I started writing a reply to this post and thought it would be better to make a longer post on it.
This isn't a definitive answer to bank X vs bank Y, but it's a start. The industry has changed. Rep still carries weight amongst prepubescent teens and the odd pick-up line at bar when conversing with a gold digger.
The rep aspect
Getting a job at the likes of GS proves one thing first and foremost - ability to excel. You get into Stanford because you excel. Similarly, you get onto a MIT PhD programme because you are expected to be the best at what you do and so far you've learned to excel. But it's like with most things in life, people don't really have a fucking clue. You want a Ferrari Italia because you like the reputation the car maker has (and because you probably have a difficult time picking up girls in a bar so the tarmac will do). For someone who likes their cars, you'd rather go with a Nissan GTR. Less than half the price, better round the corners and quicker on a 1/4 mile. This is the same with GS. They were a monster advisory house and then shifted most of its revenue to prop trading when that become the most profitable activity for a bank. At each cycle of a firm's life, there is a generation that puts them on a pedestal without seeing which bank has a faster 0-60mph time (Nissan GTR fyi). What GS has done well is survived and if survival of the fittest has anything to do with it how society perceives you, GS was alpha-fucking-male.
So if you wanted to jump to PE or a hedge fund, GS on your CV was/is one way of proving you were/are good enough. Just as MIT is one way of proving you're good enough to go into space when you apply to be an astronaut and ace all the PSL numerical tests for NASA.
Fast forward now
The banks you see around you are not what they used to be. Citi hasn't always been Citi. Solomon Brothers (massive player in fixed income) is now a tiny fabric of Citi. Look at the names that worked there - Lloyd Blankfein, Victor Haghani, Michael Bloomberg, James Wolfensohn and so on. Lehman knocked on the doors of GS throughout its career, as did Merrill. Again, we go back to survival.
'But wait, CTRL, what are you getting at here? Solomon is gone. Lehman is dead. Merrill had a shotgun wedding. Bear is extinct. GS is still king brah!' Not exactly. Rep will always make GS the wet dream of most kids who want to work in high finance, just as KKR will be the PE heaven because we all read Barbarians at the Gate. Change that thought process (to some extent). Regulation has all but killed prop trading. Never has the scrutiny on banks been so high, to the point that even your local shopkeeper will tell you to go fuck yourself if you work in investment banking because Hollywood was his guiding light to the truth...and that he heard about a guy he has no connection to, in Iceland, lose his pension...who also owned a shop...and shopkeepers around the world stand united...of course.
GS became a bank holding company (if you didn't know this and you want to work there, shame on you!) as did MS. We now see universal banks - large retail and commercial banking divisions sitting side-by-side with investment banks - Citi, BAML, Barclays, JP, Deutsche etc. The Swiss wealth management players have also had change the way they operate. Banks can no longer rely on a single revenue stream, and if they do, they better be pretty damn good at it (in come the boutiques).
So who is good and who isn't?
Every prestige whore will say something along the lines of "RBS is shit...who wants to work there?" Correction, RBS still has a good DCM group. What university (and high school) students need to get into their over-achieving thought process is that, ranking/reputation/(CV-to-penis size ratio) is all relative. The league tables at the moment, according to the FT, show GS 3rd. Does that make JP and BAML better banks? No.
'But CTRL, GS is the best. Lloyd is the best. I'll work my Sachs off to work there.' Banks now play to their strengths. Clients also feed off those strengths. Universal banks have the balance sheet. BAML, JP and Citi will lend to clients, advise them and also trade with them on the hedging side. Certain clients prefer to shit, shower and brush their teeth in the same bathroom. Other clients prefer to take a bath in one and brush their teeth in another. Banks which have the balance sheet to win mandates can now convince clients that if they're going to underwrite this next big bond issue, they sure as hell are going to be in on the next M&A deal. Now your decision becomes one about where you think you get the best experience. If you want to work in M&A, do you want to do it at a place which throws its balance sheet around?
