February Newsletter
Hire Point Recruiting
A staffing firm based on forward-thinking and driven by people.
What's Happening?
Earlier this month, in the small town of East Palestine, Ohio, disaster struck. The town and residents tragically fell victim to a catastrophic train derailment. According to investigators, a wheel bearing failure caused a fire in the undercarriage of a car, setting it ablaze, subsequently derailing 38 train cars. It was seen on fire about 20 miles before the derailment but no preventative measures were taken. Soon, full system failure occurred and carnage ensued. The train cars that derailed happened to be carrying extremely hazardous and reactive chemicals, not conducive to such destruction. Videos and photos of the mangled cars soon swirled the internet, gaining national attention. After four days, a fiery inferno erupted after local officials deemed it necessary to "safely" burn the remaining hazardous chemicals, preventing a reaction that could cause a massive explosion.
In doing so, the town of five thousand were issued an evacuation order from the governor. Three days later, the order was lifted, schools are opened, and life continues as usual. But does it? Within days of the controlled burn, several residents reported foul odors from the burn site, water odors, nausea, body rashes, local wildlife turning up dead, etc. All the while, Environmental Protection Agency (EPA) officials claimed the surrounding area was safe after extensive air monitoring. The EPA says they are now putting all focus on the collection of pooled liquids, removal of contaminated soil, and removal of all rail cars. Additionally, tests retrieved from the town water well was deemed "safe to drink" by the EPA on February 19. And as of the 23rd, an EPA Administrator confirmed the Norfolk Southern company, who owned the rail cars, is solely responsible for the cost of all cleanup initiatives and could be fined up to $70,000 a day. Even though it seems like justice has been served, many residents believe there were serious failures in crisis management. Both failures by the officials and Norfolk Southern in their preventative measures and reactive measures have caused major politicians to become involved in conversations on transportation policy, as well as disaster relief. The sad fact is, this crisis might mean long-lasting environmental and health implications for the surrounding population. Either way, Norfolk Southern is on the hook for a pretty penny.
Crisis Management
Crisis management is something we at Hire Point Recruiting talk about often. Although, we generally are referring to a corporate crises and what implications it could have for both our clients and candidates, the same conversation could be had for East Palestine. Regardless of costly accidents or natural disasters, today's economical climate has been forcing companies to find ways to consolidate. Cutting costs are essential to keep balance sheets looking good for shareholders. As we see often, companies utilize the easy way to cut costs — eliminating human capital. It may not be the nicest way to go about business, but it certainly is affective from an accounting standpoint. Many of our candidates have been victims of layoffs or restructuring. Their careers suddenly thrown off course, derailed, transforming and changing trajectory.
Some companies have brought on new CFOs who restructure top to bottom, changing roles and eliminating others. They would argue layoffs are a necessary part of market cycles, while others will site Apple's Tim Cook taking a $25 million pay cut — eliminating Apple layoffs completely. There is no right or wrong way to deal with situations like these, but it certainly helps to have a resource you can turn to. Just like in East Palestine, a traumatizing event can leave scars. That's why it's our imperative, here at Hire Point Recruiting , to assist professionals in their career journey, whatever it may look like. Whether you have been in the same role for twenty years, recently laid off, wanting to switch careers, or simply need advice — we are here to serve you.
Executive Interview with Ryan Rogers
This month we decided to speak with an Investment Banking professional, Ryan Rogers. Ryan provided fantastic insight on how to get into the investment banking industry, as well as what one might expect working in the industry. We frequently have candidates coming out of Big 4 Audit firms and Corporate Finance that ask how they can transition into ibanking. In this question and answer style interview, we hope that you will find it interesting and informative!
Interview?
What is investment banking? How did you get into it?
Ryan:?For me, it was speaking to my mentors and having them tell me if you ever wanted to end up running your own business, you have to know what makes a good company vs a bad company.?The best way to do that is to have a profession where you advise companies from all different industries with different management teams on how to raise capital.?That is either on the buy-side (acquiring a company) or sell side (selling off your own company) transaction.
