Careers in finance Post MBA

Question

So I am pretty sure I want to go into MC post-MBA but was toying with finance. The only problem is I am extremely limited in my knowledge about the options. I know that I like a pretty high level of social time and limited number crunching time. Anyone have any suggestions. Any input or field in finance that you have knowledge would be beneficial to me as I pretty much have 0 knowledge. Thanks!

yb · Answer

Here are some:

1) Investment Banking

2) Equity Research

3) Sales & Trading

4) Investment Management

5) Private Equity 

6) Venture Capital

7) Commercial Banking

8) Corporate Finance

Any others?

5 & 6 are apparently tough to get into w/o previous IB/transaction experience or if you're coming out of a top-school or if you have awesome contacts. Correct me if I'm wrong.

johnnyx9 · Answer

I'm thinking the same thing, MC would be great, but corporate finance might be more appealing given the "life balance" that it affords. 

I work in healthcare finance which would fall under "corporate finance" or "industry finance" depending on people's definition. I think this is a pretty good place to be in terms of compensation and quality of life. The work is interesting, and it's a very "niche-y" sort of place, such that you get to know people in the local market very quickly. Having been in this industry for only four years, I feel like if I got fired tomorrow, I could have several job offers by the end of the month because I have such a great network of colleagues/friends who work in different organizations. What we do is so specialized that companies really offer up some good money to recruit people away from one organization to another. I suspect this is the same story with any sort of niche finance industry. Probably not the case if you're doing finance work at a financial services bank, or an insurance company etc....

squali83 · Answer

What exactly do you do? What would a "day in the life" read like, if you do not mind divulging that info.

haddy74 · Answer

copying from squali83:

What exactly do you do? What would a "day in the life" read like, if you do not mind divulging that info.

johnnyx9 · Answer

I work for a network of hospitals and physicians. We basically take care of all of their "finance" needs. Within my organization, the group I work in focuses on doing collective negotiating with insurance companies. The financial arrangement behind these deals can be quite complicated, so there is a lot of modeling that needs to be done during the negotiations cycle. There are also incentives built into the contracts that involve clinical performance goals, so some of our work involves looking at historical clinical data and making projections. For instance, if Insurance Company X offers discounted rates provided we can lower our high cost radiology treatments by a certain percentage, my group needs to analyze radiology data to see what a realistic goal might be.

Once the contracts are done, then they need to be implemented, and there are other functions that need to be tended to, such as projecting each hospital's exposure under the agreements, and providing them with these financial projections so they can properly account for these exposures in their financials.

A typical day involves maybe three meetings, usually don't have to go off-site, although I do have a couple of those meetings a week. The rest of the time is spent doing analytical work around the things I mentioned above. Generally work 40-50 hours a week, although every few months I'll have a busy week that's closer to 60.

The heirarchy goes like this: analyst, senior analyst, manager, director, VP, CFO. I imagine this is pretty similar to most corporate or "industry" finance organizations.

I think someone coming out of b-school could start out as a senior analyst or manager making 90-120K depending on their previous experience. I think a director level position is probably more like 140-200K, which could probably be attained maybe four or five years after graduating b-school. I think managers and directors work around 50-60 hours.

Not super-lucrative like most industries people are interested in on these boards, but the hours are pretty good. Something I'm thinking about if I decide MC isn't my thing.

squali83 · Answer

That does sound like a very interesting field. If I do go into finance I would prefer to be on the negotiating side of the table. Numbers just are not my thing. Thanks for the insight.

mba07 · Answer

50-60 hours??? Wow!!
120k for a 60 hr/week job is supercool!!

aceman626 · Answer

Good info. I am also interested in hearing similar info (compensation, advancement prigression, day in the life, etc) for the other finance sub-fields such as Sales and Trading, PE, IB (is it that horrible?).

Thanks.

3underscore · Answer

aceman - all of those are difficult to give. Basic salaries are the only true measurable but bonus is a huge part of those roles and is performance related.

Really all are comparable, and it is more what interests you. PE & IB (M&A) are hugely cyclical businesses driven by the yield curve and business cycle respectively. If you are there at the right time, the numbers are very big indeed.

If you are talking any career in the above each company will deem itself very much a meritocracy. This is basically judged on the fact that if you make lots of money, you will get career progression quickly. Similar if you don't make money, you will find yourself unemployed.

Day in the life stuff isn't going to be my forte, but I wouldn't expect PE to be much different than M&A IB as they are to all intents and purposes the same business.

died4me · Answer

I am reading the Monkey Business.
Although it is close to fictional, it does convey some truth about IB.

Are you willing to go through all that non-sense crap to make 250K+?
Are you mentally capable of actually going through all these crap?
Is the $$$ most important in your life?

If you answer yes to all these three questions, you should consider IB.

