Citi Houston - Thoughts?

I would love to hear about what you'll have to say about it. How is the culture/exit opps/deal flow?

I know Energy is not doing well right now, but other than that how are all the things mentioned above?

Comments (40)

Apr 30, 2020 - 10:51pm
Incoming cfa level 1 charterholder, what's your opinion? Comment below:

I hear IB analysts get barrels of oil as a bonus, and that most people in that office are crude and refined.

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  • Associate 1 in IB - Cov
Apr 30, 2020 - 11:16pm

Bear in mind the current state of affairs in the oil and gas space - so currently, if you're an E&P banker or have any Upstream exposure, I would say exit Ops are non-existent. In better times, exit ops are as good as any top bank for Houston. You will see a lot of exits into Quantum, First Reserve and the like thereof.

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  • Analyst 1 in IB - Cov
May 1, 2020 - 12:42am

It's really hard to say where O&G will be in the next 3-5 years. While Citi has been a top bank, it's just hard to see how deals can go back to what they were before 2014, beyond the consolidation story. Bigger issue would be exists as mentioned. Someone did analysis of Energy PE historically having an average MOIC of 1.2x, not including the current downturn. With funds already struggling and portco valuations being cut in half in the near term, it's hard to see the number of exit ops existing down the road. Combining poor returns with LP ESG concerns, Energy funds are looking for ways to diversify.

There are analysts in Houston who signed in on-cycle for Summer 2021, who have no idea what state the PE fund they will be joining will be in. Some are questioning if they should try to rerecruit if their fund looks like it's going down hill. Again, hard to say how this will all play out, but my advice is that starting in O&G doesn't provide enough upside to warrant the risk of being pigeonholed in a declining industry over your career.

Again, would say I'm probably being overly cynical coming from a BB without RX deal flow. There is an argument to be made that O&G is cyclical and will come back. This may happen with seesaw pricing after COVID, but with the ramp up of renewables and electrified mobility, it is hard to see how there will be oil production growth in the 2030s.

  • Prospect in IB-M&A
May 1, 2020 - 1:47am

Thank you so much for the insight! I am guessing COVID should definitely lead to some consolidation activity but at the end of the day I agree that the long-term future is up in the air. Who does renewables investment banking? I am guessing banks could include that into Energy banking.

  • Analyst 1 in IB - Cov
May 1, 2020 - 2:03am

There are other threads on this but Renewables is really housed mostly in NY with the more tech side in SF. I would say the structure of commercialized renewables is closer to a power business model with government subsidies than oil and gas. Elements of the solar and wind supply chain are matured with dedicated bankers, so it is not as simple as just flipping O&G to renewables coverage.

A few banks have started making that move toward ESG/Energy Transition groups, but too early to say which are transactional vs. PR. Off the top of my head, I know TPH has a small Energy Tech team that covers O&G specific software, CS came out that their Calgary O&G head is starting ESG coverage (assuming some will spill down to Houston), and GS is developing Energy Tech coverage out of Houston on more of the energy transition growth side. Again, would say all of these have been relatively recent so hard to say where things will be in a few years, but legacy large scale solar/wind projects will be out of NY for the forceable future.

  • Intern in IB - Restr
May 1, 2020 - 12:48am

Historically a really solid group - I never looked there, but I have friends in Texas that have gone on to work there full-time. I also have been in contact with an MD in the group for a while, and he's been a strong mentorship figure. No doubt he'd bat for you if you're an analyst looking to exit. It's a sweatshop at times, but culture has gotten significantly better in the last 3-4 years. That being said, they've definitely been slipping to EVR and TPH, both with strong upstream platforms. No doubt COVID has put a lot of pressure these days, but who knows what it'll be like when you summer.

If it means anything, I heard their incoming summer class is weaker than usual. Whether that being a function of just having a weak junior class or late timeline, I can't tell. But, I don't think this will be a trend. You'll have pretty good exits if you end up going.

  • Prospect in IB-M&A
May 1, 2020 - 1:42am

Yea I think that last year they recruited in August/September but I know at my school the superday is in 2 weeks so I am sure that is because they want to get the best talent.

  • Prospect in IB-M&A
May 1, 2020 - 2:22am

How did you find out...

  • Prospect in IB-M&A
May 1, 2020 - 11:42am

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