Investment Banking in France

Updated on April 30, 2024
Article bySayantan Mukhopadhyay
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

Investment Banking in France

Investment banking in France is not like any other country. The recruiting process is different. The culture is not classy, and people work their way up to differ from other countries.

Investment Banks in France

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Three things stand out here – first, people give an excessive 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.

How Does Investment Banking in France Work?

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. Many French investment banks have made their mark, such as BNP Paribas, CACIB, Natixis, etc. Also, few European investment banks have been operating quite successfully in France, such as Santander, BBVA, HSBC, etc. But they all have Paris-based teams.

The focus of the deals here is on middle markets. This is because most investment banks (boutique investment Banks, local, and bulge bracket Investment banks) concentrate on middle-market deals. As a result, 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, which is why the focus of the deals is industry-specific. The investment banks here focus on industrial-related deals, which means you will rarely see any service deals.

What’s quite natural to expect is a large number of vineyard deals. So you would see many investment banks handle this sort of deal. One specialized investment bank that only handles vineyard deals 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.

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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 close 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 sell 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 a secondary buyout sale.
  • Specific acquisition opportunities: When private equity firms see profitable deals, they need a lot of funds. At that time, investment banks in France came 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 access 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, conducting the roadshow, and helping in negotiating the terms of the deals.
  • Advisory to management teams: This is one of the most important services offered by French investment banks. These investment banks help CEOs and management teams take an active role in the whole process (i.e., private equity firms selling a portfolio company). The deal size is around $250 million.

Top Investment Banks in France

Leaders League has surveyed top-notch investment banks in France in the year 2017 based on 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 2017. There are only two investment banks on the list

  • BNP Paribas
  • Deutsche Bank CIB

Excellent: This is the next ring. Under this head, there are many top-notch banks –

  • Bank of America Merrill Lynch
  • Societe Generale
  • Barclays Capital
  • JP Morgan
  • Lazard
  • Morgan Stanley France
  • Rothschild & CIE

Highly Recommended: Under this head, there are a 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 rings –

  • Barber Hauler Capital Advisors
  • Blackstone
  • Bucephale Finance
  • Citigroup Global Markets
  • Messier Maris & Associes
  • Nomura

Recruitment Process

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 about an off-cycle internship before you ever try to get a full-time opportunity. The way to network is to find out your alumni network and try to get through. You can apply at your graduate school and access the intranet, or 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 6 to 12 months, where you would be learning the secrets of the trade. 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 the investment banking firm and its history of recruitment thoroughly.
  • Interviews: You need to go through two kinds of interviews – the 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 difference 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 that number of people during the process. Sometimes, HR matters 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. Also, assessment centers in investment banking in France are not very prevalent in London. 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 five related technical questions and the last two process-related questions. You wouldn’t find any competency questions 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 prerequisites. Most candidates have few of all these prerequisites –

  • 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 career in a top-notch investment bank is almost bleak. Moreover, you need to have a Master’s degree; only a Bachelor’s degree will not be cut. You can choose a few specializations – 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 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: You must do an off-cycle internship for 6-12 months during the gap. It can be an audit internship, or you can do your internship in M&A advisory. The idea is to translate your internship experience into a full-time opportunity that will be easier for both the candidate and the investment bank.
  • Apprenticeships: There are mixed views of apprenticeships in investment banking in France. 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 candidate, but not all banks go for this kind of candidate.

Culture

Even if, from the outside, investment banking in France looks pretty shinier, the truth is not so good-looking.

In investment banking in France, boutique banks have a reputation for torturing their interns by giving them 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 bank’s culture is not that good (as you can expect). So you will work long hours and earn a lot less money than investment bankers in other parts of Europe and the US. But at the same time, you have an opportunity to grow because there is no shortage of opportunities in investment banking in France.

But if you’re not a native, you may not be able to adjust to the investment banking culture in France.

Salary

It may sound bizarre. But your compensation depends a lot on the school you attended before you came into investment banking. So, for example, 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 a few data points to understand the pay structure of investment banking in France –

Investment Banking in France

source: glassdoor.co.in

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 EUR 152,952 per annum. Can you think of it in the US or the UK? Probably not!

Exit Opportunities

People leave investment banking in the US and UK after 2-3 years and then go to private equity or hedge funds.

However, in France, things are quite different. There are fewer large-cap private equity and hedge funds. Thus, people don’t take the route. In France, people don’t get promotions quickly. So, most of them get frustrated after a certain period and leave.

After exiting from banking, they mostly start their own business.

This has been a Guide to Investment Banking in France. Here, we mention the top banks along with the services offered, recruitment process, culture & salary. You may also have a look at the following article for learning more about Investment Banking –