Friday, November 24, 2006
You sent him the presentation at 4am, just when you sent it to the printers, who got it done by 6am - just in time to head with the books to your flat, shower and head to the airport. Your eyes begin to twitch as the effect of the third cup of extra strong black coffee of the morning begins to wane. You feel that (too good to be true) feeling as you ease back in the leather chair and begin to drift to sleep. Ah, bliss.
Your slumber is interrupted by Dirk, who leans over to your chair and taps you on the shoulder.
"Zhet ish a wery goot book you have prepared. Very nish chartsh. But you sheem to have a problem witsh your email. I only resheived it early thish morning. You musht get IT to fix it when you get back to the offish."
No shit sherlock. You don't say I've got a problem. Thee reason you got the email at four AM is because you sent it to him at four AM. Schmuck. What planet does this guy live on?
Ok. He means well, but come on. What third tier commercial bank did the firm pick this guy out of? Does he really not know how i-banking works? You look at him trying to spot clues giving away his lower position in the food chain even though he is an MD. You look for the usual giveaways. Shoes - buffed and finely made. No joy there. Hands. Clean, well manicured and never carried anything heavier than a ten page pitchnook. Tie. Perfectly matching his suit. Hermes. No joy here. Shirt. Crisp, tailored, cufflinks and no pocket. He even has the extra taste to not have those ridiculously tacky monograms all the nouveau riche bankers pride themselves on. Also, cufflinks are hand made and tasteful. No luck there. Everything about this hit smells like money. Old money at it. He does not behave like a rodeo from Texas wearing a Hermes tie and good suit. This guy is actually more impressive than Rupert. For one thing, he doesn't wear socks with holes. Granted, he speaks funny, but then again, so does Rupert.
You have a brief moment of panic as you see this non i-banker exhibiting all the attributes of a BSD and then some. Are you in the wrong job? Should you begin speaking with a funny accent and ask to be relocated to Amsterdam? You seem relieved to notice that the panic quickly subsides and is replaced by the peaceful lull of sleep, as you sink into the leather chair.
The CEO walks in his army of cronies. Shit. Shitty shitty shit. Sleep will have to wait. You know that you need to be on standby to bail Rupert out when he inevitably fucks up presenting. You cheer yourself up by the fact that you really see indispensable to the firm, whilst learning from some of the best minds in the business.
Thursday, November 16, 2006
"So what's the big deal with all nighters anyway. Why are you whining all the time. I pulled one once and ok, the next day i was a little tired and had to go to bed at 6PM but then it was fine."
Exactly. Once being the key word here. Who the fuck are they to lecture me on all nighters, you think to yourself.
The reasom why you are afforded the luxury of replaying these frustrating conversations in your head is the 3AM switchoff. What is it? Once you start ritualistically going to bed at 5Am and coming to work at 9 (AM and the same day mate), your body isn't very happy. Your eyes start to see double, your hair starts to fall out and turn gray, and the only part of your anatomy that seems to be having a good time is your stomach, which baloons out of your suit pants (even after you adjust them at the waist for maximum leeway). Anyway. 3AM, and you need powernap. if you're really hardcore, you fuck the nap and go out for a smoke or three. It is on your second cigarette, with Rob and an associate called Frank that you lose it.
"Fuckedy, fuck fuck fuck fuck"
You blurt out as you start swirling around in front of the reception, like a madman trying to do a Singing in the Rain act.
"Why me, why the fuck does it have to always happen to me"
"And my model. A little reff* here, a little reff there a lotta reffetty fucking reff every fucking where"
"Sign the fucking line they said. Sign the fucking dotted fucking line they said. The world is your oyster they said"
"Well I'm fucking alergic to fucking oysters"
"I'm alergic to fucking clients"
"I'm alergic to fucking MDs"
"And i'm particulary alergic to wiseass fucking dipshit associates who cant tell their ass from their fucking elbow and cant count for fucking diddley squat and have the fucking nerve to fucking tell me what the fuck I'm fucking meant to do"
"Fucking thir tier recriuted asshole. What the fuck kind of headhunter did we hire to get a pice of shit like that. One fucking thing is for sure. I'd give good money to get the best headhunter in the city and find him another job."
You takle a puff at your cigarette.
"And even that won't fly, cause there aint a headhuntef good enough to get that piece of shit a job even in a fourth tier continental commercial bank"
Final puff, toss the bud, and back to work.
*Reff, in short, is when your excel model gets fucked and takes you with it.
Tuesday, November 14, 2006
Someone offers you an analyst role after a shitty year at a big bank. These so called saviours promise you better hours, better pay, better learning experience and no associates to deal with. Yeay! You think this is great; You are finally getting recognition for your own abilities. You won’t be getting a shitty review from your associate because they suffer from small penis syndrome. You finally get to show the world what a superstar analyst you really are with more sleep AND gain direct financial lessons from the big guns.
1. Better hours = no work to go around. NO WORK
ie no deal… ie CV looks like crap... ie you feel stupid because this is something you cannot bullshit your way out of – i-bankers are the gods of that and you cannot meander your way around this. You are stuck.
2. Learning experience = getting creative on how you should fill in your spare time after you visit lakelandslimited.com for anodised pots and pans, because you have already spent money on other household bullshit you don’t need, but realise you do need after surfing the net for endless hours
3. No associate = You suddenly realise how much you miss them. Because when the shit flies and the sun fails to rise, there is no one between you, the superstar analyst, and the big gun MDs (we will deal with these big guns later on). You get shot. You become the scapegoat when the tiny printing and binding machine doesn’t work in this small place. You get blamed when models don’t run properly or in good time because there is no Datastream to hook you up with proper numbers which saves you time from running to Bloomberg every 5 minutes. You also don’t have the wonderful printing team on the 10th floor to help you put together 50 presentations that are 100 pages long (you work in a one floor building now). You also start to get used to feeling like a small mosquito that everyone is trying to kill. You get used to being bullied and taken apart for not knowing something that an associate should know. Didn’t these big guns (oops they look like the BSDs you used to work with now!) realise that they are hiring an analyst and not a young freaking Rupert McMuppet who went to Excel Summer School in Muppet Land!!! This happens on a daily basis, so after a while you feel that you should re-enrol to kindergarten to justify your position here
Remember I said ‘direct financial lessons’?