How did you get into investment banking??What was your path?
Ryan:?My path was somewhat untraditional.?I interned at Evercore, my junior year summer in their Private Equity Secondaries group.?That's when you're brokering LP interests on the behalf of large pension funds or endowments.?For example, a company has committed $100M to different private equity firms who have made bad investments with their money.?A big thing that was going on in 2015 when I was doing it were European pension funds withdrawing their LP commitments from Russian investments because Putin was misbehaving.
How would someone in Big 4 transition into investment banking?
Ryan:?When working on the buy-side of deals we work with Big 4 Accounting firms’ transaction advisory teams, or TAZ as they call them.?Within that group you are not doing the banking but you are learning how to work within a company’s financial statements, how people on the buy-side would think about adjustments to their earnings.?It develops their excel skills which helps them transition into IB.?I feel like in NY, it’s such a rat race where if you keep you head down you will eventually get to where you want to go, but some people have more roundabout ways to get there.?Most kids, if they want to get into banking bad enough, will get there. A lot of times to their regret, when they are working until 2am every night they burn out.?
Is your job stressful and how are your hours, typically?
Ryan:?With my job we don’t get brought into the deals until they are in the debt financing stage, so it’s not until the deal is in the “red zone” where we come in to close the transaction.?Basically, I take it from the 20-yard like into the endzone. So I typically work 40-50 hours a week compared to people at firms that do the leg work of the deal from the start.?We have equity ownership dues as well.
What is your favorite part of your role? Least favorite?
Ryan:?My favorite part is how every business and deal is different.?You learn about new sectors' dynamics that I never fully appreciated previously.??Also, being in the lower middle market you are seeing these tiny little companies that are family owned and are experiencing capital injection for the first time.?So, they now have the ability to grow into different geographies, offer new services, merge with other bigger companies, and create actual scalable companies that can be impactful in the industries in which they operate.?Our deals are more relationship driven than typical IB deals since we are cold calling smaller private equity firms across the U.S. Although, the current geopolitical climate is directly impacting each of the businesses and our returns.
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My least favorite part is being removed from the decision making, so I can't actually take the wheel and be the CEO. We are a cog in a bigger and mightily powerful machine.?The good thing about that is we are more removed, which helps us be able to cover more ground.
What are you guys preparing for in the market in 2023?
Ryan:?This market isn’t really as impactful to us as we structure things pretty conservatively so we are expecting growth to be stable.?Definitely in larger PE deals that are over levered, where there is rising debt on these businesses, you may see a bit more of a credit crunch.?So they will have cash flow issues more than we will.
What are some qualities you need to be a good investment banker?
Ryan:?I would say attention to detail, which is something I even struggle with today.?You are going to make mistakes which is okay, but you never want to make the same mistake twice.?It's always better to under promise and over deliver than over promise and under deliver.?Don’t bad mouth your boss because you never know who is connected to who.?The natural inclination when things go wrong is to complain but it never gets you anywhere.
What was investment banking like during COVID?
Ryan:?I was close to my analysts via video, we were able to talk about what we were working on and commiserate.?As much as working from home is nice, being back in the office will help people get back to a community, and being around people your age that are all working hard together makes it a lot better.
Anything else you want to add?
Ryan:?Even though you are spending time applying to new roles to try to get into IB, make sure you are doing your current job to the best of your ability as you are going to need those recommendations to get where you want to be.?
Hire Point Recruiting Update
This month we have done some growing! Our new office is fully up and running in Sparta, NJ and we couldn't be more excited to start our growth journey here.
We have recently hired a temporary consultant to assist us with administrative duties. On top of that, we have created an internship program that will accommodate two interns this upcoming summer 2023. Hire Point Recruiting is ready and excited to shape the next generation of accounting and finance talent acquisition professionals! More information to come on our newest members soon.
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