What is investment banking? (1 Viewer)

[runnable]

im still confused as to why im justifying this - am i that hard to believe lol scanning my payslip now! haha

first year pay is salary + sign on + housing + bonus
60 + 10 + 25 + 45 total comp 140... thats 9 months bonus, ie GFC level

back to my point, IB will pay you 500k in your first 3 years. This is likely to be 2-3x what an accountant makes and no we dont work double the accountant's hours.

Relax mate! Told you many times I'm not doubting you, just found some of the numbers weird.

Fair enough. I'm a bit surprised by 75% bonus but I guess that's possible for Tier One bonus.

Enjoy Hong Kong

Not double Big 4 accountant hours that's for sure. But just under.

 

[runnable]

so would hong kong be a better market for IBs career wise?

Yes overall, especially if you are looking to be internationally mobile or working in the Asian region. Bigger market, bigger bank presence. It's more intense in Hong Kong too (not too sure looking at Newbie's free time haha).

Compensation wise, Australia slightly beats out HK but that's because of the exchange rate. Slightly more laid back in Australia too. So you might avoid some 120hr weeks.

 

[Newbie]

so would hong kong be a better market for IBs career wise?

Unfortunately I think the hiring market for IB in hong kong for Australian graduates is closed and firms now recruit exclusively out of US and UK universities given the summer internship period is aligned with their school calenders (ie July, not November). I know morganstanley has a xmas internship in hong kong which do take in australian applicants but obviously its only 3-4 spots a year and maybe 1-2 offers so its very tough

I would say however that Hong Kong can certainly be a destination for someone with 3-4 experience in Australia, although language is important as China is pretty much 75% of the revenue opportunity

 

[Bendent]

you all pros

 

[seremify007]

back to my point, IB will pay you 500k in your first 3 years. This is likely to be 2-3x what an accountant makes and no we dont work double the accountant's hours.

A grad joining a Big 4 firm would probably be only on about 200k (60k + 60k + 80k) total over those 3 years assuming they joined as a graduate and got promoted to senior. Obviously the difference is if they were a high performing trainee in which case they would be joining at a higher level and it'd be closer to $285k (80k + 95k + 110k). So yeh, IB definitely pays a lot better but then it also comes down to what you enjoy doing and whether you appreciate the environment you're working in.

 

[Newbie]

A grad joining a Big 4 firm would probably be only on about 200k (60k + 60k + 80k) total over those 3 years assuming they joined as a graduate and got promoted to senior. Obviously the difference is if they were a high performing trainee in which case they would be joining at a higher level and it'd be closer to $285k (80k + 95k + 110k). So yeh, IB definitely pays a lot better but then it also comes down to what you enjoy doing and whether you appreciate the environment you're working in.

I think if you are the guys doing comfort on debt deals, its just as bad as banking lol
in fact the accountants and lawyers who work on banking deals add way more value than the actual bankers.

 

[seremify007]

I think if you are the guys doing comfort on debt deals, its just as bad as banking lol
in fact the accountants and lawyers who work on banking deals add way more value than the actual bankers.

LOL I think the challenge is the bankers see an opportunity in the market to do something (i.e. the visionary!). The lawyers and the accountants are the ones who actually make it happen in terms of meeting all the compliance requirements, preparing everything which needs to be done for each party, actually doing the due diligence work, etc. But alas, at least we get flexibility in our work (i.e. debt issuances and IPOs only make up about 30% of my year) and I guess the key benefit is I can just delegate

 

[NupPun]

Great thread. Bear in mind that nominal tax rate in HK is also much lower than that in Australia, where you're paying tax at 45cents in the dollar above $180k (which is basically most bankers).

I think you'll find that irrespective of position/job/industry/seniority, the Asians work longer and harder than their Australian counterparts. I have no direct experience in IB in Asia, but from my time in MC in China, I was pulling about 70hours/week in general and 80hours/week during pitch. My mates in big4 audit in Shanghai were pulling 100hours/week during reporting season (completely unheard of here).

You get out what you put in. Having said that though, I don't know how anyone can do 120 hour weeks consistently (unless every week was exam stuvac, then I'd have mastered the art of time dilation lol). Personally although I think the actual value add in these IB/MC services are actually quite minimal, these guys deserve every cent they get. It's tough and there's nothing to dilute that reality.

 

[runnable]

these guys deserve every cent they get. It's tough and there's nothing to dilute that reality.