First thing, some of these guys can’t work Excel, let alone know how to use a mouse. Second, they can’t count for shit. Third, their ideas are mocked by outsiders anyway, so why risk being Krusty the clown on Wall Street?
3.1 No associate is also good = You see these big guns for the real people that they are. You stop revering the word ‘MD’. You realise quickly what it feels like to be a loser working in a loser environment because you get to go to meetings and learn how to keep a straight face when clients laugh at your BSDs’ ideas and clucks sympathetically because the 100 page presentation isn’t worth the work (Christ, you realise you are stuck with them and don’t have a million other MDs in the bank to work with now). At this very moment, you realise your relationship with any associate is like being in a marriage. Cant live without the other, can live without the other
4. Bonus time comes. You get screwed because the team has done so badly. The main BSD shies away in his corner office because he promised you deals when you joined and several months down the line, fails to deliver. You feel like taking all the presentations you have worked your own ass on, placing stacks of them on his floor and lighting them on fire. Oh yeah, people quit the next day
5. Shit. Your friends are now gone. Your cv is in a mess. You are severely tempted to call your HR rep at your previous place for your old job.
6. Morale? It’s the same shit everywhere.
Monday, November 13, 2006
Its the last measure the firm has introduced to ensure that summer interns are in fact competent individuals rather than buddies and cronies of other sorts. Who better to pick to do the selection than some chappie whose own position isn't secure yet. The cynic in you says that this is the best way to hey your mates into the business, but you want the job. You want it bad. You wanna be that master of the universe.
A pile of CVs was dropped off at your desk by HR in the morning. Your final test (a piece of information you have access to courtesy of Rob) is to screen the applications and select a shortlist of appropriate candidates for first round interviews. You do that to a standard representative of the firm and the job is yours.
You thing hard. You out yourself in the shoes of the firm. How would they approach this. And who better to out yourself in the shoes of than Rupert McMuppet. Thinking long and hard, going over combinations and permutations, realising that you want to go and hit the pub, you have your answer! Just as if Rupert had done it himself. You take the too five CVs and dump the rest in the bin.
"What did you do that for?" Rupert asks, having come up behind you out of the blue.
You are the look of approval in his eyes. You know you have done the right thing. Now all he wants is the right explanation and the job is yours!
"Those that ended up in the bin are unlucky. And I do not believe this is a firm for unlucky people"
Rupert nods in approval. You made it.
Tuesday, November 07, 2006
You remember filing out numerous application forms riddled with cryptic questions like "!What draws you to the investment banking industry?" and "what is the most challenging thing you have ever done?".
What did draw you to i-banking, you ask yourself? Was it the flash suits, fitted and monogrammed shirts and custom made shoes? Was it the prospect of becoming a master of the universe, with a personal net worth to match? Was it the need to fill that gap in your ego because your parents didn't show you enough attention by money and fame in the form of your deal on the front page of the Financial Times? Whatever it was, it definitely was not the "insatiable desire to be at the forefront if the financial worls and your ever inversing desire to excel". I mean come on - does that even mean anything. You remember thinking just that, but writing dowm the cliche answer anyway, hoping you would be enlightened as to its meaning once you were within those majestic golden gates of investment banking nirvana. No such luck buddy.
Why did you rally want to join an i-bank. "yeah, why the fuck?" you ask yourself as the speakephone goes silent. Afte a few seconds of peaceful silence, the yankee on the other end of the line calls your name "you got that London?"
You panic for a few moments. You don't have a clue what he's on about. Shit. Shit shit. You think about what Rob would do right now.
"London here. We couldn't make out what was said. The line is breaking up at our end. Please could you repeat that?"
Quick thinking. You pay yourself on the back, impressed that Rob's ability to fire bullshit left right and center has rubbed off on you.
Maybe that's why you wanted to become an i-banker. To learn how to bullshit. Forget about it. After alll, you got into a business you knew precious little about. You bullshitted your way through Rupert McMuppet! No way. You had it in you all along.
So why did you want to become an i-banker?
Ralising that its about time you paid some attention, you brush away the question of why you wanted to get here, and start focusing on becoming a master of the universe.
Monday, November 06, 2006
Like a lightning bolt, the rules of posturing flash in front of your eyes, and you reply that you don’t but if Rupert requires it, you will reschedule prior commitments to accommodate him.
It’s set. Mr. up-and-coming-on-his-way-to-becoming-a-BSD has not only mastered the art of posturing, but will also be having lunch with Rupert McMuppet on Wednesday.
The childish excitement at the fact that you have officially become Rupert’s boy makes the following two and a half days until Wednesday lunchtime sail by in an instant, and you find yourself sitting across the table from Rupert. He gives you a few minutes of bla bla on the deals you are working for him on, at which point he gets bored and decides to give you an inspiring lecture on the faux and faux pas of investment banking.
Rule No.1 – Never get too attached
You need to show commitment to win the deal. Once it’s yours, move to the next one, and make sure you don’t spend a second more than you have to working for that particular client.
Rule No.2 – The client is always right
The i-banker is not there to get things done – that’s what the lawyer does. The i-banker is not there to negotiate – that’s what management does. The i-banker is not there to think strategy – that’s what the client pays management consultant for. The i-banker is not there to provide financing – that’s what the relationship bank is there for. The i-banker is not there to provide contacts with potential acquisition targets, because the management already knows that they want to do before calling in the i-banker. So what exactly does the i-banker get paid to do? Simple – massage the client’s ego (and back up their ridiculous ideas) with 200 page presentations that only a moron would look beyond the cover page of.
Rule No.3 – Exclusivity
As per rule No.2, the banker adds a lot of value top a client. A good banker will massage so well, that a client will dread the banker being hired by their competition on a deal. As a result, the good banker will often be hired alongside another (competent) adviser, out of shear fear on the client’s part that the i-banker’s services in question may go to the competition. It is this excellence at what a banker does that has led to what is known in the industry as co-advisory (more than one –banking firm advising a single client).
