Finance Manager Career Progression

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Kison Patel is the founder and CEO of Chicago-based due diligence software, which uses Agile principles to innovate and modernize the financial industry. As a former M&A consultant with more than a decade of experience, Kison developed after seeing first-hand many of the deep-rooted structural problems and inefficiencies throughout the industry.

Finance Manager Career Progression

Anyone interested in a career in mergers and acquisitions should be aware from the outset: this is not for amateurs.

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While from afar it may look like it’s all about hustle and bustle, spotting business potential and making millions in commissions by closing it, the reality is actually less glamorous.

Businesses are not so easy to sell and they can wait years for the right buyer to come along.

During this time, investment bankers with sales authority will update sales documents dozens of times and perform repetitive tasks such as refreshing company information, financial data and market outlook.

The team may not have heard of the company at the beginning of the project, but it is not an exaggeration to say that by the time the company is sold, they will be more familiar with its work than 95% of the employees.

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Such is the repetitive nature of the work, along with the fact that potential customers can ask literally anything about the company.

We, at , work specifically in the M&A industry and have gathered as much useful information as possible to give you a full understanding of how to start a career in M&A and answer any related questions you may have.

A good M&A career puts you at the nexus of finance and strategy unlike any other position. Early in your M&A career, you’re likely to be exposed to a level of seniority—and, more broadly, industry expertise—that most other roles take years to acquire.

It can also be very profitable if done well, especially on the consultant side. Companies large and small rarely conduct M&A transactions themselves, instead hiring brokers to assist them in the process.

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Smaller deals typically result in a 10% commission to the broker, while larger deals – those in the billions – can bring 3% commissions to the brokers involved.

It is also useful from an intellectual point of view. An M&A career requires people to think strategically. It’s not just about closing deals—it’s about finding the right companies at the right time in their business cycle, selling the opportunity, creating a financial structure that works for everyone, and then making sure the deal is successful after the ink is dry. on the contract.

If you want to know a typical day of someone in M&A, just scroll down this article.

In each case, there are different levels of seniority, starting with analyst and associate positions before moving up to management and director positions involved in negotiations and personal contact with target companies.

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In the first category, large industry players that conduct many transactions typically have in-house M&A teams. These M&A roles usually require people to have some industry experience.

For example, all of the biggest tech companies have in-house M&A teams, and all of those teams are well-versed in emerging trends in the tech industry, so they know an attractive deal when they see one.

The second category of intermediaries includes all those companies that do not buy companies themselves, but advise third parties on their mergers and acquisitions. These include investment banks, law firms, strategic consulting companies and brokerage houses.

Here, the position involves less industry expertise and more business focus: Brokers are typically industry agnostic, focused on building businesses rather than any particular industry.

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Finally, there are private equity firms and such businesses (pension funds, growth funds, venture capital funds, family offices, etc.).

In some ways, these positions are similar to industry M&A roles, with the caveat that the focus is on finance rather than strategy. The final goal is the sale (“exit”) of the company after several years of improving the financial situation. While industry knowledge can be an advantage, financial expertise is usually more valued.

A further consideration is deal bonuses: brokers receive a success fee when deals close, and this is usually split between the team responsible for closing the deal. This fee can be between 3% and 10% of the transaction, depending on its size.

Typical M&A salaries as of September 2022 in the United States are typically in the following ranges:

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So, once you get in, you can expect a good salary. The following rough figures are taken from various JP Morgan ratings in their London office.

We must also take into account that the salaries of men and women may differ. Because gender pay gap data shows that the top four lenders pay women on average 28.9-35.2% less than men.

While graduate programs at investment banks will – inevitably – seek the brightest candidates from the best universities to fill their M&A roles, they too will be open to accepting people from non-traditional paths as they prove themselves. competent in mergers and acquisitions at a certain level.

This also applies to non-top-tier banks and blue-chip companies with internal M&A; basically, if you are able to put together an attractive and persuasive sales document for a business, that is a very good start.

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You don’t need a CFA for finance, but at least some knowledge of financial statements and how the business you’re selling has performed over the past 3-5 years helps.

Jobs are always created on LinkedIn. Post a job alert under ‘M&A’ and you’ll probably get at least a few jobs every day.

Even if they don’t end up hiring you, you know the company is growing their M&A team so you know they’re looking for transactions. Here you have the opportunity to be proactive, get in touch with someone in the company and who knows, they will hire you down the line as they will see your skills first hand.

Remember that M&A careers vary from company to company, but many of the skills you acquire in one position will be transferable to others.

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Your skills are just as important as your experience. The following chart shows the most common skills when entering investment banking (left) and the most common when exiting (right).

Analyst positions in investment banks are hotly contested both at the entry level and after the probationary period begins. You’ll need excellent grades in everything you do (you’ll always be from a numbers background, and engineering is an increasingly popular choice for IB recruits), as well as being very social (so they can put you in front of clients).

There are many stories at some investment banks about how far analysts have to go in their first years to get tenure, but fortunately this unhealthy machismo culture is largely a thing of the past.

Goldman Sachs, for example, stopped its two-year analyst program in 2012 and now only hires full-time. And that means more investment in the individual.

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The M&A analyst position has one of the steepest learning curves, making it a very rewarding career path in addition to the often attractive pay packages. Even a short period of just a few years in one of the most famous investment banks can mean that someone is much more sought after on the job market for the acquired skills.

If it’s the latter, you’ll need to show some stellar and relevant work in the interim. For example, it might be working for a boutique bank where you had a lot of client opportunities.

There’s less powerpoint and financial model redesign (although this applies to all levels of M&A to some extent) and more client advice, meetings with potential buyers (or target companies if you’re on the buy side) and even a few winings and dinners where you’re graciously hosted they invite.

Stepping away from investment banking for a moment, an associate position is typically the lowest position a company in the industry will hire in an M&A.

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This means that it is very unusual for a non-financial company to hire someone in an analyst position – these companies do not have the kind of transactional pipeline that requires a long hierarchical structure in the M&A department.

Continuing on the industry theme – for anyone who hasn’t worked before, this is a great opportunity, as corporates are much more open to atypical M&A experiences than investment banks.

As mentioned in a recent article on working in M&A, in some complex or specialized industries, a good knowledge of the market and competitive dynamics is more important than knowing Microsoft Excel.

In investment banks, the job of mergers and acquisitions manager – in addition to the traditional role of overseeing the company’s operations – is mainly:

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