Currently at a boutique and heard most of the technical modeling at MM and BB M&A groups is a joke.Been told most modeling for deals doesn't even hit full 3 statement forecast and pitches rarely even do LBOs.Is the technical side of MM and BBs a facade? Do analysts just spend all day on process updates and diligence?Would be interesting to know the actual technical M&A groups (not RX or other) that do real valuation / bottoms up revenue build etc. where real skill set can be developed.
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No M&A group is going to do bottoms-up models or extreme valuation exercises. It takes way too long and the buyside is doing a more detailed model anyway and just using the sellside model to check. I'd say analysts spend 30-40% of their time in models but the forecasts are run off of research forecast or provided numbers (often with minor updates based on growth %, synergies, etc) and it already takes a huge chunk of time to add in any wrinkles like new debt and how that is paid off, various synergies, equity structures etc
If you are only concerned about technicality, oil and gas modeling is pretty complex - to the point the M&A modeling is usually farmed off to the groups as the M&A teams aren't familiar with the models. But still not a bottoms-up build.
I don't understand the hype over modeling. It's something you learn to do, pick up the skills and know how and move on to bigger and better.
If you want to be a model nerd, like above post said O&G. Will add mining, infra, FIG (banks) to that list and leave it at be careful what you wish for.
doesn't it help significantly with buyside recruiting, like if you don't have any modeling experience but closed a deal since associate was running the model - you're still fucked?
It is yes, it is a skillset that you must have. My point was a career isn't built on modeling chops, especially since I'm sure you've seen on the sell side, it's not super sophisticated and granular. It's one of many things.
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