Words of wisdom...

 

[seremify007]

My mates in big4 audit in Shanghai were pulling 100hours/week during reporting season (completely unheard of here).

No it's not.

But that only happens one or two weeks in the year for me. The rest is a lot closer to 50-70ish.

ps. Just to clarify: I'm person 2.
pps. If you don't recognise what form that is, you're too young to be committing to a life of investment banking lol. Go enjoy life!

 

[NupPun]

^ LOL you put that in a census? Mate that's freaking gold!!! Poor bureau of statistics guy must be stunned!

 

[runnable]

Should report to ABS to add another box for hours to accomodate investment banking people.

 

[Bendent]

LOL I think the challenge is the bankers see an opportunity in the market to do something (i.e. the visionary!). The lawyers and the accountants are the ones who actually make it happen in terms of meeting all the compliance requirements, preparing everything which needs to be done for each party, actually doing the due diligence work, etc. But alas, at least we get flexibility in our work (i.e. debt issuances and IPOs only make up about 30% of my year) and I guess the key benefit is I can just delegate

lawyers tsk tsk

 

[Bendent]

No it's not.

But that only happens one or two weeks in the year for me. The rest is a lot closer to 50-70ish.

ps. Just to clarify: I'm person 2.
pps. If you don't recognise what form that is, you're too young to be committing to a life of investment banking lol. Go enjoy life!

y not just drive there lol

 

[seremify007]

y not just drive there lol

In hindsight I may have filled it in incorrectly. I walked to work in the morning (as I live in the city) but I caught a taxi home in the evening because I was too tired to walk (and also remembered I had to do a damn census).

 

[Bendent]

ah i see.

 

[Azure]

Those hours are crazy

 

[seremify007]

Given that there is yet another onslaught of people saying they want to work in IB, I may as well bump this thread.

 

[Omnidragon]

Relax mate! Told you many times I'm not doubting you, just found some of the numbers weird.

Fair enough. I'm a bit surprised by 75% bonus but I guess that's possible for Tier One bonus.

Enjoy Hong Kong

Not double Big 4 accountant hours that's for sure. But just under.

There's a lot of related jobs that work far less than big 4 and get paid more than double. I have roped myself in to similar jobs in the past 3 years (started my first year at a bulge bracket).

To put in to perspective, the job I'm on now I've been there for a year. I work less than 50 hours each week (51 being my record here), and I'm on mid 3s. 4th year in the work force. In my 2nd year working, I was at a different firm and did around 45 hours each week. That year I was on around low 1s, with a small bonus of high 5-digits taking me to just 200. In my third year I was at the same firm doing the 45 hour weeks, was on mid 1s for base and bonus took me to nearly mid 2s. Sure it's not bulge bracket bonuses, but it's bulge bracket bases, and more importantly it's milk bar hours.

Going in to my 5th year, I'm actually about to semi-retire and focus on investing in houses around HK and Australia as I've invested over the past few years and have made multiples of my money, having hit the post-GFC boom (my first year of work) buying stuff like AGO at 80c watching it go to $3.00, hitting the 2009 Melbourne and HK property booms on 90% leverage.

At the end of the day, my advice to all the kiddies out there and also to people my age is we just need some perspective. The other day had drinks with my BDO friend who is on $100k and works til 12am every day. I asked him what's the point... when are you going to save your first $1m (not make, save)? Then I had coffee with my Freehills mate on $120k. He told me a senior SA was on $160k + $30k bonus. Again, no perspective. When will they ever save to buy a house? You do realise Parammata in Sydney and Footscray in Melbourne are fast approaching $1m. And I can tell you Wong Tai Sin new apartments in Hong Kong are selling at HK$10k/sqft now. You'd never be able to afford even something rubbish like Ka Hing Wan on that sort of income...

PS: I've known Serim and Newbie for a long time on these forums (nearly a decade) though not personally but can vouch for what they say.

 

[seremify007]

PS: I've known Serim and Newbie for a long time on these forums (nearly a decade) though not personally but can vouch for what they say.

Indeed. It has been a while. Just for the benefit of others reading this, no I do not work in IB. I do work hectic hours in big 4 accounting but it's what I'm good at and enjoy. That being said, the pay isn't as bad as others make it out to be but until you get to Partner, you wouldn't exactly be a 'baller' but you'd be able to afford most of the niceties of life which you'd want.