Goldman Sachs associate discovers perfect IBD exit strategy
Julian Beckh may have nailed the perfect exit from an investment banking division. And no, it doesn't involve joining the buy-side. It doesn't involve joining a technology unicorn. Nor does it involve joining another bank. It involves leaving your associate job at a tier one firm (Goldman Sachs) and becoming the owner and managing director of a small manufacturing company in the interior. Post-IBD, Beckh says this is the best route to the good life. He knows - he's done the research.
"I really enjoyed my time at Goldman Sachs, but I wanted to do something that would allow me to work proactively and to make more of my own decisions," Beckh tells us. "While private equity also is a very interesting field, I was much more attracted by the unconventional but rewarding opportunity of joining a successful and established mid-cap business. This was very obvious to me especially after some discussions with friends that currently work in private equity on the one hand and some others that decided to join a family owned mid-cap business."
If you leave banking to work in PE, Beckh says it's more of the same. You're still working for a deeply hierarchical organization. You're still expected to work incredibly long hours. "In some respect, private equity seems very similar to banking," he says. "It's certainly more entrepreneurial and you get to look at various investment opportunities, but at the same time the work life balance and the way up to a leadership position remains tough."
Similarly, if you leave banking to work for a technology firm, Beckh suggests you're taking a potentially massive and unnecessary risk: "Companies in the digital space are under pressure from the giants like Amazon." Why chase precarious opportunities in the fashionable tech space when you could take a role in a established firm with established clients and a popular tangible product?
This is why Beckh is becoming managing director of Behälter, a company which manufactures industrial tanks.
"I looked at around 10-15 different companies before settling on Behälter KG," he explains. "It’s a leading trading company for stainless steel tanks, agitators and industrial equipment in the German speaking region. It's been around for over 50 years and has been managed by the current CEO and shareholder for the past three decades. His children didn't want to get involved and he was looking for someone that would develop the company for the future."
It probably helps that Beckh is based in Germany. At Goldman, he worked on the Frankfurt-based German coverage team. Behälter is the kind of solid German Mittelstand company that's arguably harder to come across in the British Midlands or the U.S. rust belt. However, Beckh says there are plenty of similar opportunities in Continental Europe. "You have mid-cap companies with succession problems pretty much all over Europe, especially in the German speaking region but also in Italy and France this seems to be clearly the case.“
The way Beckh sees it, he's now in the, "perfect spot." He has freedom to manage his own time and to make his own decisions, and also he has operational responsibility and responsibility as investor. He says entrepreneurial junior bankers should pay more attention to the opportunities on offer in established SMEs: "You have a lot of these mid-cap companies which are leaders in their niche or segment. A lot of them operate in a very stable environments where there's minimal risk of disruption.
"This is something that many more people with a banking background could consider to do," he concludes. "But you obviously need a certain willingness to assume the entrepreneurial risk associated with it.“