Quit Whining: The Annotated Rant

We asked one anonymous investment banker about the current crisis. He had such strong feelings that we decided to just publish his e-mail. But first we asked him to explain what the hell he was talking about. (The footnotes are his, too.)

"Look, the current situation in the financial markets is what it is. I-bankers are the frontline soldiers of the financial world, and we know this when we enter the business. When all-out war breaks we are going to be the first ones to take a hit. In M&A the bottom line is deal flow. If you aren't doing enough deals you are going to walk in one day and your key card won't work and it will be your own fault because, despite what anyone says, the deals are still out there, they just aren't falling in your lap. I have no sympathy for the MD who can't originate without trimming fee arrangements. I'm sitting here as a junior on call 24 hours a day to execute, so bring it on, and don't think for a second I will accept a bonus reduction on last year, so by all means get rid of the dead-weight jokers wasting my time and money. As far as the juniors who have been losing jobs are concerned, if you can't get an LBO up and running overnight or crank the wheel on a sixty-slide pitch book, then try something in mid-office. The men who have dropped out of our industry in recent months are the men who just can't handle living the dream. To these people my advice would be: accept your limitations and learn a trade; the IB world is not for you."
  • I-bankers/Investment bankers: They're the ones who make money (or, as recent history shows) lose money for the bank.
  • M&A: mergers and acquisitions 
  • Deals: Any transaction that's worth hundreds of millions and for which an investment bank can take a fee (usually a percentage of the total deal)
  • MD: managing director, an often mean and always crazy person
  • Originate without trimming fee arrangements: MDs who are bad at their job will often compensate by cutting fees during negotiations. This trick often slides by their superiors, who are happy to get another deal through the doors, but not their subordinates, who will work the same hours for less money.
  • Junior: An analyst, associate, or sometimes VP in charge of execution
  • Origination vs. execution: Origination is getting your bank the mandate to advise on a transaction. Execution is the work that ensues over the next six to nine months to complete it.
  • LBO: Leveraged buyout, in this case referring to the Excel model that structures it
  • Up and running: A draft version of an Excel model without any structural mistakes
  • Crank the wheel: Get it done
  • Pitch book: A very one-sided valuation/strategic considerations document that a bank puts together to impress a company and put ideas in its executive's heads and thus originate a deal
  • Mid-office: People in the investment bank that deal with "operations" or "internal affairs" but are close enough to the action to think they are important
  • Living the dream: If you have to ask, you wouldn't understand.
Categories: Feature