Rule No.4 – Choosing the right horse
I-bankers are very much like the punters at the races. They pick horses (clients) and bet that they will win a particular deal. Just like the races, more than one punter can bet on a single horse. Unlike the races, however, if a horse wins, an i-bankers fees will not be split between the numerous i-banks advising. Each bank will get their full fee and will get league table credit for 100% of the deal value (see rule no.5).
Rule No.5 – League tables
In banking, big is always beautiful. This, however, often breaks down when it comes to fees. I-bankers will often make very little money on big deals for the sheer pleasure of being seen as the sole ass-kisser or joint ass-kisser (aka. ego masseuse). They will often make more in fees on a far smaller deal (where what they chare is much less exposed to public scrutiny, and they will need greater monetary compensation for the fact that they are not kissing ass in the limelight).
Rule No.6 –The magic is in the makeup
As you know, this forms the foundation of posturing. It is also of paramount in the work a banker does. It is a well known trade secret that i-banking is about form rather than substance and that a presentation that looks good will beat one that actually says something any day. I-banks are often asked to present themselves in a “beauty parade” – a common occurrence where a prospective client compares which bank has the best dressed bankers, the sexiest looking books and whose books make the loudest thud (the greatest amount of pages x the thickest paper and covers) when dropped on a table. The winning institution gets an advisory mandate.
Rupert decides that he has had enough of these pearls of wisdom, and asks for the bill. You wonder why people say there is no such thing as a free lunch.
Friday, November 03, 2006
From: Moran, Seth (IBD)
Sent: 27 October 2006 16:07
To: Moncrieff, Michael (IBD)
Cc: McDermott, Mary (IBD)
Subject: Presentation for Monday
I just spoke to Mary who said you have some capacity to help me with a short follow-on pesentation on Project Magnificent. I specifically asked for you as I know the type of work you deliver and this is one of those babies where we are so close to a deal that we cannot let it slip away from us.
As you are already familiar with the company and previous work we did for them. I have spent quite some time whilst on holiday thinking about what we need to do for Monday, and below is a list of pages I need you to create.
Table of contents
Introduction – I will draft this.
Selected creds – doctor the league tables so we are No. 1 in equity, debt and M&A. I know this is hard so I don’t care how you do it. We need to be No.1.
Industry Snapshot – update the page we used last time with the benchmarking matrix superimposed on the attractiveness/interest matrix using a bubble chart. Try to also squeeze in there the correlation graph Charlie came up showing the relationship between size and profitability (his answer though is wrong I think) – there should be a much stronger correlation – check this and change it so that correlation is greater than 80% - I don’t care how you do it.
Share price graph with volume over the last 12 months, with industry and FTSE100 indexed to the start in the background, and annotated key events on the seidebars.
Equity research views page with price target / research house / analyst / date histogram. Also call equities and get investor sentiment feedback and put it in. Be selective here and only include positives.
Summary capitalization page – from share price to firm value. Also show implied EV:EBITDA multiples for 2006, 2007 and 2008. Use average IBES EBITDA estimates. Also show Implied P:Es for 2006, 2007 and 2008, again using IBES estimates.
Pull a list of precedent transactions and show them in a colourful bubble chart. We need the elected multiple to be about 8x LTM EBITDA, so work your way back from there when selecting which transactions to show.
Do a simple DCF analysis and show the implied DCF valuation. Show a page on key DCF assumptions. Run the DCF on a pre and post synergies basis. Show also the valuation difference if you use a 1% perpetuity growth or exit EBITDA approach. If it is not too much trouble, I would like to see both 5 and 10 year DCFs before deciding how to present this.
Run a simple LBO analysis. One page on the key assumptions. Entry multiple = exit multiple. Debt at 9x LTM EBITDA, recap after 2 years. Try to get debt pricing from capital markets before they leave for the weekend today – you may need to do this quickly as it’s 4PM already. I want to see the LBO on an OpCo:PropCo structure and a standard sale and leaseback structure, as well as the standard leveraged acquisition. It would also be interesting to see whether a REIT structure would fly for this. Don’t spend too much time on this. I don’t want you to be here
Prepare a page outlining which sponsors have invested in the industry before and hold portfolio companies in this industry.
Have a section on Bolton acquisitions. With the following slides:
Accretion / dilution analysis based on 100% cash, 75% cash, 50% cash, 25% cash and 100% stock. Show each analysis on the basis of 2005A 2006, 1007 and 2008 projected financials.
Illustrate the impact on the DCF of the bolt-on acquisition. In a page. Do a sensitivity table for the structure used (100% cash, 75% cash, 50% cash, 25% cash and 100% stock).
Do the same for the (LBO 100% cash, 75% cash, 50% cash, 25% cash and 100% stock)
Next section is our understanding of the business:
Prepare three once page case-studies based on the most appropriate precedent transactions you will find. Each case study should show analysis of strategic rationale, financial impact and iplied multiples and stock market commentary.
Socrecard benchmarking different options: how much debt to use, to do bolt-ons, which LBO structure to use, etc. I want moons/half moons and ticks and crosses alongside the commentary.
Conclusion – I will draft this.
Thanks for your help with this and call me when you have a solid draft.
Have a good weekend.
Thursday, November 02, 2006
Your mellow train of thought is interrupted by the cab driver.
"You boys always stay up so late. How on Earth do you do it?"
Nooo. Just your luck to end up with a talker. "I do it by sleeping in the cab you dumbass, instead of talking to you! How do you think I do it ?!?" You feel like a master of the universe for a second as you picture yourself saying that to the cabbie, only to decide against it. After all, its his cab and you need to hey home. Getting thrown out would be most counterproductive in achieving that goal. You decide to ignore the driver and pretend you are asleep, hoping he will fall for it.
No such luck. He keeps on talking.
"I don't understand why you boys do these crazy hours. See, if you take my job, I work my own hours. I am my own boss. And guess what I make. Just guess. I bet you that I make more than you do and I am my own man, working less than half the hours you do."
You smile politely.
