
| Message: |
Any placement in banking has its advantages and disadvantages. Just to clarify for people who aren't familiar with the Cap Mkts desk, cap markets acts as the liaison between banking and S&T. They physically sit on the trading floor, and they are the ones the bankers call when something happens to a client's stock and need to understand what is driving the market. Cap Markets professionals help brief bankers and clients on market conditions for new issue offerings. Part of the Cap Markets analyst function is to prepare market conditions presentations and sub-sections for use by banking teams.
A posting in Cap Markets has the advantage of putting you physically closest to the trading floor, which means that you will get a feel for the pulse of the market in a way that other bankers don't. Because part of your job will be to field questions from bankers and clients (or at least to see the cap markets bankers do it), my experience is that most cap markets analysts come out of the program with a very, very good understanding of the market and the factors that drive it.
The disadvantage is that you aren't involved in actual deal processing to any major extent. Banking teams will use your help to prepare presentations, but you basically are a resource for the transaction teams rather than an integral part of the processing team.
The result is that you will likely understand the way PPI or CPI announcements drive the market, and be able to communicate market drivers much better than analysts for whom market fluctuations only indirectly affect their lives (except in the case of extreme disruptions). But you probably won't work to any major extent on the deal advisory, committee memo preparation, detailed valuation or drafting that deal team analysts do.
The flip side to that coin is that the deal team analysts will never be the Floor hotshot you will be.
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