Building a Book of Clients at a MM Shop
Guess this is mainly geared at VP+ but interested to hear anyone that has had success building their client base at a middle market or less reputable name brand firm. I am currently at a MM and as I think about long-term career aspects, there are a lot of things I like about where I am (great culture, good compensation and fee structure etc.). However, I’ve always thought it would be very hard to build a book of clients given the brand and lack of reputation our bank has. Also can’t just rely on the name like some others can at BB. I have a few analyst friends that have left for either PE or corporate dev, and presumably they would become clients I can call on in the future, but that seems pretty limited. How do others go about expanding that roster?
How did your VPs, Directors and MDs build their book from your group? The ones that didn't lateral in
One MD is not great, one is a prior BB and basically carried over his clients and credentials, one is in-grown and has worked on some really big deals, which has credentialized him in a few niches.. but not sure how he landed those first few whales
bump interest as well
How do you feel about free work? Know people who have had success doing free buysides for smaller platforms. Eventually when the platform sells, they get the mandate and keep the relationship with management.
Goes without saying but best to do this with an emerging industry that's also fragmented.
Bump interested
Right up my alley. As you rightly point out, competing with the big banks is not very viable. Very competitive, lots of effort, low probability. Tried that when I first started building my book and got smoked. Sure you'll win here and there, but effort just doesn't match the outcome. You end up short changing on fees, doing a lot of free work and ultimately getting scraps.
The best way I've found is to figure out what your platform is good at and leverage that differentiation to win. Mine for example, is top notch in a particular sector coverage and a specific subset of complex situations a lot of companies find themselves in. Those are the opportunities I exclusively focus on - low volume, but very high probability.
Once you give good advice, clients will come back, even when its outside that scope. I get a shit ton of "what do you think" inbounds from old clients on anything from a fund taking a position in the name to ideas other firms pitch. The balance of my book is names that my senior guys don't want to spend time on unless there is something to do.
I get the most flow from lawyers, old clients and directors (lot of them sit on multiple boards). Hit or miss with corp dev people, some are just filtering deals and don't really have sway. Industry conferences are also interesting but again, hit or miss. Good for intel usually.
There are certain principles I operate with, never discounting on fees (they only value you if you value yourself), being comfortable saying no to lucrative but low probability opportunities among them. I'm also very proactive and high touch with clients, lots of calls, lots of ideas and discussions vs. waiting for a situation or opportunity to bake and reacting.
It's stressful but really fun. There are dry quarters but the highs are really high and I quite enjoy getting creative to differentiate and the eat what you kill aspect.
Hey, soon-to-be VP at a boutique here...thanks for the helpful comment. If I may, a few questions:
1) How did you develop that kind of rapport with lawyers, clients, etc.? Did it start when you were an associate? Even as a senior associate now, I don't often get the opportunity to present or interact with the clients. Sure, I attend dinners, drinks, etc. and strike up good conversations, but I struggle to ever get to the follow-up. What types of things are you conversing with these parties about?
2) How do you find the time to constantly be pitching ideas and doing calls? Are you just working insane hours? It feels like I'm in perpetual information overload mode because I'm managing between so many different projects. I barely have time to catch up on the news each day. (I'm 1 of 2 associates at my firm...and also staffer...and also run training...and also manage a few other internal things) Do you have any routines or strategies for idea generation?
3) Does your firm just allow you to reach out to these people to discuss your own ideas, or do you have to get approval from directors / MDs / etc.?
4) Any social tips? I'm very socially awkward unfortunately...
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