| Topic Name: |
Should I leave consulting for IB |
| Message Name: |
HSBC |
| Date Posted: |
01/28/2001 |
| In Reply To: |
The firm is HSBC..and the group has yet to be determined. The first 2 years are structured into an 8 week training program and followed by 3 rotations that last 6-8months. You are given input into what areas you want to rotate through..i.e. M&A, Private Equity, or Sales and Trading (my personal choices). After the 2 years you become an associate in one of the previous 3 rotations which is mutually determined. I know HSBC is not a BB, but they are a top European Bank with a lot of growth potential, and who knows they may even make a major acquisition to gain a better US presence. Positives are that I hear the culture is a bit more relaxed than at other banks and that the hours are not as brutal. ---Right now I am just trying to gather the opinions of others so I can be more confident in the decision that I make. |
| Message: |
HSBC is indeed one of the top European banks, but you need to assess in what service. For example, the top European M&A, equity and high-yield banks, whether through the media or industry league tables, are unquestionably Goldman, MSDW, Deutsche, UBS, CSFB and maybe Dresdner or ABN Amro. To be completely candid, I've never come across HSBC as a serious competitor when our European groups made pitches for any of the three products mentioned above.
I believe HSBC is a strong player in syndicated loans with the group mentioned above (minus Goldman and MSDW) plus JPM Chase and Citigroup. Again, HSBC is without a doubt a top notch commercial bank. Let me tell you right now that you do not want to be involved in the leveraged loans division because the work is absolutely brainless. Think about how much processing bullshit there is when your parents took out a mortgage for their homes. Even more bullshit is involved with a $2 billion syndicated loan. I've been on one before and that is all I want to see in my life because when it's all said and done, leveraged loans are commercial, not investment banking.
I apologize for that diatribe on leveraged loans. You are right in speculating that HSBC may make an acquisition in the US, but it needs to come in big in order to avoid an ING Barings-esque blowup. The only major targets left in the US are Goldman, MSDW, Merrill, Lehman and Bear. All will undoubtedly sell for a huge premium that will lower the probability of a purchase being successful. If the markets pick up in 2001, no one will sell. Period.
Investment banking isn't all that either. It pays a hell of a lot, but ask yourself what will you be doing on a day to day basis. More importantly, how much will you be using your brain? Will you be frustrated at doing less challening work than consultants? The finesse analysts develop in IB is paraphrasing 10-K's and corporate websites, and running comps. All are brainless after the third month on the job. Financial modeling is challening at first as well, but again, after the third month of doing that, it becomes more of a droll game of putting pegs through holes. The true strategic thinking in IB comes at the VP+ level, where ideas are taken seriously. As much as we would like to think otherwise, analysts and most associates do not have the industry or financial expertise to originate successful ideas. How challening is strategy consulting? Do you get a chance to toss in your ideas seriously before the VP level? That is why I feel consulting offers more brain usage opportunities than IB. Someone else said this before, but I want to reiterate that McKinsey, Bain and BCG open more doors than HSBC would no matter where you go. Have you thought about passing on HSBC and applying to other US-based investment banks?
Those are my two cents. Good luck on your decision.
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