Investment Banking in France
If you think that France is all about drinking wine and working on a pitch book, you need to reconsider. There’s more than what meets the eye. Investment banking in France is not like any other country. The recruiting process is different. The culture is not so classy. And the way people work their way up differs from other countries.
Let’s dive in and we will discover investment banking in France in detail.
In this article, we will talk about the following –
- Investment Banking Market in France Overview
- Investment Banks in France – Services Offered
- Top Investment Banks in France
- Investment Bank Recruitment Process in France
- Culture in Investment Banks in France
- Investment Banking Salaries in France
- Investment Banking Exit Opportunities in France
Investment Banking Market in France Overview
Investment banking in France market is quite diverse. You will find every sort of banking here. From bulge bracket banks to small investment banks, everybody exists. Quite a few French investment banks have made their mark, e.g. BNP Paribas, CACIB, Natixis, etc. And also few European investment banks have been operating quite successfully in France, e.g. Santander, BBVA, HSBC, etc. But they all have Paris-based teams.
The focus of the deals here is on middle-markets. Most of the investment banks (boutique investment Banks, local, and bulge bracket Investment banksBulge Bracket Investment BanksTop 10 bulge bracket investment banks are - Blackstone, Goldman Sach & co, Morgan Stanley, J.P Morgan Chase & co, Bank of America Merrill Lynch, Credit Suisse, Citi, Deutsche Bank, HSBC, UBS.) concentrate on middle-market deals and the volume of the deals is usually lower than deals handled by the US’s investment banking market.
In France, you will see a lot of industries. And that’s why the focus of the deals is industry-specific. And investment banks here focus on deals that are industrial-related. That means you will rarely see any service-deals.
What’s quite natural to expect is a large number of vineyard deals. You would see many investment banks handle this sort of deal. There’s even one specialized investment bank that only handles vineyard deals – it is Wine Bankers & Co.
Investment banking in France is quite large and it has been growing at a steady rate. Many small, new, big, foreign investment banks have been spreading their wings to take an opportunity in this market. That means as investment bankers, you would have great opportunities and room to grow in your career.
Investment Banks in France – Services Offered
Investment banking in France is diverse. As a result, the local banks offer a large gamut of services. We will pick up top services these banks offer and have a glance at them –
- M&A Advisory: It’s quite common in Investment Banking in France. The deals are usually big and they offer a lot of assistance to their clients. The French investment banks are famous for their unparalleled expertise. The credit goes to its top-notch recruitment process. From New York to Hong Kong, Paris to Los Angeles, these banks help in closing multiple M&A deals by their world-class advisory.
- Assistance in selling industrial businesses: As French investment banks are known for handling deals in industrial sectors, they also help in the sale of the industrial businesses. The process is quite complex and needs a strategic advisory.
- Assisting private equity firms in selling one of the portfolio companies: Private equity firms exit when the deal doesn’t seem lucrative to them anymore. Investment banks in France help these private equity firms exit through the right route. The idea is to sell one of the portfolio companies or help them in secondary buyout sale.
- Specific acquisition opportunities: When private equity firms Private Equity FirmsPrivate equity firms are investment managers who invest in many corporations' private equities using various strategies such as leveraged buyouts, growth capital, and venture capital. The top private equity firms include Apollo Global Management LLC, Blackstone Group LP, Carlyle Group, and KKR & Company LP. see profitable deals, they need a lot of funds. At that time, investment banks in France come to their rescue. This is one of the buy-side assignments executed by French investment banks.
- Capital Raising: Investment banks in France often help medium-sized companies get access to funds. The companies mainly deal with apparel, food beverage, beauty products, internet, medical, and energy. The turnovers of these companies are usually between $25 and $150 million. These companies often need funds to expand their businesses and French investment banks raise capital to fuel their growth. They do it by identifying the suitable investor, conduct the road-show, and help in negotiating the terms of the deals.
- Advisory to management teams: This is one of the most significant services offered by the French investment banks. These investment banks help CEOs and management teams in taking an active role in the whole process (i.e. private equity firms selling a portfolio company). The deal size is actually around $250 million.
Top Investment Banks in France
Leaders League has done a survey of top-notch investment banks in France in the year 2017 on the basis of M&A Acquisitions – Industry Large Cap. These investment banks are given ranking as per their performance. Let’s have a look –
Leading: The first list includes the top-most banks who had done significantly well in the year 2017. There are only two investment banks in the list
- BNP Paribas
- Deutsche Bank CIB
Excellent: This is the next rung. Under this head, there are many top-notch banks –
- Bank of America Merrill Lynch
- Societe Generale
- Barclays Capital
- JP Morgan
- Morgan Stanley France
- Rothschild & CIE
Highly Recommended: Under this head, there are few investment banks which you can consider joining –
- HSBC Bank PLC
- Credit Agricole CIB
- Credit Suisse
- Goldman Sachs
- UBS Investment Bank France
Recommended: This head is the last one and these banks performed well but not as great as the previous rungs –
- Barber Hauler Capital Advisors
- Bucephale Finance
- Citigroup Global Markets
- Messier Maris & Associes
Investment Bank Recruitment Process in France
There’s a lot to talk about the recruitment process of investment banking in France. Let’s have a look at the process –
- Networking: If you want to get into investment banking in France, the best way is to network heavily. Your first goal should be to find out an off-cycle internship before you ever try to get a full-time opportunity. The way to network is to find out your alumnus network and try to get through. You can apply at your graduate school and can access the intranet or you can go through the top firms’ websites to get the contact details.
