Investment Banking In Houston
Investment Banking in Houston does not focus is not diverse fields; rather emphasizes oil, gas, energy, and natural resources segments. In addition, the only requirement to get into investment banking in Houston is to be ready to stay in Texas.
For one to become an investment banking analyst, it is important to belong to Texas where investment banking services are of different nature, yet useful. There are multiple functions of Investment BankingFunctions Of Investment BankingInvestment banks perform various functions for their clients, including initial public offerings (IPOs), mergers and acquisitions, risk management, equity research, structuring of derivatives, merchant banking, and investment management. that make them the most sought-after financial entities in Houston.
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How Does Investment Banking In Houston Work?
Investment banking in Houston takes care of particular niches and ensures the economy gets the best services and flourishes every day. It is completely different from the investment banking services and opportunities offered in New York both in terms of approach and objectives.
In Houston, the actual focus of investment banking is on the energy industry. Here are the following services that the top investment banks in Houston provide –
- Sell-Side Advisory: This service is relevant for companies selling assets and organizations. Each data set is important, and a thorough understanding of macro and micro elements helps the team bring clarity to the deal.
- Buy-Side Advisory: In the case of buy-sideBuy-side The term "buy-side" refers to entities that advise their clients like individual investors and institutional buyers on investments and securities purchases. Private equity firms, mutual fund companies, life insurance companies, unit trusts, hedge fund companies, and pension fund entities are examples of buy-side firms. advisory, the most important element is acquiring new assets and companies. The investment banking team helps the clients in valuation, tactics for negotiation, and the structure of that particular initiative.
- M&A Advisory: Public M&A advisory is one of the most effective services investment banks in Houston offers. The team chalks out an ideal proposition to crack the deal and help the clients with their expert advice on the energy industry.
- Public Equity & Debt Offering: When the energy companies seek out ways of finding underwritersUnderwritersThe underwriters take the financial risk of their client in return of a financial fee. Market Makers like financial institution and large banks ensure that there is enough amount of liquidity in the market by ensuring that enough trading volume is there., investment banking acts as the best bet. From serving as a ‘led-left’ on public equity offering to having significant knowledge and expertise related to the transactions – investment banks in Houston help their clients in all ways.
List of Top 5 Investment Banks in Houston
Some of the investment banks operating in Houston have been listed below:
- WoodRock & Co
- Pritchard Energy Advisors
- Integrity Advisors, Inc
- M&S Fairway Capital Partners
- GulfStar Group
Let’s discuss them in brief –
- WoodRock & Co – This bank focuses on the emerging and middle-market segment. It’s a private bank and helps clients in regard to capital marketsCapital MarketsA capital market is a place where buyers and sellers interact and trade financial securities such as debentures, stocks, debt instruments, bonds, and derivative instruments such as futures, options, swaps, and exchange-traded funds (ETFs). There are two kinds of markets: primary markets and secondary markets. and corporate development.
- Pritchard Energy Advisors – This is another top-notch investment bank headquartered in Houston, Texas. This is a pure energy service provider bank that works upstream, downstream, midstream, and renewables.
- Integrity Advisors, Inc – This is also another Houston-based investment bank. It was established in 2006. This bank focuses on the middle market business, and it provides services related to corporate finance and investment banking.
- M&S Fairway Capital Partners specializes in corporate finance, capital raising, and transaction management for startups and small businesses.
- GulfStar Group – This is another top-most investment bank headquartered in Houston, Texas. This is one of the best investment banks in the middle-market niche. It provides strategic advice to middle-market clients.
Other than these, the 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. such as Barclays, Citi, Lazard, Evercore, etc., can be mentioned.
The most important thing about the recruitment process in Houston is that you need to live in Texas for a long period. They even provide opportunities to students who don’t have an excellent track record or students who are from lesser-known schools.
One thing that will help you break into the energy finance industry of Houston is internships. If you have multiple internships, you will always be the most preferred candidate of all.
Plus, if you can network harder and get to know most of the people in the industry, job search in the investment banking industry would be easier.
It would help to prepare investment banking interviewInvestment Banking InterviewThe purpose of this Investment Banking Interview Questions and Answers is simply to help you learn about the investment banking interview topics. questions on valuations for upstream companies, various verticals like upstream, downstream, and midstream, updated on recent energy transactions, NAV model, MLP, etc.
If you want to benefit from working harder and partying harder, Houston is not that place. Yes, you would be working as hard as you would do in New York if you’re engaged in investment banking. But in Houston, most of the nightclubs and bars are closed quite early. So when you retire from work for the day, you won’t have a place to hang out.
If you have a family, Houston is a great place. But for single life, Houston wouldn’t be the right place.
In Houston, the compensation of an investment banking professional is quite high but not as high as their peers in New York or San Francisco. Here’s the average compensation of an investment banking in Houston per annum –
If you notice, you will see that the average salary of investment banking in Houston is 11% less than the national average of an investment banker in the US.
Investment Banking Exit Opportunities
In Houston, one of the most significant exit opportunities is private equityPrivate EquityPrivate equity (PE) refers to a financing approach where companies acquire funds from firms or accredited investors instead of stock markets. Investment bankers that exit investment bankingExit Investment BankingAmong the several exit options available to investment bankers are: 1.Private Equity 2.Hedge Funds 3.Strategy Consulting 4.Fin-Tech 5.Advisory for large corporates. go for the private equity domain. Other exit opportunities are joining startups (especially tech startups) or working in the corporate finance industry.
Exit routes also depend very much on the market position. If the market isn’t doing well, the investment bankers don’t get to work on attractive deals. As a result, they don’t seem to get opportunities to grow and reach a higher rung. Due to this, they quit and join a different domain or industry.
This has been a guide to Investment Banking in Houston. Here, we mention a list of top banks and explain their recruitment process, culture, and salary. You may also have a look at the following article for learning more about Investment Banking –