Finding Your Team

In general, it is helpful to have some idea of how investment banks are structured so you can focus your efforts as you hit recruiting season.

Bulge Bracket Vs. Middle Market Vs. Boutique?

Investment Banks come in all shapes and sizes! Bulge Bracket banks, such as Goldman Sachs, offer a range of advisory and product services to industry shaping clients in need of advice, financing, or capital structure management. Bulge bracket banks are primarily characterized by their ability to wield their balance sheets. Middle Market banks, such as Houlihan Lokey, focus on M&A deals of a particular size, typically $250mm to $1bn. Middle market banks give bankers the chance to work directly with entrepreneurs through the most important moments of the entrepreneur’s life, such as a sellside transaction. Boutique investment banks, such as Moelis, tend to focus on a specific product, mainly M&A, though more established boutiques often possess restructuring arms as well. Note that many categorizations of banks often overlap with each other, as the traits one would look to for the purposes of categorization reveal themselves to not be mutually exclusive. The important takeaway is that each model presents great opportunities and a thoughtful prospective banker should focus their energies on determining individual fit.  

Product Vs. Coverage?

The size of the investment bank tends to dictate how the bank and the bank’s deal teams are structured. For example, bulge brackets often have multiple product groups and coverage groups. While the M&A product group is often tasked with financial modelling for M&A transactions across multiple industries, a telecom, media, and technology coverage group would service clients only in their industry coverage area. Whereas the M&A team would understand the ins and outs of structuring a transaction, the coverage team would have a better understanding of industry trends and idea generation. 

Dissimilarity, at a boutique the product function is often embedded within the coverage group. For example, a banker would be responsible for both domain expertise in Healthcare and the M&A product side. Here is a list of some of the most common groups: 

• Product Groups:

  • Mergers & Acquisitions

  • Leveraged Finance

  • Restructuring

• Coverage Groups:

  • Consumer & Retail

  • Energy

  • Financial Institutions Group (FIG)

  • Financial Sponsors

  • Healthcare

  • Industrials

  • Real Estate

  • Technology, Media & Telecom (TMT) 

Speaking from personal experience, it is imperative to identify where your true interest lies earlier in the process. Introspection will not only enable you to have more authentic conversations during the recruitment process but also help you to choose between competing offers. Other factors, such as culture, commitment to diversity, or career prospects may play a larger role in your decision than bank characteristics, but a strong understanding of bank functions and the introspection to realize where you will have the best fit will certainly get you started on the correct path. 

By Aneeqa Mobashir, Forte Fellow and MBA Class of 2021. Aneeqa will be spending her summer at Houlihan Lokey.