If you get one more freaking cabbie lecture you on how you shold cash in your high flyer miles and upgrade to driving sorry assholes like you around town at the most ungodly hours of the morning, you will seriously not be able to restrain yourself.
You smile politely.
You pretend to be thinking about the words he has just spoken with a newfound sobriety in an attempt to shake him off. You try as hard as you can to appear to be rejoycing in the image of your i-banker mates when you break the news to them that after three months at the firm you have chosen to leave to pursue other opportunities. Whilst you are most grateful to the exceptional individuals you have had the honour to work with, it is time for you to say adieu for you have decided to grab the bull by its horns and take your future into your own hands. The markets are booming, and it is not difficult to see that fromk the armies of bankers leaving their offices at crazy hours of the morning. You have thus decided to set up your own business and capitalise on the current market environment. Having identified a lucrative and underexploited business opportunity, you have decided to join the ranks of black cab drivers (who are far less numerous than i-bankers and thus must be far more exclusive a club). Also, judging from the crazy waiting times in the taxi ranks at the office of late, one cannot help but remark that waiting times have gotten longer and longer, and following the rules of posturing, which you have learnt so much about, it he who is more important that is waited on, so you will be taking a step up on the ladder of corporate success.
Your daydream (or nightdream - no pun intended) is interrupted by a sharp turn into Beauchamp Place. You look at the cab driver, and realise that what started as a mockery of this presumptuous chap, has turned into a real option in a matter of seconds. The fact that he can drive like a complte arse and you cannot do anything about it goes to show your respective places in the food chain. You ask him how old he is out of curiosity.
"48, going on 49 in October" he replies.
You take a look at him and he does not look a day older than 31. You then realize that the only 30-something year olds are bankers, and banker years are just like men bragging about their conquests - to get to the truth, take whatever they say and divide by 2. You do the maths in your head, taking his age 49, divide by 2 and get 24.5, and it all makes sense finally. This 49 year old cabbie is only about 24.5 i-banker years old, and he looks it!
Mental note. Add leaving email on to do list when you get back to the office.
Wednesday, November 01, 2006
10% of being a BSD (Big Swinging Dick) is knowing what you are doing. This is by no means an absolute requisite, as even if you have no clue as to what you are doing (like many BSD’s), the remaining 90% of your skill-set will kick in to overcompensate. The other 90% of being a BSD is posturing. It’s simple: if you present yourself as a BSD and keep up the show, you will be perceived to be a BSD. A simple example.
Rupert interviews you and acts like a BSD. You conclude he is a BSD. You tell your intern buddies that he’s a BSD. They tell their analysts that this Rupert guy is a major BSD (interns like to exaggerate). The analysts start telling their associates about this BSD in M&A called Rupert. The associates are always keen to get on the good side of important people (the “ass” in associate in not there by chance – it’s in fact part of the job description – kissing ass is what they do) so they go out of their way to treat Rupert (should they ever meet him) like the BSD he is rumoured to be. The VPs see everyone crawling around Rupert, and here’s where it gets interesting. Most VPs are promoted associates, and whilst you can take the ass out of the associate, you can never separate someone who’s been an associate from the ass. The rare few who question the “Rupert is a BSD” rumours and try to test this for themselves are in for a surprise. The Ruperts of the world are very well aware of the existence of these dangerous independent thinking VPs, who will usually try to come up with a smartass challenge to a point Rupert is making (usually via email, copying half the bank in an attempt to uncover the fact that Rupert is a dumbass). This will usually be done at around 6PM a day before the meeting, in an attempt to give Rupert as little time as possible to manoeuvre himself out of the situation.
This VPs, my friends, has sown the seeds for a group all-nighter, also known in the business as a clusterfuck. Rupert will have every associate, analyst and intern work through the night ion every possible combination and permutation of the pieces making up the matter at hand, to be able to see every possible scenario in the morning, before the meeting. If what the smartass VP mentioned does crop up (Scenario 1), he will staff his army of followers on finding ways of discrediting the VPs assumptions (i-bankers are very good at discrediting assumptions). If the scenario doesn’t crop up (Scenario 2), Rupert can comfortable claim that the VP does not know what he’s talking about. In either case, Rupert will reply to the VPs comment (reply to all) after the meeting and regardless of whether it’s Scenario 1 or Scenario 2 that takes place, will make the VP look like a complete muppet.
Rupert is not really a BSD.
Rupert postures as a BSD.
Rupert becomes a BSD.
Tuesday, October 31, 2006
Rob Tucker, an analyst 3 and well knows superstar of his class walks casually by your desk, stops in front of your screen, takes a quick peek and says:
“Modelling, eh? How’s it going?”
“I’m so stressed” you reply. “I’ve got to do like all the comps, precedent transactions and a full blown DCF analysis for this MD in New York M&A and then he wants me to use the valuation I get to figure out what is the lowest price his private equity client can pay and still get the deal. Shit, I’m fuckin’ stressed. I’m on my second redbull and damn. I can’t talk now. Gotta work man!”
“Chill little dude. When’s your deadline?”
“Like, tomorrow morning New York time! There is no way I can make it if I don’t work straight through the night and into tomorrow morning! Aaaargh!!!”
Rob motions for you to stand up, which you reluctantly but obediently do, and sits on your machine. He asks you to run to Starbucks and get him a black coffee and a packet of cigarettes and call him on his mobile when you’re standing outside the main entrance. Reluctantly, you go to Starbucks.
Having called Rob once in front of the entrance, you see him coming out. You give him the coffee as he motions for you to give his a cigarette. He lights up and begins walking casually. You follow, annoyed at the way this asshole is wasting your precious modelling time and making you buy him coffee and smokes, and then wastes your time while he has his coffee and smokes, when the clock is ticking on Changie’s valuation!
“Chill little dude. You’ll be fine, you’ll see.”
The smoke coming out of the corners of his mouth makes him look like a Chinese dragon as he says.
“We really shouldn’t be smoking this shit. If you knew the kind of crap they stuff into these smokes, you would never smoke again.”
