A sponsor may also be considered the lead arranger in a funding deal. When a company chooses to go public it also engages the support of a sponsor or sponsors. Sponsors help guide the company through the initial public offering process IPO and also provide credibility for new investors considering the IPO investment. Leading IPO sponsors are typically investment banks who take a stake in the company as well. For example, Roku was one of the mostly highly publicized IPOs of Underwriting sponsors are also utilized for mutual fund and exchange-traded fund offerings. Benefits plan sponsors are also well known in the investment industry.
Plan sponsors are companies or employers who create a benefit plan for their employees. The plan sponsor can work with various entities to provide a comprehensive benefits plan. Plan sponsor benefits can include a wide range of offerings for employees including retirement savings plans, pension plans, health plans, financial wellness plans and more. Mutual Funds. Your Money. Personal Finance.
Financial Advice. Popular Courses. Login Advisor Login Newsletters. Investing Mutual Funds. What is a Sponsor A sponsor can be a range of providers and entities supporting the goals and objectives of an individual or company. The financial sponsors group is a coverage group. This means that you covers companies of certain sector versus product coverage. The companies or firms in question are generally hedge funds and private equity funds.
The work is generally less technical in nature. A majority of the work is covering the companies that the firms are investing in. Here are some advantages of working in a financial sponsors group.
Great outcomes. Done well.
One, working directly with PE firms hedge funds and portfolio companies. Two, exposure to multiple industries that the client is invested in. Three, exposure to different client investment styles. Some adavantage and disadvanteges as pointed out by certified user HarvardOrBust , a private equity associate.
The following groups are the top ten financial sponsors groups. Sourced from the Thomson and Reuters Global investment Banking Overview published in the first half of A note on interpreting league tables when weighing an offer by certified user 10x Leveraged , an investment banking analyst:.
However, take the league tables with a grain of salt because the standings change frequently year after year. The WSO investment banking interview course is designed by countless professionals with real world experience, tailored to people aspiring to break into the industry. This guide will help you learn how to answer these questions and many, many more.
Investment Banking Interview Course Here. It's a pretty neat position if you don't want to be stuck in one industry -- as you develop relationships with senior bankers in financial sponsors, the senior people tend to specialize in a few industries and if you play your cards right you can get A LOT of exposure to several different clients and bankers within the firm.
To add on to what was said above. The most common product that a financial sponsors group can offer its clients is financing. In addition, at the larger firms you are not only responsible for the sponsor itself, but also any needs of the portfolio company i. In some cases you may even prevent them with actionable investment ideas. Any thoughts on exit ops for those of us in a financial sponsors group? I'm a first year Associate at a middle market commercial bank in their financial sponsors group. My hope is to make a move to any one of the following: Any thoughts or recommendations for how I can make this move?
I'm only 6 months in as a first year associate with a former background as an underwriter in traditional corporate banking. Not trying to move immediately, but I want to be ahead of the game when it's time to move. Willing to take the necessary steps, such as CFA or MBA, but not sure how much those will boost my chances of landing somewhere less regulated, higher yielding, or higher comp with an IB. I was curious about the types of exit opportunities there are in Financial Sponsors. Where do people usually go after their stint? Is there a lot of modeling?
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Learn more. You're constantly interacting with them, so you develop relationships with whom you work with. The magnitude of modeling varies by firm. Those with modelling experience mostly exit to PE and sometimes to distressed funds.
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The answer is that it varies pretty significantly across firms. Analysts from both groups consistently have some of the best PE placements on the street. Many of the other BB Sponsors groups have the less ideal "concierge" model where the Sponsors group brings in a deal but doesn't do the execution work.
Thanks in advance. Silly Dan And to think you don't know what fsg stands for! Financial Sponsors - Still a good group? Originally Posted: Is this still a good group? Will exit opps still be good if you work on only a few deals as an analyst? Much better to be in coverage or lev fin. At my BB, lev fin runs the model, coverage has the relationship with portfolio company, and senior banker in Sponsors has the relationship with Sponsor. The juniors in the group get very little exposure to deals.
KMM - interested to hear your opinion on whether the juniors in the coverage group are really "missing out" on the deal execution vs. Could they fill in the gaps in their knowledge base or execution skillset from internal items? What do you model in Sponsors? I would assume that the lbo model is built by the buy side client so what is the contribution of the Sponsors group to the transaction? They're both great groups that should get you plenty of looks for PE.
I'd talk to people in both, see who you like better. Can't go wrong. Financial Sponsors - Modeling exposure? What type of modeling exposure do you get in Financial Sponsors? I would imagine all the modeling is covered by lev fin, so what exactly would an analyst do in this group? Make a ton of profiles?
Financial Sponsors Group
From my past experience, sponsors did the modeling with boilerplate financing assumptions based on their understand of the company, industry and market and then pulled LevFin in for views on financing. So LevFin would fine tune the financing package to be more realistic. Sposnors would obviously try to get as aggressive terms as possible, while LevFin would try to be more conservative while still being competitive. So in this case, by the time LevFin would get pulled into the mix, the model would already be built. They'd essentially supply the sponsors group with fine tuned capital structure inputs.
In that case, it was all about who owned the relationship. Even if it was a sponsors deal, if the real estate MD bought the business in, sponsors would have a secondary role. In some cases, LevFin plays the role discussed above.
