Best Energy Investment Banking Groups?
Saw the TPH vs. Jefferies HOU debate, and was just wondering where the best energy groups are at because I feel like it's a pretty consolidated industry at the top no? In terms of criterion I'd say pay, hours (long at all the top firms it seems), deal flow, exit opps (both TX and NY--would assume different per firm), culture/people, which verticals they're best in, and most technically demanding firms would all be good to have color on.
Edit: Might get shit for asking a question that's been answered on WSO before but figure landscape has probably changed in the recent years.
New York is power. Houston is energy.
there aren’t many coverage teams that cover the inverse in those cities - sometimes a small group to support an MD.
Houston IB scene has been shrinking with DB, BMO and maybe a few others closing their offices (zombie banks that don’t do anything)
What are some other zombie banks?
Bump. Interested to hear about Moelis and Evercore.
Both Evercore and Moelis have fallen off tremendously in the past year
How come? Not a lot of RX work or what?
Both had lights out years during the COVID RX wave but that work didn’t translate into M&A mandates with those companies after markets recovered. They were both impacted by the same trend in energy - there just aren’t enough deals for the number of banks, and once you factor in “feeding the lenders” there is very little left for the boutiques.
At Evercore, Finnie retired which really hurt the upstream practice and his heirs haven’t gotten much done. Pacha and Strong are still good but there hasn’t been much on the midstream side. OFS is now energy transition, which isn’t a real vertical even if banks want to pretend that it is.
Moelis never really had a strong M&A practice in Houston. It’s always been an elite RX shop that has to scrape and grind during M&A season. I don’t think they closed a deal last year.
When oil inevitably crashes again they will both bring in insane fees and give the MDs 3 years of extra leash.
Debatable on the RX cycle… Companies don’t just restructure every couple years, and I think leverage levels are generally lower as companies already restructured themselves to be fine at lower commodity prices in the last crash. Think it’ll be a while til we see another RX wave even when oil goes down.
That bit was more of a joke. Agreed that capital structures are much more sustainable now than prior to either of the last two commodity price crashes
Are you like 24 or something? There were definitely companies that restructured in 2016 and 2020 - plenty of shitcos in oil and gas that will always RX during a downturn
gas E&P companies for sure if Nat gas stays below $2 for another year or 18 months
Bump. Curious to hear about GS JPM EVR BofA C JEF RBC TPH etc
GS - Whale hunters. Good chance of being on whatever mega deal of the year. Have never heard a single positive thing about the culture.
JPM - Great shop, largest lender in the space, extremely toxic and routinely screws over interns. Avoid like the plague, especially entering uncertain economic times. Not worth the risk of snuffing out your finance career before it begins by getting no-offered.
EVR - See above. Still good, but their strongest vertical (midstream) has been slow.
Citi - Elite as recently as last year, arguably were the best all-around bank in Houston. Trauber retired, Laghari left, and CEO Rachel Maddow is overtly hostile to O&G and is pulling back from lending in the space. Still have some good people (e.g. Jameison) but expect them to fall off hard.
Jefferies - Still very good. Probably top in upstream, which has been the most active vertical over the past couple of years. Ralph Eads might be the last remaining "living legend" in the space that still shows up to meetings (Trauber, Osmar, etc. all gone)
TPH - Still kicking, still good in upstream. Good shop and solid culture (for Houston).
RBC - Have always been a solid office but have improved over the past couple of years. Would be surprised if they weren't one of the top RBC offices.
BofA - Office kept alive by capital markets and lending like half+ of the bulges in Houston. Don't do much M&A. Very "meh" office but BofA is still a good brand name for the resume.
Legend
Good post but kinda wild you put Osmar on the same legend tier as Trauber or Eads. Nobody but CS guys think he’s on that tier.
even the older CS guys know Osmar isn’t on the same level as the older CS team before him
+1 and agree with the above. only nuances might be that.....
Citi - "elite as recently as last year" feels a touch strong. They're definitely in the conversation in just about any deal, but not sure they're a head above everyone else. Culture also brutal
MS - while traditionally a bit absent in energy, with Weinberger now in full swing as seen in the OVV deal this week, think they'll be more of a player going forward
Barclays - historically crazy strong based on Lehman foundation, particularly in midstream, but slowly falling off. Nonetheless, they are still able to put together wild financing packages that will continue to win them business
CS - Just about everyone save Tim Perry has run for the door but they've found a way to (sort of) hold things together. Will be interesting to see what UBS does with them in HTX
TD - hot take... feels like they're leaning in of late (but obviously well behind other A&D type shops)
Piper Sandler is active in the space as well. They acquired Simmons and Co (top OFS boutique) and hired a lot of the good senior team from Scotia to boost their E&P capabilities. Simmons was always a sought after boutique in Houston and Scotia was sneaky active in E&P. Unfortunately, 1 + 1 = something less than 2 under the Piper brand. The junior team kind of sucks and the culture (pay), post Piper takeover, is not as good as it used to be.
