So i've seen recent articles or news saying that global/senior MDs head of tech/retail/oil & gas at BB X/Y/Z leaving to boutique A/B/C with team of 4 others etc. etc. several times past 12 months. and these arent like random MDs, talking about global group heads, vice chairmans of BBs (ex barclays) and teams of people leaving
(example here- http://www.marketwatch.com/story/guggenheim-partners-expands-investment… --> Guggenheim expanding retail arm)
My questions are:
1) whats the motivation to leave (ex- like in article above)? pay? more power? less regulation?
2) how much/many clients will they be able to take with them if they go from a BB to a boutique/smaller growing full service bank? will not much change (if not balance sheet related services like underwriting debt)?
3) how easy is it for these BBs to replace these group heads with quality guys internally? (ex- Barclays lost retail M&A head and global retail head/vice chairman and BAML lost global head of retail as well)
4) if big swinging dicks like these are willing to leave BBs, is that a sign that advisory is in the future of elite boutiques/specialized advisory firms? (i can see S&T, underwriting or other balance sheet related services being the bread and butter of BBs, but will advisory slowly go to boutiques?) or is just for reasons like pay, autonomy etc.
note- i apologize if these answers are obvious to some, but im not FT until this summer so i dont know office politics/senior transfers first hand yet.
thanks!
alphas will be compensated well no matter where they go. alphas could give two fucks about working for a bulge bracket, show me the money, bitch
lol true...so are you basically saying top guys/senior bankers get more money (example at guggenheim than they were getting at BAML/Barcap?) or because these boutiques are private they dont get comp in restricted vested stock? more to it than that?
i dont work in finance, but i highly doubt any senior person would make a career move if it didnt pay better unless there was some type of special personal circumstance where they had to take a lesser job or something.
fair enough, good for guggenheim then lol
anyone else...?
Lots of boutiques give the senior partners/industry heads a cut of the P&L they bring in (30% or so), so they end up getting paid much better if they continue to do well at the boutique. You still need to have a good client network. I'm not sure how many clients they will ultimately "take with them", but they're free to pitch all their former clients.
Comments above have focused on the "pull" (e.g., more money, cut of the P&L), but it's worth noting the politics that are likely to be involved at that level so there might be a real or perceived "push" in terms of motivation to leave (e.g. someone else got the promotion vice chairman was angling for, or the writing's on the wall)
Also, here's a good site to watch the IB push & pull: powermovesDOTcapitaliqDOTcom/indexDOTphp/category/sectors/investment-banking/
very good point to notice. thanks for the website as well
This article touches on this discussion at the bottom as well. Lists that BB MDs and partners are leaving commonly now to go to top firms like Lazard, Centerview, Guggenheim, Moelis
brings up example of how MDs at MS get 100% of their bonuses now vested over 3 years, that could be a major reason for why i guess
http://www.reuters.com/article/2013/05/08/guggenheim-hirings-idUSL2N0DP…
MDs Leaving Firms (Originally Posted: 03/11/2010)
You hear a lot about MDs going from firm to firm in the corporate finance side (not PWM). What happens to deals if they are working on something/have a signed engagement with one firm and switch to another? Do they just lose that revenue?
? what? the revenue doesn't go to them fool - it goes to the firm
and often times MDs will take the deal with them
That's what I mean. Basically at any given time they are probably handling multiple transactions. If they are approached by another firm to move over, how have you heard MDs were able to bring over their clients if the clients have an exclusive engagement with another firm, i.e. if you were just starting on a deal with UBS and Morgan Stanley wanted you to move over, obviously they want you for your contacts, etc on future dealas. But how do you get credit for the deals you're currently invovled in/ make sure you clients are taken care of when you leave?
Maybe the better question to ask is what is a transition like for an MD?
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