John Mullally is director of financial services (Hong Kong) and director of Shenzhen at Robert Walters.
Career liquidity: As more investment bankers look for jobs outside financial services, what doors can be opened by their skill sets?
In an environment of job insecurity, lower bonus numbers and increasing regulatory burden, a sizeable number of investment banking professionals are trying to make the move out of financial services and into the corporate world. Whilst some individuals have managed to make such a transition, many more have struggled to reinvent themselves in a new industry.
The two questions we field most often are: how achievable is it to make such a move, and what types of companies and positions exist for someone making such a transition?
There are a number of factors that determine how difficult it is to make the move from investment banking into a corporate role. The two most important are level of seniority and the exact type of experience one has obtained in one’s career. Too often we have seen people at analyst and associate level with investment banking backgrounds move into strategy and corporate development positions and end up rather underwhelmed with their new role.
The fact of the matter is that to make a difference in such a role, one has to have a level of experience and know-how that those in their 20s and early 30s simply do not have. Moving into a corporate with two to five years of investment banking experience does not equip you to make a significant impact on the direction of a large business. If you are comfortable with that fact, and see this move as the first step in a career transition into a new industry, then it can serve as a rewarding and enriching learning experience.
The other side to this argument, though, is that the number of roles available in the corporate world to MD-level investment bankers is very small. Most companies seek product and industry expertise over the deal-making and business acumen that a senior investment banker brings to a role.
However, as multinationals have sought to grow their presence in Greater China, and Chinese conglomerates ready themselves for a stock market listing or a round of equity/debt financing, there has been increased interest in experienced and capable bankers who can fulfil multiple roles within their businesses. Such functions can encompass strategy, business development, capital markets issuances, investor relations, and general management/COO duties.
The role that one steps into will depend greatly on the company that is hiring and their needs. Bankers who have diversified their overall skill set over the years are therefore best placed to make such a transition. Many of the more technical skills that a banker acquires over the course of their career will be largely redundant in the corporate world. However, the ability to execute a deal – which is very important in corporate development or internal M&A roles – manage and motivate people, and draw upon a network of investors, clients, and financiers are all skills and experience that companies are looking for.
In my experience, the greatest determining factor in whether such a move proves to be a beneficial one is the quality of the business that one moves into. With all the negative press that banks (and bankers) have been receiving recently, and the increasingly difficult operational environment that many bankers find themselves in, it is tempting to view any non-financial services job opportunity as a welcome change.
Too often I have seen bankers make the move just to get out of banking, rather than them having an actual interest in the new industry that they are stepping into. As in all career moves, you need to be very thorough in your due diligence and have as good an understanding as possible of the industry and company culture before you take that step.
Once you do decide to make this move, though, you need to be as certain as you can be that it is the direction you want to move your career in. The door to investment banking won’t be slammed shut for you in the future, but it is a good deal more difficult to transition back to that world after you have moved out of it.