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valuation, M&A diligence

I wish to pursue a career in audit or transaction advisory services. Wanted to know if you can give an insight into both departments with regards to the career prospects, work life balance and monetary factors. 




Transaction advisory services can be a pretty broad term, depending on the Firm. Assuming you mean m&a commercial due diligence work and valuation related work.


M&A commercial diligence-  To get into m&a diligence, you'd need to put in 3-4 years in audit, because they usually like people with audit experiences and CPA certifications. People who usually do a stint in commercial due diligence go onto some rather interesting jobs - joining the acquisitions group of different companies, private equity analysts, other specialized valuation companies (duff & phelps, etc). W/ regards to work life balance, it is really unpredictable. You can be in your office doing nothing for weeks but still have to stay in the office in case a deal is in the works and your Firm has been hired. Then when you are on the deal, it can initially be 8:30-5 days crunching numbers, and then when the deal is in full swing (talking to the target, writing reports, deeper analyses), you can end up working as late as 2-3 am for 2 weeks straight, yes, I said 2-3 AM. And the schedule is really unpredictable. You never know when you have to travel, at times just knowing about it a day before or day of. Monetarily, it's 15-20% higher than audit. Another big problem is the lack of job security. If there's a slow down in m&a deals, the Firms will be looking to cut people in that group. Back in '08-'09, when there was zero m&a activity, the m&a group was absolutely massacred, a visceral bloodbath. If you like unpredictability, traveling, meeting the heads of top targets, and working under pressure, you'll like the rush this group offers you.


Valuation - This is more predictable, there's more job security, the pay is good, work-life is not bad. It's tough to get into though, you'd need finance/economics masters degrees/CFAs from top 40 schools to get in usually. Audit clients usually require valuation of different tangible and intangible assets every year - investments, goodwill, companies, real estate, recent financings (stocks and debt, etc), so the group gets some steady business every year. This is in addition to some new deals that the group gets to work on. Given the expertise you gain/ have looking at financial models, your pay is a solid 15-20% above your respective peers in the audit practice.







Comments

Anonymous said…
I spent a few months in M&A at a Big 4 as an intern. I enjoyed the atmosphere and there was always a lot going on. It's deal based work, so you basically come into work every day not knowing when I would go home. I couldn't make any plans ever because I wouldn't know if I had to work. One day it was 4:59 and I was packing up and a senior approached me saying he needed help for a few hours and I ended up staying until midnight. It's that unpredictable.

There is a ton of traveling as well. Depending on what industry you focus on, you can be traveling at least every month.

Overall, the work itself was good, and it's a lot more interesting than audit, but the unpredictability and hours put in just don't justify the payscale. Unless you plan on going to private equity after, it just isn't worth doing.
John said…
yep, definitely not worth it. you can enjoy your business trips and unpredictable work hours.

you need to say goodbye to your personal life though.

this job is for loners
Why not try valuation - it's more predictable, there's more job security, the pay is good, work-life is not bad.
Mary Gooven said…
I use Ideals virtual data room for due diligence. Using of this system gives a possibility to work even at home. In this way you know hot to plan your day. And it really reduce operation time.

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