What are typical fees on a per banker basis for BBs in the US?
For example, if you have a team of 10 bankers with a roughly even split of seniors vs juniors how much money are they expected to generate in a year? Is it $2mm per head a fair approximation?
Separately, how much influence does type of revenue (M&A vs CM vs BS) matter in this context?
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Rough estimates, method in other post. Depends on bank.
This chart feels somewhat misleading - using global bankers / global revenue across group of firms that are not exclusively global causes some major fluctuations that are not representative of reality due to the fact US IB activity is far more robust than most any other countries.
ex: $7-10 per MD across gs/jpm/ms is not representative of US activity. Those figures would be quite poor for an average MD (as stated by other commentator below, BB in US generally target ~$20mm per MD across products)
My MM targets $2M revenue per head run-rate. Has some volatility as expected: $3M per head in 2021, $1M per head in 2023. But generally staffing is adjusted so that utilization works out to $2M.
Thank you. This is the type of analysis I was aiming for rather than revenue per MD. Reason I brought it up is my team was given a large revenue target this year ($4m per head), which seemed in excess of what I've seen across my few years in the space.
Assuming this is a boutique that does execution in the same group, $4M per total head seems like very thin staffing. In best case, feels like that implies extremely productive senior bankers with high conversion of pitches to (large) mandates - e.g., relatively de minimis junior time spent on BD. Is your group doing a lot of financings? Those seems to be high fees for relatively few man-hours.
Probably reasonable for the Centerview / Catalysts of the world but seems aggressive otherwise.
What do you think? Good luck man.
Wasn’t it roughly:
EBs: min 5, 8-10 good, >12 v good
BBs: min 7-10, target 20+ but counting tons of stuff across products / balance sheet
MMs: big differences, also between US and EU — US usually significantly higher fee / MD (some ~8m for front office MDs)
Numbers are way too high; the question is about average. Good BB bankers are closer to 15-20 a year min with some outswings in some years due to bigger deals. Also have to remember that M&A can take quite a while, so a better way to judge individual MD performance is over a few years especially if that MD does a lot of M&A compared to other products as M&A by far has the longest timeline. Also, it obviously depends on bank brand value, if you are at a GS you are expected to win more deals by the name of your band versus DB even though they are/were (let's not get into the BB or not debate; just using the extreme to make an example) both BB's.
Sorry for your apparent lack of deals this year in asking for a longer term assessment of your revenue capabilities
Would show RoRWA adjusted fees. Then you know why EBs are king….
Yes, I would imagine that advisory fees in general (M&A, Shareholder Activism, Rx, etc.) that don't require the deployment of BS or rely heavily on underwriters/syndicate results in improved returns for the same headline revenue number.
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