Investment Banking Is Broken
This was originally posted on WSO 2/16/19 by user icantdothisanymore, a former IB Analyst turned Entrepreneur.
I just left IB and went entrepreneurship way, so this is a bit of a rant post and a throwaway account, but felt like I need to share.
With all do respect to hard-working individuals out there - investment banking industry is broken and absolutely worthless. The advisory side is the most useless, pathetic and ego-driven things in the business world, over.
The Materials
Where do I start. Creation of those meaningless memorandums, pitchbooks, bake-off presentations, company and industry profiles was the one most laughable thing I have ever done in my work.
Sell-side info memo? Oh, you mean we are putting bunch of bullshit on 50 pages, make it pretty and send around the world to people who either won't look at it or spend 15 sec skimming through? Fuck it, sign me up
The presentations, decks, materials, whatever you call it in M&A are beyond my logical thinking. Why in the name of God would you do a ten-page product overview section with bunch of screenshots and retarded texts, like "seamless login process"? Who reads that? And those pitchbooks? This is a mf joke, which investor even looks at it?
Materials, the thing juniors slave away and spend so much time on - are 99% useless, deleted, not looked at. This is the harsh truth. The only thing that matters from the creation perspective is modelling - advanced operating models are actually useful for the buyer and provide at least SOME value (given all the assumptions are probably bullshit anyways)
Do you know how deals are being made? By talking, by high-level numbers, by synergies, by adding actual value. What value add for the biotech company is the sleazy banker with his stupid industry deck?
The Ego
Everyone has the ego. Interns have ego, cause they work in a big fancy firm. Analysts have ego due to spending nights on meaningless documents and thinking they are big swinging dicks. Associates have ego, cause they think they can manage juniors now, but in reality just kiss their superiors asses. VPs have ego thinking they are almost MDs, while they still work nights. MDs have ego, cause they believe they are financial Gods, but in reality they are kissing clients asses, skipping kids birthday due to another useless video call and lying to everyone around.
The Chaos
It's beyond me why IB is so poorly managed. Literally every single MD I worked with has been a terrible manager. No time management skills. No respect to employees. Zero logical thinking. I know everyone is busy. I know they are doing billion dollar deals and we are just slaving away over Excel and PowerPoint, but for the love of God it's JUST BANKING. I have friends in biotech, field oil, doing business functions in military, government and NOWHERE is as bad as in banking. This is just laughable. Oil engineers can split work and manage time, but two analysts cannot work on the same model? Give me a break.
Now don't get me wrong - IB is needed. They are matchmakers, connecting investors and companies together. But the industry from the inside - is a fucking joke. Better management skills and this would be a 1000% better job than it's now.
Strategic Finance | CFA | CPA
5 年The first part is inaccurate — there is absolutely value in learning how to synthesize a lot of unstructured data and lay it out in a compelling, engaging way. The second two points are largely correct; there is a lot of stuff in the industry that seems archaic and wildly inefficient, particularly regarding culture and how people treat each other...