Rob worked on a tobacco deal, and knew all there was to know about tobacco. He also took no shame in demonstrating this knowledge. Come to think of it, he took no shame in anything. You first got to know Rob as you were leaving the office at 3AM one morning, and a voice behind a mountain of smoke hollered.
“We don’t pay interns to sleep. It’s only thee buddy – whatever happened to face time?”
Your fellow intern buddy explained that that was Rob, the analyst he was staffed with, who let him go home early that night and offered to wrap up his share of the work. Wow! “What a nice guy – let me leave at 3!”.
Rob proceeds to give you advice on how to play office politics, with each sentence being interrupted by him saying hi to someone coming out of the building. How many people does this guy know!?!
You are torn between a sad admiration for how plugged in this kid is and the increasingly uncontrollable desire to strangle him for wasting your precious modelling time.
He finally puts out his cigarette and motions for you to follow him up.
Once you guys make it back upstairs, he sits back down on your machine, checks your email, where a you have an email from a dude in leveraged finance. You glance at the email traffic and here’s how it reads:
From: Cartwright, James (FIN)
To: Moncrieff, Michael (IBD)
Terry and Michael,
We've done the best we could at such short notice. I've had three of my guys running around like headless chickens trying to get this done, but the result is still a little rough and readfy. Still, it should be correct give or take US$5m. We think your sponsor should be able to raise US$150m for Bollocks Industries
Hope this is ok.
T: +44 20 7641 2791
F: +44 20 7641 2777
>>From: Moncrieff, Michael (IBD)
>>Sent: 31 October 2006 15:49
>>To: Cartwright, James (FIN)
>>Chang here. My analyst needs the debt capacity for Bollocks Industries for a meeting with a >>sponsor ASAP. I'm waiting on you by his machine. I expect a number in 15.
The bastard emailed the co-head of LevFin pretending to be Terry Chang from YOUR MACHINE! Shit! You panic, wanting to beat the crap out of this arrogant shit sitting on your machine, only to realise that he’s just saved you six hours of benchmarking analysis that will anyhow be ripped to shreds in a day’s time. So what if his methods are a little unconventional, right? Shit! He can get you fired! Arrrrrgh! You don’t wanna be the dude that got fired before actually getting hired. As you continue freaking out, Rob looks back at you and calls.
“Your analysis is done little buddy. All you need to do is send this to graphics to make a few nice slides and pack your shit, coz we’re going for a few beers to celebrate.”
You look at Rob in amazement. He has finally gone mad! Pulling a prank on the LevFin co-head is one thing, but you still have midnight oil to burn on the rest of the valuation. As if he just read your thoughts, rob points to the screen and says.
“Don’t worry little buddy. It’s all done, and I’ve even made little comments for you in the spreadsheet, so you can freshen up on how we cheated Changy tomorrow morning. And now, it’s beer time.”
You take a quick look at the magic solution to your all-nighter problems that seems to have materialized on your screen, before you send it to graphics as instructed. Tomorrow morning, you’ll have the slides Changy wants way before he gets up in New York and you will rock.
You pick up your stuff and head to the pub with Rob. You begin to understand why he’s a superstar. Not because he is so much better than anyone else alive. Far from it, it’s just that he’s a tad less stupid than the rest of the crowd, and smart enough to have learnt that in i-banking, form beats substance. Every time.
Monday, October 30, 2006
You have been asked to review Gianfranco, an associate you have been working with very extensively on a merger the past few weeks, who is also the most incompetent and lazy individual you have met in your life. You sit looking puzzled at the assessment form, scratching your head as to how you can come up with anything even remotely warranting a positive comment from your experience of working with Gianfranco.
“What are his key strengths (name five)? Note any areas for development:”
Key strengths? Like finding any strengths wasn’t enough of a challenge, you want me to find the key ones?!? Areas for development – p-leeeeease! You can list everything under the sun and then some and you wouldn’t even be close. Start from the fact that he cannot write (and to a large extent speak in) English if his life depended on it. He can’t do numbers (which can be a strength because he wouldn’t be able to spot a fuckup in your models ever), he dresses like a Sicilian mafioso and uses more cooking oil to slick back his greasy long hair that all the kebab shops in London do in a year. What more can you say than this individual simply sucks?!?
You look up to your screen, and hey presto, not even five minutes since HR has informed you that you and Gianfranco will be reviewing each other, you have an email from Gianfranco in your inbox.
“Ciao buddy. You wanna go an have a coffee? I buy, ok”
You reply saying sure and five minutes later, the two of you are sitting in Azzurro, the Italian café round the corner with two espressos in front of you. After no more than the bare minimum needed to vaguely resemble a polite conversation opener from Gianfranco (not that he’s being rude on purpose, but the dumb shit can’t speak any damn English), he cuts to the chase.
“So, e, I ‘a see ‘a dat ‘a you an me are ‘a gonna’ do’a the 360 degree, no?”
For a moment, you aren’t sure if he’s referring to the 360 review process or trying to proposition you! Admittedly, the greasy hair, half unbuttoned shirt, and sleazy look he constantly has about him don’t help here, but you decide to give him the benefit of the doubt on the back of the fact that he is consistently sleazy (this decision being reached with a rather hefty amount of hope that you are right on this one).
“Yeah, so, eh, ‘a I ‘a explain ‘a ‘ow ‘a this ‘a thing ‘a work, ok?”
“You ‘a want an offer, no? Ok, so, I a’ ‘elp you and ‘a write ’a you a good review, ok. So, an ‘a you, ‘a you ‘a ‘elp ‘a me too, no?”
Before you have time to catch your breath at this highly inappropriate proposition, he pre-empts an answer.
“Ok. Super – duper, e’. Allora, now ‘a we ‘a enjoy ‘de espresso. No more ‘a talk ‘a da work.”
Back at your desk, you get back to work. In no less than half an hour, you complete Gianfranco’s review and submit the following to HR.