Opinion on Guggenheim?
How do you think Jefferies's bench will fare after the OG guys/Bowden are gone?
RBC has lots of deal flow
Anyone have insights into HL’s energy team? Heard they been growing massively in Houston
Think massive may be a bit of an overstatement. They've grown a bit and have rounded out the practice, including beefing up A&D, but as far as I can tell they have a few key clients and are content to stay in their lane. They'll do RX and the occasional M&A deal but I don't think they're on track to make a significant run up the league tables
How good are Canadian banks like Scotia, TD, and CIBC?
Oh Lordy here we go….
What was the removed comment?
Sizable exodus from JPM recently to Mizuho etc
Nobody goes to Mizuho by choice. Doubt they offered a solid guarantee or anything
https://financialpost.com/pmn/business-pmn/mizuho-hires-jpmorgans-getz-…
Seems they offered a package to poach them.
Did the JPM guys make mizuho houston stronger?
My title is outdated and I have been out of the banking game for a couple of years but I will give my perspective on the Houston banking scene, which has changed a lot in recent years. A few years back, the top groups (in no particular order) in my opinion were Barclays, CS, Citi, TPH, Evercore and Jefferies. Barclays has fallen off considerably with the retirements of Pipkin and Jacobe. CS has obviously fallen off as well for a myriad of reasons. Evercore hasn’t been as strong in recent years, particularly on the E&P side but maintains a strong midstream practice. Trauber’s retirement plus lack of support from the top are major issues at Citi. TPH solid but no longer what they once were. Maynard in particular still had his initials on a significant amount of fees. Their deal flow has changed but team size hasn’t changed a ton as they still have over 20 MDs and ~10 EDs. Jefferies obviously continues to do well.
Based on more recent deal flow, it seems the most active groups today are (again, in no particular order) JPM, Jefferies and RBC, followed by Goldman elephant hunting large corporate deals. JPM has gotten on a ton of big corporate M&A in recent years (cultural issues notwithstanding), Jefferies is chugging along and RBC has been able to leverage the Richardson Barr side into more corporate M&A, in addition to bread and butter A&D, while also picking up a few MDs opportunistically from other banks. Their deals are listed on the Richardson Barr website so can compare to other banks that list transactions (TPH, Piper, Evercore, Moelis, etc.).
MS, BofA, Barclays, Evercore, TPH, Citi, etc. in next group. Lazard and Moelis mainly pick up RX work when that wave comes. Moelis chases a lot of low probability work, particularly in OFS. Piper is smaller deal size / higher volume but generally seems to be best option for generalist / non-energy exits (Center Oak, Platte River, etc.). Were also impacted by retirements and continued difficult M&A environment for OFS. Houlihan has grabbed some RX and A&D work. UBS trying to do energy transition. Mizuho - who knows with recent JPM pickups. Raymond James not doing much. Scotia seems to have disappeared. Wells Fargo not doing much either. Don’t know enough about PJT to comment. TBD on how Guggenheim fares with recent hires but haven’t gained a ton of traction the last few years.
Agree with this. Not sure how it got monkey shit throw at it.
must be the salty Wells Fargo (A&M guys?) who think they’re at a BB.
Socgen and HSBC?
Agree with most of the comments here so far but wanted to add...
Understand a lot of Citi CHADS left for Guggenheim recently after Trauber retired.
I was at Treebeards and overheard a couple of their junior bankers say "Guggenheim? More like Assenheim!!"
Apparently they loved to call their old employer "Shiti" instead of Citi. Think this is kind of a replacement for that?
Didn't make a lot of sense. Not even clever. But probably safe to say Gugg culture = Old Citi culture.
Idk, I'll probably start saying Assenheim now. Too smooth tbh
"Oh who won that ABS deal?"
"Pretty sure it was Assenheim since nobody else wants those"
"Haha makes sense! Asset backed Security? More like ASSet backed security!"
Jefferies, JPM, Goldman Sachs, TPH and Morgan Stanley are top 5 (see banks that advised OKE / MMP). Evercore and Citi are nowhere near as good.
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