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M&A work is mostly speculative work (pitching to potential buyers), the more opportunities you find and present properly the more money you make. As a consequen
by cynusx 6y ago
M&A work is mostly speculative work (pitching to potential buyers), the more opportunities you find and present properly the more money you make.
As a consequence, there is an infinite amount of work that can be done and a pool of hungry junior analysts that is willing to do the maximum amount of work they can to promote into the few positions that actually talk to the clients.
When a deal is actually in the works the buyer, the seller and the investment bank want to close it as soon as possible putting all the time pressure on the lawyers and investment bank analysts to finish everything as soon as possible. In this case you need a team that's used to work 100 hours a week to deliver. There's a saying that "time kills all deals".
Adding more analysts is not going to "fix" that periodically the team needs to have no personal life.
It's only a small step to go from this level of commitment 15-25 times per year, to fill up all their remaining time with speculative work that could bring a deal to the table.
The work they do is not specifically high-skill, most university grads can do it and the starting pay is higher then other options so they get ambitious, money-oriented grads willing to churn and burn for a while in the hopes of promoting.
Now let's consider what happens when HR decides to institute normal working hours. Letting them work like normal employees goes directly against your bottom line (less profit, less bonus for the MD's) and come crunch-time if a deal fails because your clients are waiting for a junior analyst to do his work, your clients will +hate+ you and tell everybody.
Personally, I never thought getting into that line of work is worth it but nobody is forcing those analysts to work there. The slavery is entirely voluntary, they can and often do leave for more normal jobs. They are very easily replaced for an equally skilled worker.
Add that investment banks are riddled with zero-empathy psychopaths and you get a perfectly toxic culture that attracts and retains precisely the types of people that are willing to work in and perpetuate such an environment.
- JumpCrisscross 6y ago> come crunch-time if a deal fails because your clients are waiting for a junior analyst to do his work There is a solution to this: a coördinated global team. FX traders manage this just fine. The problem is, at its root, that high finance is insanely competitive across almost every dimension. One of these is the ease with which senior bankers can leave and found a boutique, taking a good share of their clients with them. That limits how much banks can rein in their rainmakers. It also makes bankers protective of their relationships. The former makes it difficult to add staff to teams. The latter adds friction to a banker in New York trusting a colleague in London with their prized relationships. As you say, at least in my time, it was made abundantly clear that if you go into banking, you won't have a life for a few years. After that, you will have a gold star on your resume. It will enable you to leave for a better work-life balance. Or stay for more money.
- sjg007 6y agoSeems ripe for automation and some AI. https://www.investopedia.com/ask/answers/08/typical-ma-experience.asp https://www.investopedia.com/ask/answers/08/typical-ma-exper...
- goatinaboat 6y agoSeems ripe for automation and some AI https://xkcd.com/1831/ https://xkcd.com/1831/
- dan-robertson 6y agoI don’t think this is a matter of getting lots of speculative work. I think the analysts in the survey knew they were getting in for crazy hours during crunch times. The problem is that there are a lot more deals than usual being done this year so there are no longer any non-crunch weeks.
- hogFeast 6y agoThe issue is not anyone alleging that staff are being forced to work there. The issue is: analysts are often told they won't do 100 hours, and that most of these people will leave and do something else which isn't a good outcome for the employer. Adding more analysts does fix it. The amount of work does not increase exponentially as you add more analysts, it is unchanged (that is why they are hiring more people, no-one expected this to be such a big year for capital markets...most places just haven't hired enough). Same amount of work, more analysts, less work per analyst.