I'm currently a second-year analyst working at a MM IB. I had an interview on Wednesday with a competing investment bank. I think one of my interviewers put me through some sort of ethical / morality test. He started asking some pretty specific questions about some of my deals, asked for the closing multiple on one, and asking me how we priced a certain deal (i.e. what fee we charged the client). I divulged both the multiple on the deal he was asking about and the fee we charged.
How big of an issue is it? Will I get dinged, or do you think some people just are curious and want to hear how other banks do things?
Sounds like pure curiosity to me. I wouldn't sweat it.
Edit: here's a better answer for you.
If your suspicions are right, and it was an ethical awareness question (it probably wasn't), you got it half wrong. In a hypothetical world, he shouldn't know what his competition charges, and you just revealed competitive info.
If he asked for any other reason (curiosity, to test your knowledge/attentiveness, etc.), then you are fine. Everyone knows what their competition charges in the real world, because they find out indirectly (from lawyers, from the pitch process, etc.).
Revealing the closing multiple on a deal is completely fine, either way. That's info he could find out from various subscription sources.
ThanVanBurenBoyz - It was a private deal. We didn't release the multiple in the press release. My bank and the PEG that purchased the company are the only ones who knew.
Edmundo Braverman - Does it make a difference that I know this MD is highly religious?
Overall, I'm trying not to freak out about this situation, but you just NEVER know. Some people make the biggest deal out of stuff like this. Some people have a strong moral compass.
One last question: one each of the deals that I listed on my resume, I listed the revenue and EBITDA for each. Each of these deals are for private companies, so these data points are not public. I assume this is pretty standard operating procedure as it pertains to deal-related resumes. Is that right? I gave him the multiple, so he was able to figure out the value of the transaction. On one hand, it IS confidential information. On the other hand, it's not like he can take that information and really DO anything with it (i.e. It's not like I told him that Coca-Cola was about to report a big quarterly loss, and he should short the stock TODAY if he wanted to make some $$$).
I would appreciate any additional feedback you can provide. I really hope that I do NOT get dinged for this. Otherwise, I'm very qualified and I meshed very well with all the people.
It's likely that the deal info is still obtainable, especially considering a PE firm was the counter party. The PitchBook Private Equity Deals Database has plenty of non-public deal information.
As for your second question, it is fine and normal to list revenue. Not as common to list EBITDA, but it's good to know when your deal experience comes up in interviews. And, again, those data points are more public than you think. You can get revenue information from plenty of places (D&B, RefUSA, etc.).
Edit: Each one of the deals that I listed on my resume...
Here's a question that I think will help clarify what I'm getting at: Do you think any MD would put a qualified candidate through the ethical test to try to ding him?
Seems like an inappropriate question to ask. This is a gray area in my opinion, but what do you think? If I got a call from a PEG asking for the multiple on a deal, I would, OF COURSE, not disclose the information.
It wasn't an ethical test.
If what he asked was wrong of him to ask, he wouldn't ding you on ethics because if he was ethical enough to do so he wouldn't want to know things he shouldn't.
Then again he could be a hypocrite.
Yeah I wouldn't put EBITDA or name the companies either, in case you're doing that too.
I'm putting revenue, EBITDA and the deal name for any closed engagements. I'm putting just revenue and EBITDA (not the name of the company...just the project name) for current engagements.
Bump. Not sure how to write these things so they get more responses. Can anyone else offer any insight? Did I cross the line?
Bump. Not sure how to write these things so they get more responses. Can anyone else offer any insight? Did I cross the line?
Bump...
Seems like a pretty grave mistake on your part to divulge that kind of information - you've given the firm an unfair competitive edge
Always good to see people with real-world knowledge taking the time to calm the nerves of candidates.
lol. Awww yeah
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