When I was a junior in college, my ultimate goal was to work in New York. Rather than just work in finance, I wanted specifically to land a role in New York so I could start my career in the epicenter of finance. Intuitively, it felt like the right thing to do.
I ended up working in New York for four years in banking and private equity, but I turned down a number of “objectively better” opportunities on the west coast to do so.
One important realization I learned while observing multiple recruiting cycles is that you can really use geography to your advantage if your sole focus is to maximize your career progression.
I think most people pursuing finance have a modest preference to work in New York. But if you position yourself as someone who wants to specifically work in tech (in which San Francisco is the play) or as someone who wants to work in a specific geography, you can give yourself a huge advantage in the interview room.
Investment Banking Analysts by City
Let’s start by taking a look at the breakdown of investment banking analysts by geography to understand where most of the candidates are located. We’re using the same data set utilized for the investment banking target school analysis (i.e. top bulge brackets and elite boutiques scraped from LinkedIn).
You can see that 70% of all the investment banking analysts in the U.S. are based in New York. That makes sense. Most investment banks are based in New York and it’s inarguably the largest North American center for business.
San Francisco, which is the technology center of the U.S. (and world) has 9% of all U.S. investment banking analysts. The cities of Houston, Chicago and Los Angeles all have 3-4% (with Boston shortly after). So yes, the vast majority of analysts are in New York. In contrast, every other office functions much more as a satellite office.
What’s interesting to note is that from a recruiting perspective, these satellite offices typically recruit from less traditionally prestigious schools and have a much stronger reliance on local geographies. If you’re at a semi-target or non-target, the best use of your energy could potentially be positioning yourself for one of these satellite offices. The overall level of competition is extremely high when targeting New York.
For example, my alma mater (Ivey, from Canada) initially fortified its reputation in finance by consistently targeting opportunities on the West Coast. It’s my observation that there’s generally less competition for those roles.
Geography in Private Equity
All of this really gets magnified when you start thinking about recruiting for private equity.
Below is a table of the largest private equity funds (ranked by AUM), which shows whether each firm has a private equity office on the West Coast and on the East Coast.
All 20 of these firms have offices that practice private equity in New York.
But what is potentially surprising is that 15 out of 20 of these firms also have offices on the West Coast (San Francisco and Bay Area).
At the associate level, class sizes are not going to be that different (or different at all) between the West Coast and East Coast offices. In fact, most mega funds will have class sizes of 4-8 people, which are relatively evenly distributed between offices. You also have firms like TPG and Ares that have much bigger classes out on the West Coast.
The point is that: to be a successful private equity investor in this environment, you need to have some exposure to technology. Technology is one of the most important industries in the world and impacts almost every other industry. The number of private equity friendly business models and opportunities that result from the technology industry is absurd. It’s almost cliché how attractive the B2B SaaS model is for private equity investors due to high retention rates, margins, and overall cash flow profile.
You simply can’t ignore technology if you’re a private equity titan, which is why these firms end up hiring so many people in San Francisco and the Bay Area.
If you're interested in recruiting for one of these private equity titans, check out our Private Equity Recruiting Course, which includes LBO models, headhunter coverage, and mega fund case studies.
From a recruiting perspective, you can really give yourself an advantage if you tell headhunters you specifically want to work in tech. Even if you’re an analyst in New York (or another city). There are only 2-3 West Coast specific headhunters, but there are 10+ East Coast specific headhunters.
When you consider the fact that there are 7x as many investment banking analysts in NY than SF, but a similar amount of private equity jobs, you can see why it can be helpful to use geography to your advantage. Lots of people inadvertently end up moving to the West Coast anyways through the on-cycle recruiting process. Therefore, I think you’d be well served if you craft a deliberate message to headhunters.
West Coast (San Francisco, Bay Area)
Working on the West Coast comes with its own unique characteristics. I’d call out a couple of key ones:
VC, Big Tech compete for talent
One of the biggest reasons why I think recruiting for the West Coast is comparably easier is because there are so many other great jobs there. The competition for talent in the Bay Area is really high. There are amazing VC jobs, growth equity jobs, as well as Big Tech jobs that have a much more survivable work / life balance.
Investment banking class sizes are only so big, so there’s already a limited number of candidates with good finance experience that these firms can compete for.
As we’ve alluded to several times, the West Coast is almost wholly technology-focused (with a modest amount of healthcare). If you want to further your career in tech, there’s a good chance you’ll have to be in the Bay Area at some point.
There is tech in New York, but it tends to be much more hardware- and telecom-focused. A lot of the “cool” software stuff is out on the West Coast.
Many people have to commute
One lifestyle element I think is worth mentioning is how many people commute in the Bay Area. The majority of investing jobs are in “Silicon Valley”, which is 45 minutes to an hour from San Francisco. If you want to live in SF, you’re going to have to drive for a while.
Commuting this long while working tough hours can be extremely challenging, which is why people tend to move into the Valley as they get older.
East Coast (New York)
There are still great reasons to want to develop your career in New York and stay there (even if it might be harder to recruit at the junior level).
More finance competition and opportunities (notably hedge funds)
At the end of the day, there’s still way more overall finance opportunities in New York. When you consider other asset classes like real estate investing, credit, and of course, hedge funds, there’s just way more finance overall in New York. Private equity jobs might be a bit more balanced from a geography standpoint because proximity to target companies matters, but public equity hedge funds are a lot more location agnostic.
Many of the top of investment banking analysts will decide between going to a private equity firm or a hedge fund, which can have big geographic implications.
If you want to go to a traditional hedge fund, quantitative fund, or activist fund, it can be a lot more helpful to be in New York. The lion’s share of these opportunities are in New York. Of course as we’ve mentioned, there’s more competition for these jobs as well.
One of the advantages of being in New York is that you’ll get exposure to a wider cross section of possible industries. If you want to work in consumer, industrials, or stay a generalist, you might find it easier to stay in New York. There’s a greater volume of overall commerce in New York, so there’s a greater diversity of companies to work with.
I find that New York tends to be a slightly grindier city. People associate their personal value quite closely with the prestige and earning power of their job and so you get a lot of workaholic, career-focused people. I personally think that the overall hours worked is going to be slightly higher in a city like New York vs. the satellite offices or the West Coast. It can be a great environment if you want to be surrounded by competitive and driven people, but it is exhausting for some.
All of the other cities have their own personality quirks. We’ll quickly call out the industry focus that each city is well known for:
Houston: Oil and gas
Chicago: Industrials, lots of middle-market PE, quantitative funds
Los Angeles: Media and entertainment
Boston: Proportionally more asset management and hedge fund jobs
Toronto: Diversified industries
Calgary: Oil and gas
Your main takeaway here should be that geography quickly becomes one of the most important factors when recruiting. If you’re having difficulty recruiting or aren’t confident in your resume, you can try seeking out opportunities in less coveted cities. New York is deservedly popular for good reason, but there is a disproportionate amount of focus from candidates on getting jobs solely in New York.