“What are his key strengths (name five)? Note any areas for development:”
Gianfranco is an excellent banker, and an individual I have learnt a great deal from over the past few weeks. I have had the pleasure to learn from him and observe how the work he does wins the respect and confidence of clients and senior bankers alike. He is diligent and knowledgeable in the fundamentals of valuation. He strives for perfection and is an excellent communicator. His ability to clearly and concisely make complicated points understood is unrivalled and I am certain that this characteristic will make his an even better banker in the future. Whilst an individual could always be said to have an opportunity to develop, it would be most unfair to point out any areas for development in Gianfranco’s case, as he exceeds the expects in every aspect of investment banking. In everything he does, he takes on the responsibility (and delivers the results) that would be expected for a banker at VP level or above. He is a truly exemplary individual and I am proud to have the pleasure to learn from and work with him.
It’s the weekend, and by some stroke of luck, you have managed to get your Sunday afternoon free. Nobody’s called you and no emails popped up on your blackberry for a full three hours (you actually called IT and got them to make sure that everything was ok with the company server and that all that important email traffic from your associate wasn’t getting clogged up somewhere between his blackberry and yours only to find that everything was a-ok). You are a free man for the evening. After making a few calls to your intern buddies, only to find out that they are stuck at the office, you sit on your couch and stare at the TV. You switch to Bloomberg out of sheer guilt – even though your presence is obviously not required at the office, you can make productive use of your time by keeping up to speed with what’s going on in the markets. No luck here either. Bloomberg is doing a show on how traders spend their bonuses. Flash cars, helicopters and lots of blingedy-bling-bling-bling.
Shit. What are you going to do? You’ve been an intern for a week and you don’t know how to productively use all this spare time. After surfing channels in search of something to stimulate your financially minded braincells, you decide that the TV is not the solution. You decide that the best way to serve the greater i-banking good is to use this time to build your network. You dial a few numbers and get a group of fellow interns to meet for a few drinks at the Eclipse on Walton Street. The dude from Lemming Brothers actually had the nerve to suggest meeting at his (upmarket) corner pub instead – a suggestion which was quickly shot down as no self respecting i-banker can be seen in a pub! Your two other buddies from Moron Stanley beat you to the gun on that one, leaving no doubt that Eclipse was the place to be seen.
You have a shower, gel back your hair in true American Psycho style, put on a crisp starched Polo shirt, beige Polo chinos, brown Church’s laceups, and a light blue Polo jumper (with a perfectly colour co-ordinated soft green polo player) and you’re good to go. You strap your Swiss Army watch to your wrist and wipe the drool off your face as you imagine the way everyone’s jaws will drop when you replace it with your very own Patek Philippe. You are ready to go. You walk outside, hail a cab for the three and a half minute journey to Eclipse and walk in to find the banker boys at a cushy table and a drink waiting for you.
There’s the Moron Stanley IB boys, the Italian from Lemming Brothers fixed income and his Lemming flatmate. The flatmate looks completely harmless. He’s wearing the standard Polo dominated outfit and thick rimmed glasses. He comes across as the rocket scientist that every graduating class has a specimen of. A truly odd species, who has traded in his chequered short sleeved shirt and calculator holster for a pair of miu miu pants, Prada loafers and a Polo shirt and jumper. Nonetheless, you can’t imagine him harming a fly. You can picture him diligently tapping at a discounted cash flow model, trying to make right the $0.0001 by which the balance sheet is of in 2015. Your image is shattered as you pick up a fragment of the conversation, where the Lemming flatmate, with steam almost coming out of his ears says ”…so then I told my associate to fuck off!”, after which he almost downs the remaining half of his Long Island Iced Tea. You slip back into your thoughts and go over what this harmless looking creature is living through. A person who could not harm a fly, flapping about how he told a superior to fuck off. One glance and you wouldn’t have imagined that he ever even had the nerve to complain about anything, and here he is shootin’ his shotgun like this was his daddy’s ranch in Texas. You realize that you are not all that different. You think about this for a second and conclude that you “used to be a nice guy, and now you are an i-banker”.
Saturday, October 28, 2006
Your slide looks something like this.
For a brief moment, you step back, take your investment banking hat off and take a fresh look at the slide. You can hear the voice of your mentor saying “remember that our clients aren’t bankers and you must always put yourself in their shoes whenever you present to them. See the pitch the way they would see it.” You decide to put your client hat on and take a fresh look at the slide.
You put your i-banker hat on again and pack up the books and think you yourself: “Heh, aint no way these Company A guys are going to see through this. If they were so smart, they’d be i-bankers.”
Friday, October 27, 2006
The analysts were parting in the 12th floor jail,
The cleaning staff were there and they began to wail,
The print room folks were jumpin’ and the joint began to swing,
You should’ve heard those knocked out banking monkeys sing.
Lets pitch, everybody, lets pitch
Everybody in IBD
Pitch so Rupert can get rich.
Associate 2 said to analyst 3,
You’re the cutest banker chick I ever did see,
I sure would be delighted with your company,
Come on and do this mega pitchbook with me.
Lets pitch, everybody, lets pitch
Everybody in IBD
Pitch so Rupert can get rich.
The summer intern was a sittin’ like a block of stone,
Modelling on his keyboard in his cubicle alone,
His associate threw his presentation marked in red,
‘N yelled boy if it don’t balance you gonna wish you were dead!
Lets pitch, everybody, lets pitch
Everybody in IBD
Pitch so Rupert can get rich.
The balance sheet was off and the intern started to cry,
He tried to trace the problem and on the second try,
The spredsheet started reffing at a quarter to twelve,
He knew it would be an allnighter for this pitch from hell.
Lets pitch, everybody, lets pitch
Everybody in IBD
Pitch so Rupert can get rich.
