Why you want to get out of banking and into a family office
So, you want to work your way up in banking? Remember this: a banker is a middleman. A banker benefits when the parties he or she purposely sandwiches himself between decide to do business. Think of your friendly next-door IBD guy as cupid: he gets paid when two individuals kick it off and jump into bed. Is the banker therefore not highly incentivised to dress both parties nicely, light a candle, play sensual music and make sure the mood is just right? In banking, the more matches are made the bigger the bonus at the end of the year. Because of this, the banking animal is ceaselessly matchmaking.
That might sound appealing, but the pressure is enormous. It’s particularly so for the junior bankers who do most of the work that makes senior bankers rich, and who have to juggle transactions wherein a single mistake can be fatal.
I’ve worked in banking and I’ve worked for a family office (FO). There are three things that made the FO significantly more enjoyable for me.
1. In a family office, you'll have a better lifestyle and less stress
The first thing I noticed when I walked into the FO - an English one worth a few billion pounds - was the relaxed atmosphere of the place. Coming from a bank, I was hardwired to work without a moment’s respite, but people would say to me, "Take it easy, this isn't a bank."
The crucial difference was that the FO didn't need to constantly beg clients to do deals in order to collect fees. They already had money - plenty of it. They were hungry for business, but they were also in a position to patiently eye the market for the best opportunities. This creates a completely different starting point from that of a banker, who is given a spear and half a day to catch prey or face being slaughtered.
2. In a family office, you'll see and do more
It's true, at a large investment bank you'll deal with the biggest and most profitable firms in the world. But doing work for those clients is often mind-numbingly boring. You’re one of countless people in the assembly line of the well-oiled banking machine. Also, with regulators closely watching their every move, there's not as much room for creativity in a bank. Unless you consider choosing between two different types of pie charts on a PowerPoint slide a kind of creative bliss.
In a FO, the deals may be smaller but you'll experience more of the whole. You'll witness a steady and colourful stream of investment opportunities coming through your door. Opportunities to invest in assets ranging from luxury yachts, oil and gas companies, social gaming businesses to penthouses, exotic islands and Hollywood films.
At a bank you'll see the same thing day after day with minor differences. day one: Spain's biggest telco company; day two: France's; day three: Italy's; Day four guess what
3. In a family office, you’ll meet very interesting people
My rolodex grew exponentially the moment I joined a FO. From entrepreneurs, hedge fund managers and private equity firm founders to celebrated restauranteurs, eccentric hoteliers, important politicians and famous celebrities, including high-profile Hollywood and Bollywood actors, the people I met on a regular basis would impress most people.
Remember, a strong network serves a dealmaker very well throughout his or her career. In a FO yours will thrive.
The ibanker is a former bulge bracket investment banker who founded a family office-backed investment firm. He has written a guide, Breaking Into Investment Banking: An Unorthodox Approach, for students who want to break into investment banks, private equity firms, hedge funds and other financial institutions. If you use the offer code ‘efinancialcareers’ to buy this guide, you can get a 35% discount.
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