Then you have the relative strength of certain groups across the street. GS TMT (yes, we all know), MS M&A, BAML LevFin, DB in FX, HSBC in EM, CS M&A and so on. Picking a bank because of the name and then being stuck on a desk which little or no flow will want to make you go back in time. Alternatively, basing your decision on what you've heard about a particular group at application time and making the decision a few months later can also prove to be foolish. A great example is CS's LevFin team. On the street, it was regarded as one of the best until the lady who headed it moved up to a senior position. Now most analysts don't view it the same. Conversely, BAML's healthcare wasn't the highest regarded team on the street until recently, when it was involved on a large number of deals. Then you have to look at what the group/desk does. Banks with good balance sheets tend to have good Industrials groups since industrial companies rely a lot on financing for capex etc.
Who gives a shit, this is the most important reason to pick a bank and/or team.
The People. 'Woah, CTRL, what are you...a socialist?' Hardly. 9/10 times if you pick your group and your bank based on the people you have met, your life in banking will be more palatable. Actually, a lot more palatable. 16-18 hours a day working at place you hate will make you question all of your life decisions, even what you had for lunch yesterday, because every working minute becomes unbearable. Again, I speak from experience having being stuck on a shit desk during my first internship, where the people sucked ass. Strangely enough, the desk following that rotation did the exact opposite for my perception of the bank. So once again, people over brand every time.
'CTRL, I want to work KKR and RBS DCM isn't going to get me there, is it?' - Probably not. In truth, MS, CS, DB, BAML have sent people to megafunds. GS doesn't entitle you yo a MF spot. Factors such as deal flow, analyst ranking and recommendations play a pivotal role.
Make the right choice and if GS or MS or HSBC or Lazard ticks the reputation box, the culture box, the team box, pick it. After all, pick the place that you can stomach for 2/3 years before you either wake up, smell the fresh air and decide to do something that doesn't push you towards insanity OR you enter another rat race, a la MF PE.
Ask anyone who's worked in the industry for a year or so and their idea of reputation is probably very different to what it was before they started.
This isn't a definitive answer to bank X vs bank Y, but it's a start. The industry has changed. Rep still carries weight amongst prepubescent teens and the odd pick-up line at bar when conversing with a gold digger.
The rep aspect
Getting a job at the likes of GS proves one thing first and foremost - ability to excel. You get into Stanford because you excel. Similarly, you get onto a MIT PhD programme because you are expected to be the best at what you do and so far you've learned to excel. But it's like with most things in life, people don't really have a fucking clue. You want a Ferrari Italia because you like the reputation the car maker has (and because you probably have a difficult time picking up girls in a bar so the tarmac will do). For someone who likes their cars, you'd rather go with a Nissan GTR. Less than half the price, better round the corners and quicker on a 1/4 mile. This is the same with GS. They were a monster advisory house and then shifted most of its revenue to prop trading when that become the most profitable activity for a bank. At each cycle of a firm's life, there is a generation that puts them on a pedestal without seeing which bank has a faster 0-60mph time (Nissan GTR fyi). What GS has done well is survived and if survival of the fittest has anything to do with it how society perceives you, GS was alpha-fucking-male.
So if you wanted to jump to PE or a hedge fund, GS on your CV was/is one way of proving you were/are good enough. Just as MIT is one way of proving you're good enough to go into space when you apply to be an astronaut and ace all the PSL numerical tests for NASA.
Fast forward now
The banks you see around you are not what they used to be. Citi hasn't always been Citi. Solomon Brothers (massive player in fixed income) is now a tiny fabric of Citi. Look at the names that worked there - Lloyd Blankfein, Victor Haghani, Michael Bloomberg, James Wolfensohn and so on. Lehman knocked on the doors of GS throughout its career, as did Merrill. Again, we go back to survival.