Financial Sponsor Transactions - Weil, Gotshal & Manges LLP
The dynamics and role of your group is definitely something you want to get as much intel as possible in your interviews. Obviously its in their best interests to oversell the importance of the group to attract top candidates, but its upto you to ask the right questions to get a pulse on reality. Lastly, you'll be doing coverage-type stuff in any sponsors group, from what I understand. Whether your driving the deal and the modeling or not, you'll still be monitoring your top clients investment activity, portfolio companies, etc I had several first round interviews w JPM Sponsors.
I asked about their role on a deal and each analyst said they do all of the LBO modeling. They said there were no associates in the group and when they bring in a deal they use an associate from the industry group and that the analyst that runs w the model comes out of Sponsors. You don't do much modeling in most sponsors groups. You take the sellside model or the PE model that they give you and data entry your own assumptions in senior bankers give to you.
Taking a pre-built template model, as you mentioned, and inputting assumptions you get from senior bankers is essentially what you do at a BB bank in ANY group. Once a transaction is live and likely to close, you're doing in depth projections and meeting with management etc Personally, I wouldn't do industry coverage for shit. Product side is where its at. FSG Originally Posted: Do they act as more of relationship bankers? If you know anything about FSG , feel free to give your opinions.
FSG is exactly what it is. There is no product involved, it is an industry coverage group where the industry happens to be private equity. Lev Fin is the product group for underwriting and distributing paper. Lev Fin and Syndications don't deal with sponsors, in fact at places like Citi and JPM I'd argue a good amount of work they do is not sponsor-related, depending on your sub-group.
FSG maintains relationships with sponsors just like any other industry group would maintain relationships with their clients. By that I mean arrange the financing, coordinate the bank groups, underwrite the loans or bonds, go on road shows, and distribute.
Depending on what bank you're at, FSG or Lev Fin analysts could be handling the heavy lifting in the modeling, although I'll argue that most LBO structures without any immediate carve outs, refi's, hybrid products or dividend recaps are simple enough to do for any analyst, anyways. Where the FSG team adds value is the relationship with the sponsor and the knowledge of the specific transaction between acquirer and target. Where Lev Fin brings value is how close they are to the market and knowing what structure and subsequent pricing the market will be willing to take.
Probably 7 times out of 10, FSG is where you want to be, though. Why do you say 7 out of 10 times FSG is where you want to be? I think LBO modeling is cake to begin with, but those kids place very well. Places where you'd probably rather be in Lev Fin: Are these preferences based on modeling experiences or reputation of the group or something else? Can you tell me what you think of Citi FEG? How does it stack up against its competition? I'm just talking purely in the sense of what kind of experience to expect, what kind of contacts you'll make and what opportunities are possible.
I'm not at Citi so I can't say for sure. My friends there say FEG is one of the top 5 for sure. Industrial, TMT , are good Lev fin and FSG are the same grp. Stay away from FSG , this is a pitch group. All the modeling is done by the Lev. Fin team At the end of the day, is there a difference between Lev Fin and Financial Sponsors at a bank that has huge balance sheet capability JPM , etc.
Don't the two groups work hand in hand on most, if not all, deals? FSG will do alot of the work to get the deal mandated lev fin will of course help but FSG drives the process , that means pitching, getting credit approvals, dealing with the sponsor, and running with the model. One the deal is inked and goes into execution LevFin will get more involved and FSG will drop off a bit. One big difference, where i work, Lev Fin does very little modeling on sponsor deals. At least that's how I see it most OMs. How do these groups differentiate themselves at these banks? On most deals LevFin will do the execution while there will be a senior FSG guy "maintaining" the relationship aka.
In summary, do your research. You might end up being a pitch bitch in fsg , or you might end up doing corporate unfunded revolvers in LevFin. So see what each group does at the bank you're interested. Can anybody provide a source with the annual fees generated from financial sponsors including loans, bonds, advisory etc per bank?
Jefferies is 12, wells fargo 13, morgan stanley GE's so high because they just do a ton of really, really small deals, usually not even as lead.
Financial Sponsor Transactions
How was the split between banks and what are the fees currently and expected from sponsors per bank? Financial Sponsors - Bank with best group on the street? Can't go wrong with MS Fin Sponsors. It's the best. PE activity seems to be picking up in recent weeks. Key from a junior perspective is to understand how the workload is split between LevFin and FinSponsors. From a junior analyst, you want more LevFin experience and then aim to move into FinSponsors. Hope everyone is doing well.
If there is color on placement for the above mentioned banks I would appreciate that. So this may be a career move vs. Is it repetitive? Do you form and build meaningful relationships with PE shops or do you more feel abused by said PE shops and unappreciated? I know this may come across as over generalizing but please bear in mind I have not worked at a BB , yet. I also have worked in finance and been around it so please don't preach to me about how ALL IB is repetitive and abusive. How is the good-guy factor? The hours relative to other competitive groups?
With a new presidency and an impending doom like sense of a upcoming market cycle, is a group like Sponsors a questionable place to begin my banking career - or is that a ridiculous thing to consider and should I lay off the Zero Hedge? So here's some general thoughts on Sponsors. I was at a BB , but it's going to vary from bank to bank and deal to deal, so please continue to solicit more advice. A lot of kids I know moved from Sponsors and are at top shops. They want you to grow up big and strong and become a client. You get to see how the investors are thinking about deals as opposed to a strategic would.
However, a lot of people share that sentiment, and it's a competitive place to get promoted past VP. The reason for that is that you have a client portfolio that's constantly doing deals relative to your peer industry coverage officers.