Simon Tilley, MD, Head of Financial Sponsor Coverage at Stephens discusses the merits of sticking with an advisory career


Planning for the long term: Advisory or PE and deciding which career path is right for you


Droxford Partners

* Interview from February 2022

Life as a junior in investment banking can be tough.  You work long hours, you can be juggling numerous projects and have constant demands on your time both at work and from friends and family.  But banking is an excellent training ground, laying the foundations for numerous career options further down the line.  Indeed, many candidates we speak to strive to move to the buyside as the preconception is, rightly or wrongly, that this career path will suit them better.

But the role of an advisor evolves with seniority and whilst PE may be the perfect career for some, it doesn’t always offer what some candidates are actually looking for and the path to an advisory MD may be a more fulfilling route. 

The past year was both a challenging and rewarding year for many.  How was 2021 for Stephens?

2021 was a very positive year for growth at Stephens.  The transatlantic investment banking business experienced strong growth in dealflow, revenues and headcount.  We’ve worked on some market-leading transactions including plenty of transatlantic deals that have seen colleagues in Europe and the US working closely together to deliver great client outcomes. In terms of growing the UK team specifically, we have welcomed some fantastic new colleagues into the London office over the course of 2021 at all levels, including graduates and Analysts, with more to come over the coming weeks and months.

It’s great news that you’ve hired graduates and Analysts to help build the London team.  We’ve seen large increases in Analyst and Associate base salaries recently but what else do you offer juniors to attract them to an advisory career at Stephens?

Aside from offering market-based renumeration, here at Stephens we recognise the importance of providing a rich, vibrant learning experience. 

Our history makes for a stimulating working environment; Stephens is a family-owned and broadly based financial services business that includes an investment bank. 

“Aside from offering market-based renumeration, here at Stephens we recognise the importance of providing a rich, vibrant learning experience.”

The firm was established in the USA in the early 1930’s and expanded into Europe via the investment banking business in 2014.  The firm’s leadership saw the opportunity to create a European leg to the business that would enable Stephens to serve clients on a transatlantic basis and that is very much what has been built. The business now originates and executes transactions across the full spectrum of sectors on an international basis which makes for interesting, varied work. 

Further to this, we have a genuinely collegiate environment and offer a setting where our people are always learning and have the opportunity to make a difference, whatever their seniority.

There is currently a shortage of junior bankers, so retention is key.  What do you think can be done across the market to retain people within investment banking?

Obviously pay is one factor, but it is only one of several. I would say that providing an interesting working environment is vital, combined with clarity of career path and keeping people enthusiastic about and engaged in the work they do.  As long as your people feel they’re developing where they are then they will think twice about returning the headhunter’s phone call!

Many candidates currently working in advisory express interest in moving to the buyside.  What factors should individuals keep in mind when considering their options?

Think about the amount of transaction experience you have gained so far.  How many deals have you done?  What have you learnt?  Remember that advisory firms will likely be a better training ground than a PE firm.   You will see more deals through from start to finish as an adviser than as an investor, so make sure that you have that bedrock of experience on which to draw.  You will look at a lot and do comparatively less at a PE firm; maybe complete one deal every year if you are lucky but more likely two or three deals over the life of a fund. 

“As long as your people feel they’re developing where they are then they will think twice about returning the headhunter’s phone call”

If you are seriously considering a move to the buyside then there are a few points you should bear in mind:

Understand that you will need to decide whether to specialise in a sector or be a generalist.  If you specialise - where and why?  If you are keen to be more of a generalist, be careful as the market is moving inexorably towards sector specialisms.

Know that it is important to find a part of the market that genuinely interests you.  As you become more senior, so you will start to originate more.  You will be more successful engaging with management teams and originating deals in a sector or part of the market that you understand and for which you have a passion.

Recognise that culture is so important.  Take time to really understand the culture of the different firms that you are considering and which one would suit you best.

“At the end of the day, the role of an investment banker changes with time and seniority, and I would advise juniors to take a thoughtful and considered approach to their career.”

Finally, ask yourself, what sort of investor do you want to be; venture, growth, buyout, turnaround?  How do you think about creating value and making a return?  From buying cheaply / fixing up / bit of growth / multiple arb?  Or from overpaying for a great platform and management team operating in a market with significant tailwinds and pulling multiple growth levers.  Both are perfectly valid investment strategies but require a very different mindset.                                           

At the end of the day, the role of an investment banker changes with time and seniority, and I would advise juniors to take a thoughtful and considered approach to their career – don’t just jump ship the moment things get hard.

For you personally, what have you particularly enjoyed about your career in Sponsor Coverage / Advisory?

It has been a privilege to have had the opportunity to develop some really strong and long-standing client relationships over the course of my career. The most fun and rewarding experience has been working in a role that combines sponsor coverage with transacting – working closely with colleagues on buyside, sellside and capital structure advisory transactions serving longstanding clients on deals that are really important to them.  Some of those deals were carefully planned whereas others were more opportunistic – but the common threads are teamwork, collaboration, persistence and relationships.

“…be alive to and seek out opportunities to broaden your horizons.”

As I think you can tell, my preference has always been having the opportunity to develop long term relationships with clients that are punctuated by transactions. Investing is more opportunistic. Of course, investors like to get to know management teams ahead of investing in their businesses and backing them - but the sheer volume of capital in the alternatives space that is seeking a home (and, very often, the same home) makes for an extremely competitive landscape where desirable assets are incredibly expensive and the opportunity to differentiate is very hard indeed.

What advice would you give to analysts and associates who have ambitions to make MD?

Build a broad-based range of experience from an early stage. Embrace opportunities to work with different senior colleagues across a range of sectors and product groups. Gaining experience in capital structure advisory is highly complementary to building a career in M&A, and vice versa, so be alive to and seek out opportunities to broaden your horizons.

“Ultimately, a successful MD in a mid-cap investment bank will have the ability to both win and execute transactions.”

For the most part, the deals on which I have advised have been successful because they were built on relationships of trust and respect that had been carefully cultivated over many years.  As you progress in seniority your relationships will become more important and influential so it is essential to focus on and nurture them, even from the early days of your career.

Ultimately, a successful MD in a mid-cap investment bank will have the ability to both win and execute transactions. In the mid-cap space, work typically doesn’t just come in – you have to go out and find it; so having a reputation for consistently high quality execution alongside building and investing in client relationships and bringing in the deals is fundamental to a successful long term career in advisory.

Some food for thought if you’re an analyst or associate currently working for an investment bank and considering a move to the buyside.  Time will change your role and you’ll find that as you progress it will become clearer to you what makes you tick.  It is evident that there are many questions you should ask yourself before making the move; the key is to be informed not impulsive.  Take your time and do your research, talk to your network within banking and the buyside at your level and beyond and work out what makes you want to get out of bed in the morning both now and in the future.  Your day-to-day today won’t necessarily be your day-to-day tomorrow.  For some, a move will be exactly the right thing to do.  For others you may very well find that what you’re searching for is right under your nose and in the end, the grass is not always greener. 

This article has been prepared solely for informative purposes as of its stated date. It does not purport to be a complete description of the subjects referred to in the material. The views and opinions expressed in the article are those of the author. Any expressions of opinion speak only as of the date of the preparation of the article, do not necessarily reflect the opinions of any other person or entity, and are subject to change without notice. 

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