Careers in M&A tend to be fairly uniform - this is one of the more hierarchical areas of an investment bank and progression is usually linear over time.
Progress up through the ranks is reflected by different job titles: you'll start out as an analyst and will move on to become an associate, vice president (VP) executive director (ED) or director (D), and a managing director (MD) if you stick around. For a description of what analysts, associates, VPs and MDs do in M&A, click here. While it can take as little as 10 years to make MD in an investment bank, on average it takes 17.
As a loose rule of thumb, the more senior you are in M&A, the more exposure you will have to clients and the more junior you are, the more time you will spend building financial transactions and putting pitch books together.
Barbara Wong, managing director, Asia Pacific mergers and acquisitions, Wells Fargo Securities Investment Banking and Capital Markets stresses that the whole M&A hierarchy works as a team. "All of us strive to deliver the best results for the clients. In order to achieve that, the analyst and associate typically provide fundamental support to vice presidents (VP) and managing directors (MD) in terms of deal execution and business development."
As you move to a senior role, you'll have more "client facing opportunities", says Wong. "An MD typically is the first point of contact for the clients, management overall deal execution as well as key relationships. Additionally, MD also shares some of the managerial responsibilities within the investment bank."
There are no stages of your career where you’ll be doing something completely different because you’ve been promoted
Neil Thwaites, managing director of industrials, infrastructure and business services at Rothschild says that the transition to working with clients is gradual. "There are no stages of your career where you’ll be doing something completely different because you’ve been promoted. It’s more a change in the balance of your work. As an analyst your role is more about doing the analysis that underpins deals. The more senior you become, the more that you will be interacting directly with clients and providing them with advice. It is worth noting that junior members of staff at Rothschild have exposure to senior bankers and clients very early on in their careers."
Charles-Everard de T’Serclaes, a J.P. Morgan managing director specializing in deals involving financial institutions and governments in the Asia Pacific region, says advancement in an M&A career also means you'll spend more time on "project execution" or ensuring deals take place. "The ability to communicate, and multi-task will become even more essential as will your ability to provide insight and knowledge on specific industries," he says.
Anecdotally, M&A teams have high dropout rates. One ex-Goldman analyst says around half of her original team had left the bank after three years. Where do all these ex-M&A juniors go? Analysis by one ex-Bank of America Merrill Lynch analyst revealed that plenty of them escape to jobs in private equity funds. Private equity is often seen as more interesting than M&A, because private equity funds purchase companies themselves and then work to increase their value before selling them on again. It's not just about giving advice. Other M&A juniors leave banks for strategy groups within big companies, or for 'event driven hedge funds' which buy and sell stocks ahead of potential M&A deals. Some leave for technology companies, or become entrepreneurs...
On Wall Street in particular, it's traditionally been the case that university leavers spend two years as 'analysts' in M&A before leaving to study a top MBA course and then returning as an associate. However, this is becoming less common ever since Goldman Sachs ended its two year analyst contracts in 2012. - These days, university leavers join the bank on a permanent basis.