Energy Investment Banking
Outlook, exits, better industry groups, should I stay in Texas? Non-target in Texas, contemplating what group to start career in. Please help
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What city?
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Did you get your offer? BB? How long was the interview process?
Looks like you got an energy IB offer at WF?
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don’t do energy, don’t do WF Houston
they lost basically their entire analyst/associate bullpen (like 15 people)
Doesn’t Wells give energy specific offers? If so, I don’t think you will be able to network with them during placement day.
Do all your exes live in Texas? If so, get out while you can.
I'm also an incoming IB SA at WF and while I do know what groups I want to be in I have no clue what to say to them.
Would also like to know. Any idea on energy IB outlook in Houston?
Citi laid off a few people within the past 4 months
Houston will struggle to retain talent - most dudes are trying to lateral to other coverage groups with little success
I don't think this is true. Citi Houston hired multiple juniors and still has postings up. There have been a TON of postings over the past 6 or 7 months.
Get out while you can, most folks in Houston want to leave, even seniors (according to HH's).
Wells Houston runs its own recruiting process. You will not be able to convert a platform offer into the Houston office unless you are a diversity candidate
I think there are a lot of reasons to be excited about Houston IB. While it appears the theme of major industry consolidation is winding down (for now), the uncertainty regarding commodity prices, capital structure, new energy etc. mean that existing companies are going to look to their advisors to help them navigate. Roughly speaking in E&P land, the question remains on how to attract generalist investors back to public equities and the dialogue there centers around establishing some mix of fixed and variable dividends (cash vs buybacks?). Elsewhere, co's need to rationalize their portfolios and decide what they can realistically develop economically in the next 10 years - that leads to a lot of A&D and opportunities to pitch lots of strategic alternatives. Another item of note is how these companies look at their capital stack moving forward. We have heard incessantly that 1.0x leverage is the target but that was under the assumption we would stay in mid-cycle commodity price environment. Now if you think prices will stay elevated, wouldn't a lot of companies be over-equitized? My point being is that in an industry that requires a TON of capital that there will always be deals and things to advise on. While the fervor won't reach peak shale-mania, if you get a seat in Houston at a good bank, I think you can expect to see a lot of exciting things.
On top of traditional O&G being exciting, if your group gets the chance to advise on new energy deals, all the better. Personally it makes sense that energy groups in Houston will see a lot of initial new energy deals centered around CCS and other low-tech, high-importance initiatives.
Is the typical comp for Energy PE on pace with other industries?
Also interested
Out of curiosity, what would you consider the "good banks"?
Second this. My group has already started seeing CCS deals and I think that will only continue to improve. O&G isn't sexy but it is still a critical sector that, like you mentioned, requires capital. All the shortages you are seeing around the world have been taking place because I think investors and such have turned away from O&G too soon and there is a capital deficit. I bet that opportunistic investors will start flowing back towards O&G and that requirement to facilitate capital will require IB.
Would also add that with this big shift towards ESG, a lot of the Houston teams have started broadening their mandates outside of just O&G to include "green" deals and renewables. A lot of the work previously done out of NYC has been allocated to some of the Houston people (i.e. CS rebranding to include infrastructure), which is nice to see. I will say that even with the recent commodity pricing environments, I'm reluctant to say M&A and deal activity will pickup. A lot of the E&P and OFS players that were previously serial buyers and drillers have toned down their business - just look at trends with capex as % of cfo recently. For the boutiques, I think they're generally right where they need to be in terms of team size given the large restructuring cycle we saw last year, but bulges may be looking to add back a couple people since I know firms like JPM excessively cut headcount expecting a worse environment.
Any word on base pay increases in Houston?
Raises across banks are in line with NYC.
It is difficult to get out of Houston once you're there - forget getting NYC generalist PE looks, especially from WF. If you have your choice of groups and aren't obsessed with Texas/energy, pick a NY group.
What about NYC infra looks?
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