- Off-cycle internships: If you think just 2-3 months will help you get an edge in French investment banks, you’re blatantly wrong. In France, you must do off-cycle investment banking internships to get an edge. Off-cycle internships are of 6 to 12 months long where you would be learning the secrets of the trade. And as a result, you will be ahead of the rest of the crowd. However, you need to be aware of the consequences. Because many investment banks hire interns for “cheap labor” and when the internships are over, they don’t even bother to offer them any full-time opportunity. So before you ever apply for internships, you need to research thoroughly the investment banking firm and its history of recruitment.
- Interviews: There are two kinds of interviews you need to go through – off-cycle internships interview and the full-time employment interview. The interview process is similar for off-cycle internships interviews and full-time employment interviews. The only thing that is different is the number of people you will meet to go to the last round. In internship interviews, you will be meeting around 6-12 people (from analysts to MD) and in full-time interviews, you will meet twice of that number of people during the process. Sometimes, HR matter a lot during the interview. For example, BNP Paribas values the opinions and judgments of HR more than anything. But in other investment banks, HR is not given that much value during the interview process. In Investment Banking in France, assessment centers are not very prevalent in London. And the primary objective of the interview is to find out whether the candidates are “fit” for the investment banks or not. Every investment bank is different. But most of the investment banks (local and bulge-brackets) ask the first 5 and related technical questions and last 2 and process-related questions. You wouldn’t find any competency question in France which is most emphasized in the UK.
To be an ideal candidate for investment banking in France: To be an ideal candidate is tough because there are so many pre-requisites. Most candidates have few of all these pre-requisites –
- University: Each candidate is expected to pass out from a top-tier university. If you’re not from a top-grade university, your chance of making an investment banking careerInvestment Banking CareerAn investment banking personnel is a motivated professional who aims to help their clients reach their financial goals and objectives. The top four investment banking careers are - Analyst, Associate, Vice president, Managing director. in a top-notch investment bank is almost bleak. Moreover, you need to have a Master’s degree; only a Bachelor degree will not cut. And there are few specializations you can choose – finance, audit, banking, engineering, business, etc.
- Language: Each candidate has to acquire professional fluency in French. If you don’t know French, you’re out. Moreover, you also need to know English quite well; otherwise, you won’t be able to handle cross-border deals.
- Gap: After having a Master’s degree, you need to take a year gap to pursue an internship. Most pass-outs who are employed full-time rarely get selected for investment banks in France.
- Off-cycle internship: During the gap, you must do an off-cycle internship for 6-12 months. It can be an audit internship or you can do your internship in M&A advisory. The idea is to translate your experience of internship into a full-time opportunity which will be easier for both the candidate and the investment bank.
- Apprenticeships: In Investment Banking in France, there are mixed views of apprenticeships. But many recruiters like candidates who are apprentices. Apprenticeship is working part-time at a company along with pursuing your degree. Many investment banks prefer this sort of candidate, but not all banks go for this kind of candidate.
Culture in Investment Banks in France
Even if from outside, Investment Banking in France looks pretty shinier; but the truth is not so good-looking.
In Investment Banking in France, boutique banks have a reputation of torturing their interns by giving more work and paying less; and at the end of the day, they don’t even offer them a full-time opportunity. But not all banks are like that. So before you ever apply for an internship, you need to be thorough about the particular bank.
The culture of the bank is not that good (as you can expect). You will work long hours and earn a lot less money than investment bankers are paid in Europe and in the US. But at the same time, you have an opportunity to grow because there is no dearth of opportunities in investment banking in France.
But if you’re not a native, you may not be able to adjust to the culture of investment banking in France.
Investment Banking Salaries in France
It may sound bizarre. But your compensation depends a lot on the school you attended before you came into investment banking. If you attended School A and someone went to School B; your salary would be lesser than the other candidate because School B is top-notch and more reputable.
Let’s look at the few data-points to understand the pay-structure of investment banking in France –
From the above data points, it’s clear that the salary structure in French investment banks is quite low. Think about an MD earning around Euro 152,952 per annum. Can you think of it in the US or in the UK? Probably not!
Investment Banking Exit Opportunities in France
In the US and UK, people leave investment banking after 2-3 years and then go to private equity or hedge funds.
However, in Investment Banking in France, things are quite different. There are fewer large-cap private equity and hedge funds. Thus, people don’t take the route. And in France, people don’t get promotions quickly. So, most of them get frustrated after a certain period of time and leave.
After exiting from banking, they mostly start their own business.
What looks golden isn’t actually gold. This rings true for investment banking in France. There are three things that stand out – first, people give inordinate amount of value to your school; second, going through the recruitment process isn’t for the faint-hearted; and lastly, even if you can grow if you stay in investment banking for a long time, most people don’t stick and leave banking to start their own thing.
This has been a guide to Investment Banking in France, their services offered, the recruitment process, their culture, top investment banks in France, salaries and exit opportunities. You may also have a look at the following article for learning more about Investment Banking –