Ok. It's your first week on the job and it so totally rocks. You get to hang out with some of the best people in the industry, and the firm is so good, that they make these good times last well into the night! On your first day, you went home at 2AM, and there plenty of investment banking megabrains that enjoyed each other’s company so much, that they stayed even longer! Not only do you hang out with such fantastic people, who shape the face of the financial markets with what they do on a daily basis, but the firm also provides you with free food each night, to make this fun filled time even more pleasurable. At 7PM on the first night, your whole floor gets together and you order some Chinese takeaway. WoW! And the whole office sits around a few desks, from Analyst to Director and has deeply profound conversations about the business, colleagues, competitors and the like. How much does this rock! They're all sitting around talking about the financial markets, with you, a day into the job intern, being part to conversations loaded with so much confidential information! How lucky are you to be an investment banker. One of the junior bankers (an analyst 2, how cool) attempts to give you some advice. After telling you how to do this and not to do that, he stresses that by no means should you willingly get in the way of Rupert McMuppet! "Whatever you do, if you see him down the hall, go to the water cooler. If you see him coming to your desk, hide under it. You do not, by any means, want to work for Rupert McMuppet. You just don't!" You cannot understand what he's on about. Rupert is a great guy. He interviewed you. Granted, a bit strange, quirky dress sense, funny accent and all that but a decent guy no? You dismiss the advice whilst politely nodding. What the hell does this doochebag know. He's only a 2nd year. He's not gonna last. If he doesn't like Rupert, he wasn't made to be a master of the universe. You go back to your cubicle, a 2x2 metre box in a remote corner of the floor, where you pick up your mini combo analysis that Rupert actually asked you to do. hehe. If that muppet 2nd year knew that you were already Rupert's boy he'd eat his heart out. "Eat my dust sucker". The mini combo aint looking good. Earlier in the day, your mentor explained to you that the mini combo is one of an i-banker's best friends. It's a banker's way of justifying anything to the nmanagement of a company who are meant to protect the interests of its shareholders. The particular combo you are doing, shows that if Company A (Rupert is advising company A) buys Company B, the shareholders of Company A are worse off. That is, the'ye better off just sitting on Company A. The beauty of the mini combo is, thought, that even though a deal is shit, you can make it look good, by using debt to pay for the company you buy. Yes, you guessed it - OTM. Other People's Money! It's like if you wanna buy your 107th Hermes tie (the new one with the little clouds that are nothing like anything they have come up with before), but you don't wanna cough up the £80. See, bad deal. But if an i-banker comes up to you and says "look dude, you just cough up £20, and get payday loans for the remaining £60" it's a lot sweeter. Except, it's even better than that. When you're the management of the company, it's not you who gets into debt, it's the company. So, if things turn to shit, you bail and they lose. If all works out, you're the hero. See? It's a win, win situation. that’s what i-banking is all about. The only problem with the mini combo you're doing, is that Company A (Rupert's client) is like 20 times smaller than Company B, and no matter how much freaking debt you use, the fuckin' thing won't work. Shit! You can't go back to Rupert and tell him his idea sucks! He’s an MD and a BSD! He's the man and he thinks it rocks. You've gotta make it work man, make it work. What if you don't pay any fees for the deal. Ok, yeah, that makes it better. And, and what if your debt is really cheap, yeah, yeah better as well. And what if the price you offer for Company B is a lowball, aha, this is getting there. Aha, and what if you can get some funky accountants to help you pay less tax, aha, there you go, this baby is starting to fly. Aha, and then what if your company's earnings are say 10% higher each year. Wow, this really works now. You are the man! Rupert is gonna love this. You've just shown that his deal is a slam dunk if you can avoid tax, pay nothing for acquiring Company B, double your earnings at no cost, pay no interest and fund all of the acquisition with debt. Its 2AM and time to go home. It feels good to be in the driving seat of the financial world.
It's your first day at the firm and you're feeling so damn good about yourself. Damn right man, you're an investment banker now. Master of the universe. Big swinging dick. King of the capital markets. You'll be able to have conversations where when asked about what line of work you're in, you reply in sheer American Psycho "muders & executions". The world is your oyster and your heart is beating way too fast to read the health warning. That's for losers anyway. Let the dude in GIR read the fuckin' health warning... hehe. Health warnings are for wimps, not masters of the universe.
You give it a week. Ten days tops, before very single MD will be begging for your advice. You feel like a kid before Christmas as you walk triumphantly into the firm's London headquarters. You can almost hear the Christmas carols in your head.
"Twas the nigh before banking, and the markets were still
waiting for the intern who will make the big kill,
he'll advise on disposals and sponoffs and such,
he'll even get a bonus coz they'll love him so much.
his models will roll and his pitchbooks will rock,
boy all the MDs will be in for a shock,
he'll get jumped to VP just a week in the ranks,
and his name will be feard by the other i-banks"
You open your eyes and absorb the grand reception of the firm's European headquarters. Green marble left right and centre, tall ceilings, a long reception desk to which you start walking triumphantly. As you walk the long stretch of floor between the entrance and the marble, you can feel the beat of the heels of your shoes against the marble floor. It's almost like a song you've heard many many times before. The closer you get to the reception desk, the more clear it becomes, and there it is, just as you are about to reach it, you look around and you know it. It could be the firm's theme song. The sterile smell of freshness, the beat of your soles, the blingy green marble and bang. The christmas songs are replaced by the smooth beat of Jenny from the block.
Almost hitting the reception desk, dazed in bling of "the rocks they got", you come to a stop, ready to grace the firm with your presence. It's the moment they have all been waiting for.
"Can I help you sir?" blurts the receptionist with a smile on her face. "Can she help me?!? WTF?!?" You feel like exploging into a "Don't you know who I am? I am the guy that will be this firm's youngest MD. I will be the guy that will bring in more deals that all the officers combined. I will be" STOP! You realise that she must be new and obviously the fact that she should be expecting the new interns has slipped her mind. Nobody is perfect. You calm down and let her know politely your name, rank and serial number. Your have been welcomed to the world of the individual.
Thursday, October 26, 2006
You sober up from the big milkround event the night before (obviously from the intoxicatingly pleasant conversation of the bankers you met, rather than the plentiful and free flowing alcohol at the Plaza bar, and the afterparty at Po Na Na where you went with your mates after the Plaza, only to bump into a sleazy group of the investment wankers from presentation, who appear to be on the pull). Thinking back, this is your first experience of what investment bankers are like in a non-work social setting. They all rocked up with their silk print ties, cuffed shirts with monogrammed cufflinks (apart from the DCM guy who was wearing a top of the line, but still off the rack pair of mother of pearl beauties from last season’s Dunhill range) and cashmere coats and scarves. You look at them and know they were wearing Acqua di parma, but deep down inside you just know that what they really smelled like was money.
