<p>I'm still trying to figure this one out. I mean, sure, you make lots of money, but you also work very long hours, and I doubt you get that much job satisfaction from it, plus your career ends at around age 40, maybe you'll have enough money to retire by then, maybe not. Also, although Wall Street is still getting record profits, it's losing some of its clout to other financial hubs around the world, due to tougher regulations and whatnot. So, I just wanted to know why people still want to go into I-Banking so much.</p>
<p>The money, power, best exit opps, best career choice if you want a top-notch MBA, prestige...</p>
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Why is everyone so gung-ho about I-Banking?
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</p>
<p>Well, frankly, the new big thing is private equity. Ibanking is a bit passe. At Harvard Business School, Ibanking is now seen as something you take because, frankly, you weren't good enough to get a private equity offer. </p>
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I'm still trying to figure this one out. I mean, sure, you make lots of money, but you also work very long hours, and I doubt you get that much job satisfaction from it,
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<p>Well, I suppose that depends on the person. I know a few people who seem tailor-made for Ibanking. Basically, the love the thrill of the deal. </p>
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plus your career ends at around age 40,
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</p>
<p>Well, I don't know where you got this from. As long as you are performing well, there is no need for you to stop at a specific age.</p>
<p>And of course, most people just see Ibanking just as a stepping stone to move on to something else, possibly the aforementioned private equity, but also perhaps a regular job in corporate finance. </p>
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maybe you'll have enough money to retire by then, maybe not. Also, although Wall Street is still getting record profits, it's losing some of its clout to other financial hubs around the world, due to tougher regulations and whatnot. So, I just wanted to know why people still want to go into I-Banking so much.
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</p>
<p>Uh, I think you've confused the issue. It is true that there are other financial hubs in the world, but plenty of Ibanking activity occurs in those other hubs as well. You can be an Ibanker and end up working in London, or Hong Kong, or one of those other hubs. Many American MBA's do just that. So even if Wall Street has problems doesn't prevent you from working elsewhere.</p>
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And of course, most people just see Ibanking just as a stepping stone to move on to something else, possibly the aforementioned private equity, but also perhaps a regular job in corporate finance.
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uh, sakky, ibanking IS corporate finance.</p>
<p>/nitpick</p>
<p>I've always wondered what the difference is. I look forward to sakky's response.</p>
<p>the way i see it, i-banking got their "pound of flesh" from me (in the form of long working hours and basically zero life in the early years) and i got what i wanted from i-banking (a top tier MBA degree and huge notches on my resume).</p>
<p>i got out when i could (and also had an attractive exit opp). i'd never go back frankly -- i kind of agree its a younger man's game. i mean of course there are older guys who absolutely love the it and couldn't see themselves doing anything else. i'm just not one of those guys. i saw it as strictly a "quid pro quo" deal from the get-go and didn't get sucked up in the "life".</p>
<p>while everyone loves talking about all the up-side - the prestige, the money, the power, the high profile nature of i-banking -- and this is very real and can be very seductive -- the downsides are also very real. i know plenty of guys who have gotten divorced, rarely spend quality time with their families, are under constant pressure the higher they go, etc... sure they've got a ton of money, but if they could go back and do it again would they have walked away from that next bonus payday in order to actually have a life outside of i-banking? perhaps.</p>
<p>i left when i could and i've got no regrets. i've also got plenty of friends who are still in the game and invariably the conversation boils down to their exit options at some point.</p>
<p>but don't get me wrong. i owe a lot to my i-banking experience, i just didn't see it as a lifelong career, merely a stepping stone.</p>
<p>I always wondered this too. To me, having a work-life balance is of the utmost importance. Yeah, I can see myself working 60-80 hours a week on occasion, but EVERY WEEK? No way. You can have the millions...</p>
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uh, sakky, ibanking IS corporate finance.
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<p>I hope you were just kidding with that. If you were not, trust me, Ibanking is NOT corporate finance. </p>
<p>In a nutshell, corporate finance is the practice of internal resource allocation within a firm. Investment banking is the procurement of outside financing through the capital markets such that you can then allocate that funding internally. But more importantly, corporate finance is performed from the client side, Ibanking is performed from the service-provider side. Hence, corporate finance and Ibanking are related, but are certainly not the same.</p>
<p>Why is private equity so hot now?</p>
<p>Sakky is correct. In the strictest sense, corporate finance centers around financial decisions a corporation would (should) make (or not make) -- hence, "corporate"+"finance". Anyone who has taken a basic Corp. fin. class is familiar with the number of tools to help firms come to this decision (e.g. NPV, DCF, WACC, CAPM, Black Scholes).</p>
<p>I think the confusion with this term comes on two levels:</p>
<p>1) Regional / cultural differences - e.g. in Europe the world of "corporate financiers" include i-bankers as a subset.</p>
<p>2) Many basic corp fin valuation tools (e.g. DCF - discounted cash flow and Black-Scholes option pricing) are utilized by i-bankers (particularly in M&A)</p>
<p>But Sakky is correct. Corporate Finance is not Investment Banking.</p>
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Why is private equity so hot now?
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</p>
<p>The money. The power. The money. The prestige. Oh, did I mention the money?</p>
<p>can an engineer do well in privete equity?</p>
<p>can an engineer do weel in private equity?</p>
<p>Sorry I meant what makes it seem more attractive now than it did before?</p>
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Sorry I meant what makes it seem more attractive now than it did before?
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<p>It pays much more than it used to. Also, certain other factors have greatly expanded the private equity industry. For example, the aforementioned Sarbanes-Oxley rules for publicly traded firms have actually encouraged companies to go private, and that plays to the strengths of private equity firms. (That is why they are called * private * equity firms). Secondly, the availability of relatively low interest rates has provided PE firms with loads of cheap capital and leverage that they can exploit to effect deals. </p>
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can an engineer do weel in private equity?
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</p>
<p>With the possible exception of a BS from Wharton, undergrad background is largely irrelevant. PE firms hire from all undergrad fields.</p>
<p>Successful people have left ibanks in droves for private equity firms because they (partners) can work for themselves, do it their way and make bundles.</p>
<p>SIGH. Just when I get into I-Banking the "cool thing" becomes something else :-/</p>
<p>...So, besides Blackstone, Texas Pacific Group and Carlyle, who are the top players in Private Equity?</p>
<p>I recently read an article titled "the demise of the investment banker"...does anyone think I-Banking will significantly change, decrease, etc, over the next few years/ couple decades?</p>
<p>I know Bain has a PE arm -- presumably several other major firms are at least considering it.</p>
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...So, besides Blackstone, Texas Pacific Group and Carlyle, who are the top players in Private Equity?
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KKR, and Apollo come to mind.</p>
<p>The "Bain" PE arm you're refering to is Bain Capital. Bain Capital is not actually formally related to Bain in any way, but was founded by several Bain partners including future Massachusetts Governor and current presidential candidate Mitt Romney. The two firms still are closely related, Bain Capital hires almost exclusively former Bain employees. But they are not related in the sense that Bain owns Bain Capital.</p>