Work at a large MM bank that operates globally. Seeing M&A activity down 30% to 40% YoY - anyone else seeing this? Particularly slow in Europe, but also seeing almost -25% in the US.
Management team openly said we’re headed into a recession based on their deal activity. Having said that, we’re still having trouble bringing on and retaining talent, so no layoffs are imminent.
| +404 | Evercore Intern Seizure | 62 | 59m |
| +98 | UBS IB Americas has failed, now behind Santander and Stiffel | 27 | 1h |
| +79 | JPM M&A is Gone??? Purely Coverage Banking??? | 41 | 8m |
| +60 | How do I understand vs. just memorizing? | 11 | 4h |
| +48 | Losing my personality in Banking | 9 | 1d |
| +45 | The good and bad with Wells Fargo | 12 | 3h |
| +42 | Associate & Above IB exits | 18 | 6h |
| +35 | Sent my Claude prompt to 200+ Teams chat. MD wants to see me Monday. | 18 | 8h |
| +33 | Incoming IB Analyst: Best Ways to Prepare? | 13 | 3h |
| +31 | Tech to IB Pivot | 20 | 17h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Same. Feels great.
I'm averaging 15 hours a day Monday to Thursday as a VP so my sector hasn't slowed. It's really the worst of both worlds; bonus will be capped because of overall bank performance but we still get worked very hard.
I'm seeing a lot of banks winning mandates now to bring companies to market in the summer or latter half of the year.
Anecdotal, but seems like banks were stretched so thin last year with deal flow that they weren't pitching to renew their pipeline of deals enough.
"BTT" LMAO, you're destined for banking brother
I'm honestly surprised I haven't seen much chatter about the slow banking environment lately. I cover healthcare and to say it's been slow is a huge understatement. IPOs are down something like 85% relative to Q1 of 2021 in terms of total proceeds raised (and correspondingly banking revenue), and follow-ons are a similar story. Several of the IPOs I'm staffed on have been put on hold indefinitely, and given the performance of the sector, with so many companies trading at substantial discounts to cash, I don't see any near-term recovery to deal flow unless the market bounces back substantially (20%+). Granted there has been some M&A activity recently, but the bread and butter of many HC groups is equity capital markets - more than any other industry I am aware of, especially for some of the more prolific MMs like Cowen (whose stock is down >33% YTD).
SPACs are a similar story - I talked with the head of Nasdaq capital markets a couple weeks back and he expects >50% of the currently listed SPACs to liquidate. I honestly think it might be more like 75%+.
I saw a bunch of articles on recent bank earnings, and IB revenue in Q1 is down like 30-50% across the board for the major banks. Given how aggressive the recruiting environment was for banks in 2020-2021 for juniors with building out headcount, the recent pay bumps to junior bankers, and the massive drop in IB revenue, combined with the low probability of SPACs pulling through again to bolster revenue, I wonder if we'll start seeing mass layoffs if the markets don't bounce back in a quarter or two.
E: To clarify, I am talking mostly about life sciences above with respect to deal flow.
I've definitely observed a much stronger bias toward the private capital markets lately.
I feel like prior to the market slump in late 2021 to present, there was a huge acceleration in the capital markets lifecycles of biotech and medtech companies. Ridiculous numbers of very early-stage companies were going public via enormous IPOs within like 24 months of company formation, which was simply unsustainable. The market was so hot that investors were carelessly throwing insane amounts of money at basically anything that came across their desk simply because they wanted to deploy more cash (I was working on a de-SPAC in mid-2021 and PMs at certain major LO funds admitted as much while we were running the PIPE). It has since come back to bite them badly, considering that the average 2021 biotech IPO is down like 50-60% at the moment, and a ton of funds are getting absolutely smoked, with some big name hedge funds down 40%+ as of late 2021.
I will say that although IPOs have seized up, private deals are still getting done at a pretty good clip. I think that it's a much more hospitable environment at the moment, since the major institutional shareholders can basically control the valuations of their portfolio companies, and they're not really getting marked to market on a daily basis like in the public markets. Private valuations have come back down to earth a bit as well though - I know of a few companies that did crossovers in mid 2021 but couldn't get their IPOs done, so now they have this albatross of a valuation hanging around their neck and need to either try to wait the market out or bite the bullet and do a down round, which would have been unheard of in 2020/2021. This has made it a bit more attractive for the funds with dry powder looking for value though.
From the company perspective, they have also been much more willing to stay private recently. The public FOMO is less intense given the current state of the market. We'll see how long they are willing to stay private though before they want liquidity.
My firm has already started layoffs
Which firm
Think folks need to realize that 2021 was an anomaly.
Sure, fees are down compared to 2021, but 2021 was by far the largest investment banking fee pool ever.
2022 is on pace to be a normal year on par with 2018, 2019, etc
time for RX activity to go up
*Houlihan Lokey mfers have entered the chat