The beat is piercing the dimly lit club and as you swing back a shot of tequila to wipe clean the image of how cool you will be in clubs when you are a hotshot investment banker, all you can see before your eyes is Christian bale with his slicked back hair and dressed to kill buying a drink in American Psycho. You wash down the tequila with a beer and with your baker wannabe buddies, buy a fresh round of tequila and walk over the banker boys. “Hey, you guys are from Goldmen Suck, aren’t you? I was at your presentation. You guys rock so much more than Lemming Brothers!” Slam. One more round of tequilas – they buy – followed by another round of beers, and then tequilas. Damn. You feel on top of the world – not only did you score lunch with Rupert McMuppet (more excited about it than your date with Camilla deBoobieland on Saturday) but you’re also scoring buddy points with the IBD boys (little do you know that your scoring brownie points with these boys is as close as they have been to scoring in any way, shape or form since they joined the firm). Can life get any better?
Shit. You realise you need to quit daydreaming and get ready for your lunch with Rupert. Shit. Shit. Shit shit shit shit. You bounce around your flat and manage to dress yourself in five minutes, tie your tie in the cab and hop off (leaving the puzzled cabbie an extraordinary tip coz hanging out with the bling boys last night really made you feel like da man) and get taken to a table where you are happy to find that Rupert is not there yet.
Rupert arrives before you know it, wearing a double breasted wide pinstripe suit, pink cutaway collar shirt (mis)matched with a silk print tie in pale green. You try not to stare in amazement at this sartorial combination that after a few deep moment of thought at to its deeper significance, you realise that there is none other than the statement “Fuck you – I’m wearing this because I can. That’s right, I’m such a BSD and I want (feel the need for) everyone to know it.”
Exchanging pleasantries, you realize that Rupert is an old Etonian (not because you are paying attention to what he is saying, or because of the ring he wars on his left finger – this is a more profound, deep realization, stemming from the fact that the ridiculously coloured and definitely faux pas socks he is wearing are in keeping with some long dead tradition of matching one’s socks to one’s tie, and the fact that he speaks of the days before the Americans entered the City with an accent that feels like he has a piping hot potato in his mouth and is trying desperately hard not to burn himself while he speaks). Good, you think to yourself. The little you said so far was in your English accent (a bit of a gamble as the decision to stick with that was based on the little of your conversation – where you were daydreaming – with Rupert you had the night before, that wasn’t wiped away by the 8 tequilas and countless beers you slammed at Po Na Na the night before with the banker boys). Well done. Talk about your English upbringing (you know only too well not to mention the fact that daddy is a Yank). When Rupert asks you about your political views, you remember quickly your interview experience at the Socialist Republic of Cambridge (aka Cambridge University) where you voices a rather conservative political tone (which is why you are now reading bullshit here instead). Cautiously, you fire back a well rehearsed answer that pigeonholes you as a business friendly, tax hating, globalisation loving conservative. Kaching. You just know that you fit the bill by now. You’ve hit the nail right on the head. Now all you need is to ace those silly motivation questions and you’re through!
Wednesday, October 25, 2006
You're 20 years old and studying for a business studies (aka bullshit studies) degree on a day like any other on campus, with overcast skies, pouring rain and the odd lecture during the day, except the circus is in town today. It's the start of the milkrounds, the recruiting season for the investment banks, where armies of London based bankers make their way out of town, dressed to impress and guns a'blazin, firing more than 100 pieces of bullshit a minute (bpm is the industry norm, and 120 is the world record).
You're in the banquet room of the Plaza hotel, surrounded by the London suits, sipping on beers and wine, huddled around signs with flash corporate logos, below which you read "ECM","DCM","IB","FICC","GIR"...and you're just thinking "WTF - I just wanna get a job with them and get my suit done at the same tailor coz it looks sooooooo good". Sunndenly, you get cornered by one of the half-drunk sleazy chaps from GIR (equity research) and think to yourself "dude, not only does your breath stink, but you're wearing a off the rack four button suit, your shoes are fit for a stag night in Newcastle and you work for a department that sucks more than the infamous equity sales in Dallas". Unfortunately for you, the GIR dude can't read your mind (or the look of desparation on your face) and gives you a limp handshake and asks "So, why do you want to work for GIR?". You fight the urge to resopond candidly and explain why you do not see yourself as a loser and actually wanna be one of the BSDs (big swinging dicks) in the investment banking division, so you politely ask him if he wants another drink (phew...that's why you will be a cut-throat banker...thinking on your feet...give the baby some milt and it aint gonna cry no more...oh how you will put that sharp brain of yours to use when you become an (drool) investment banker! Your coworkers will stankd up in silence every morning you walk onto your floor, managing directors will queue in front of your office asking for advice on how to defend their client against a fantastic hostile offer they have just received, and you will walk out of pitches with a standing ovation following you out of the boardroom. Ah, the world will truly be your oyster, when you become one of the few (and eventually the undisputed leader of the) masters of the universe.
Wake up! Bugger. Whilst you were daydreaming, Rupert McMuppet, Managing Director in the investment banking division has been telling you about what a great opportunity becoming an investment banker is, and after a ten minute template spiel on why I-banking is the best thing that could ever happen to you, he is about to stuff your hand with his business card and an invite to lunch the next day. You wake up just in time to catch the eggshell white, thick paper business card with the bank's logo elegantly embossed in an understated rectangle in the top corner, and Rupert's name triumphantly embossed with a glossy black ink finish, below which the letters spelling managing director unmistakably allude to his BSD status. "Holy shit!" you think to yourself. Lunch with Rupert! All that bla bla you gave him about wanting to push the limit of what is achieveable, addign value as part of a team, working with the best people in the business, loving the work, being motivated by the prospect of reading about your deals in the FT...all that crap and he bought it!
As you politely thank Rupert, you swiftly make your way to the bar, as you know whilst there is no such thing as a free lunch, there definitely is such a thing as a free bar at the Plaza.