'But wait, CTRL, what are you getting at here? Solomon is gone. Lehman is dead. Merrill had a shotgun wedding. Bear is extinct. GS is still king brah!' Not exactly. Rep will always make GS the wet dream of most kids who want to work in high finance, just as KKR will be the PE heaven because we all read Barbarians at the Gate. Change that thought process (to some extent). Regulation has all but killed prop trading. Never has the scrutiny on banks been so high, to the point that even your local shopkeeper will tell you to go fuck yourself if you work in investment banking because Hollywood was his guiding light to the truth...and that he heard about a guy he has no connection to, in Iceland, lose his pension...who also owned a shop...and shopkeepers around the world stand united...of course.
GS became a bank holding company (if you didn't know this and you want to work there, shame on you!) as did MS. We now see universal banks - large retail and commercial banking divisions sitting side-by-side with investment banks - Citi, BAML, Barclays, JP, Deutsche etc. The Swiss wealth management players have also had change the way they operate. Banks can no longer rely on a single revenue stream, and if they do, they better be pretty damn good at it (in come the boutiques).
So who is good and who isn't?
Every prestige whore will say something along the lines of "RBS is shit...who wants to work there?" Correction, RBS still has a good DCM group. What university (and high school) students need to get into their over-achieving thought process is that, ranking/reputation/(CV-to-penis size ratio) is all relative. The league tables at the moment, according to the FT, show GS 3rd. Does that make JP and BAML better banks? No.
'But CTRL, GS is the best. Lloyd is the best. I'll work my Sachs off to work there.' Banks now play to their strengths. Clients also feed off those strengths. Universal banks have the balance sheet. BAML, JP and Citi will lend to clients, advise them and also trade with them on the hedging side. Certain clients prefer to shit, shower and brush their teeth in the same bathroom. Other clients prefer to take a bath in one and brush their teeth in another. Banks which have the balance sheet to win mandates can now convince clients that if they're going to underwrite this next big bond issue, they sure as hell are going to be in on the next M&A deal. Now your decision becomes one about where you think you get the best experience. If you want to work in M&A, do you want to do it at a place which throws its balance sheet around?
Then you have the relative strength of certain groups across the street. GS TMT (yes, we all know), MS M&A, BAML LevFin, DB in FX, HSBC in EM, CS M&A and so on. Picking a bank because of the name and then being stuck on a desk which little or no flow will want to make you go back in time. Alternatively, basing your decision on what you've heard about a particular group at application time and making the decision a few months later can also prove to be foolish. A great example is CS's LevFin team. On the street, it was regarded as one of the best until the lady who headed it moved up to a senior position. Now most analysts don't view it the same. Conversely, BAML's healthcare wasn't the highest regarded team on the street until recently, when it was involved on a large number of deals. Then you have to look at what the group/desk does. Banks with good balance sheets tend to have good Industrials groups since industrial companies rely a lot on financing for capex etc.
Who gives a shit, this is the most important reason to pick a bank and/or team.
The People. 'Woah, CTRL, what are you...a socialist?' Hardly. 9/10 times if you pick your group and your bank based on the people you have met, your life in banking will be more palatable. Actually, a lot more palatable. 16-18 hours a day working at place you hate will make you question all of your life decisions, even what you had for lunch yesterday, because every working minute becomes unbearable. Again, I speak from experience having being stuck on a shit desk during my first internship, where the people sucked ass. Strangely enough, the desk following that rotation did the exact opposite for my perception of the bank. So once again, people over brand every time.
'CTRL, I want to work KKR and RBS DCM isn't going to get me there, is it?' - Probably not. In truth, MS, CS, DB, BAML have sent people to megafunds. GS doesn't entitle you yo a MF spot. Factors such as deal flow, analyst ranking and recommendations play a pivotal role.
Make the right choice and if GS or MS or HSBC or Lazard ticks the reputation box, the culture box, the team box, pick it. After all, pick the place that you can stomach for 2/3 years before you either wake up, smell the fresh air and decide to do something that doesn't push you towards insanity OR you enter another rat race, a la MF PE.
Ask anyone who's worked in the industry for a year or so and their idea of reputation is probably very different to what it was before they started.
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