I do like $$ but not that much. :lol:

died4me · Answer

I just finished reading the Monkey Biz. Not just because of this book, but based on my info gathering, the last thing I want to do is the IB. :lol:

pelihu · Answer

I agree that IB in NY can be brutal. Of course, the vast majority of IB positions are in NY (talking about US domestic only). I believe that a substantial part of the IB crappyness stems from working in NY, and not necessarily the IB profession.

If you are able to land an IB position outside of NY, I think you'll work fewer hours, deal with less crap and have a measurably better quality of life. The downside is that if you are away from NY, your chances of moving up the ladder may be reduced. The other problem is that IB jobs outside of NY are really hard to land. I think SF is the next biggest destination, but competition is really tough. LA might be a little easier, and you'll find some related positions in Chicago & Houston as well, which should be less competitive.

3underscore · Answer

Any IB is pretty bad, though my friend who works in Chicago has it a bit easier (but is still tempted to go back to NYC, despite these reasons). The problem is that the big deals are in NYC, the big deals need more work in the same time scales, so longer hours. 

Working in a satellite office has less hours, less work, less money, less recognition. Any hub city is a lot more (NYC, London, etc)

pelihu · Answer

Totally agree with that. Still, I think it's an option that some people might find appealing. 1st year comp is averaging $225-275k at the big firms in NY, but some people might find the 80-100 hours week after week too much. People might find 60-80 hours a week more manageable, earning $175-200k 1st year in LA or SF, with an outside shot of making as much as the people in NY. Factor in a lower cost of living (everywhere costs less than NY, even SF) and things start to look a little different. Also, don't forget that if you want to live it up with a condo in NY, you'll have to pay city income tax, on top of state and federal (learned that one the hard way). $175k to start in LA or SF and leaving most days while the sun is still out (in the summer months at least) might be a pretty nice option for those that want to get paid (or is that pay'd) but aren't willing to forfeit their lives completely to the grind. There is no doubt that you'll be missing out on the big deals if you aren't in NY; heck that's the reason I moved from LA to NY as a lawyer - to do the big deals. Personally, I'm over that silliness, but everyone needs to find out for themselves, and I support the idea that everyone should at least spend some time working in NY if they can. There is also another option - for those willing to give up a little prestige to have a little better quality of life. Some middle market firms are doing brisk business these days and paying almost as well as the glamorous big names, at least in the early years. I think there's less of a sense that you need to sell your soul to these firms when you work there, but of course you're not going to impress the maitre'd or make the cover of Barron's (so to speak). Here's a link to the Vault.com summary for Houlihan Lokey: https://www.vault.com/eprints/HoulihanLokey2006.pdf So if you want it all, the big bucks, big nameplate, big deals and big recognition, you'll have to join one of the big-name Ibanks. If you're willing to give up a little cash or prestige or access, I think there are reasonable alternatives for careers in finance (in addition to the corporate finance roles already discussed).

dukes · Answer

I've heard good things about Houlihan Lokey. I've also heard that Lehman is a little better than some of the other big name players.

Porscheboy16 · Answer

Can anyone confirm the LA vs. NY difference? 

That sounds optimal for me. I could work 70-80 rather than 80-100 if I got paid $150k-175k.

Also do the hours still revolve around NYC in the LA Finance industry? I.e. get to work at 5 a.m. before Wall Street opens?

3underscore · Answer

Not in IB I wouldn't expect, unless on special occassions (dawn raids perhaps).

I really do think there is a risk that, although it meets short term aims, being in one of the IB offices outside the main has risks. Promotion is slower, and cut-backs are more savage. Irrespective of what you do, being under the big guys nose in head office helps.

"Equities in Denver" was considered a bad thing with good reason.

pelihu · Answer

If you work as a trader, you'll need to be in the office during market hours. I knew some people with Bear Stearns sales & trading in LA that got into the office at 4:30AM and left around 3PM, M-F. For other functions, you get into work at a normal hour (around 9-9:30AM I guess), and you take off a couple of hours earlier each day compared to NY. You definitely work fewer weekends too. This is a vast generalization of course and each person's experience will differ.

For those that want to build a career in IB, NY is the only place to be. For those that want to work in IB for 2-6 years and then move on, a branch office is a reasonable alternative. Of course, the further you get from the action, the tougher it will be move ahead. NY is best, and Chicago, SF & LA are next. When you start talking about Houston, Denver, Cleveland etc., the chances of making a career out of it are slim. But from what I can tell, not many people here are planning 20 year careers in IB.

squali83 · Answer

This information is good to know. If I could do 60-70 hour weeks in IB for 5-6 years in Houston or Cali I would be happy. For me, if I worked in IB it would not be to establish a career, rather make some $$ and have it on my resume. Plus 4:30-3 are stellar hours, yes you are up a little early, but you get out at 3 everyday, hit the gym, take a nap and hit happy hour! :-D

Careers in finance Post MBA

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