So I was cold-calling a boutique investment bank not too long ago for an (unpaid) internship as a recent graduate. The partner told me he'd hire me if I brought in deals for him. I knew things were bad, but I was a little surprised to be asked that given my limited industry experience. Some of the recent stats that I found on Dealbook aren't encouraging:
Goldman Sachs Cuts a Little Deeper
- Goldman Sachs has reported to lay off 50 people two weeks ago, in addition to 8.5% of its workforce in the last year
- Morgan Stanley reported to lay off 2935 (4.7%) 12 months ending March 31
- Credit Suisse plans to lay off 109 before May
Not surprising, the dollar volume of IPOs are relatively low
- Lowest global IPO activity for the week of June 4 since the week of January 22.
- 44% down year to date
Usually, I have a relentless optimism, but for the prospective monkeys out there, are you a little more pessimistic or are you more like, "Screw the stats, I make my own luck!"? Also, do these stats reflect the sentiment down on Wall Street? And what are some of the more senior's take on it. Please share any advice to put these stats in context.
Wall Street will contract it's cyclical, there are spurts of merger activities and they come in waves. In the 1880s through early 1900s you had trusts and consolidations, the 50s and 60s had conglomerates, the late 70s and early to mid 80s had the LBOs, the late 90s had tech and health and the 2000s mega mergers. The odds are Wall Street will rise again, but this might take years or decades.
That helps. I guess if you can get in when the time's are tough, it'll be more rewarding when it picks up.
On a side note, what he told you gives you a very big picture of what it's like to be a MD at a bank / Pe fund. You gotta pull in deals. No deals = no money. So, with that said, If you can add value there, every bank will be bidding to hire you.
Yes, I absolutely agree. I will keep that in mind. I actually went online to look for mid-market companies for sale.
IPOs are understandably low as many investors have gradually lost more and more confidence in the public equity markets. Just as an example, of you invested $10,000 in an S&P 500 or DJIA mutual fund ten years ago, what would you be left with today? About the same amount. No capital appreciation and a lot of heart-wrenching ups and downs over the years.
Friends I have who work in industry groups doing traditional IB (I.e. NOT S&T or structured products) are plusing up at both the Associate and MD level. From what I hear and see, Wall Street is going back to basics.
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