Now that the $143bn Kraft Heinz-Unilever mega-deal has already fallen by the wayside, it’s worth noting that Samco Arabia’s huge IPO, which could generate $1bn in fees for investment banks, is underway and is increasingly complex.
J.P. Morgan and Morgan Stanley look set to get lead underwriting roles, and HSBC is set to be involved. But, as lead independent adviser, it’s really Moelis & Co that is pulling all the strings.
The rise of the independent boutique investment bank has been a trend for the past couple of years, but Kenneth Moelis has given some clues as to exactly how small banks keep landing plum deals in a 2008 interview dredged up by Knowledge@Wharton.
It’s all about being a “confidant” believes Moelis. This is hard to become at a large bank. “Investment banking was always an industry where you were the CEO’s partner in his or her strategic plan and what they really wanted to accomplish. [They want] a confidant. It’s hard to maintain that culture in organizations that grow to the size of 25,000, 50,000, 100,000.”
Investment bankers want to give good advice, he said: “[But because they work] in large companies with budgeting and annual bonus cycles, 360 [degree] review processes, and the constant pressure to sell another product to their clients, it becomes a very difficult thing to do.”
Obviously, since 2008 the pressure to perform at large investment bank threatening job cuts, donut bonuses or automation, has only increased. Still, you can always work longer hours.
“I’ve always said that the investment banker who wins is the one who cares the most. … Do you actually care about the outcome? Are you up at two in the morning wondering about the details?,” said Moelis.
Separately, being low key in your career even if you’re successful isn’t always a good thing. Now that Tim Throsby is officially installed as CEO of Barclays’ investment bank, one of the first things he did to over 100 members of his team in London was explain who he is, according to the WSJ.
He loves rugby, has six children and rarely wears a tie. More importantly, Throsby is likely to be working to access more of Barclays’ balance sheet to allow its clients to take more risk – as he did when he was head of equities J.P. Morgan.
This won’t mean pumping more capital into the investment bank, but instead reallocate resources from corporate customers, a U.S. credit-card business and wealth management.
Meanwhile:
35,000 banking jobs will go as a result of Brexit (Financial News)
Insurers are late to the game securing office space after Brexit (Financial Times)
Emigre bankers are heading to Berlin (Financial Times)
Credit Suisse pays its interns the most (Business Insider)
Citi CEO Mike Corbat’s pay is down by 6% to $15.5m (WSJ)
But Bank of America’s Brian Moynihan got $20m – a 25% uplift and his biggest pay day so far (Reuters)
Investment banks are not hiring despite uptick in FICC revenues (Reuters)
“I have seen some in the British press say the deal will be a bloodbath for staff or some kind of slaughter. It won’t” (Financial Times)
Things are looking up for Crispin Odey – his £150k ($186k) chicken house has been given an award (Daily Mail)
Rebel insurance boozers: “Everyone will just ignore it. I can’t see how they’d enforce it, other than by using a breathalyser.”(Financial Times)
Three ex-City workers ran 39 marathons in 30 days. Now they’re launching a running food company (Business Insider)
City workers are spending £10k ($12.5k) to train like an Olympian (Bloomberg)
Contact: pclarke@efinancialcareers.com
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