Hi all! I was very interested in becoming a career banker as of this moment, but was confused as to how people typically make the jump from VP to MD. How do bankers build out a Rolodex of clients, especially if they don’t come from rich or privileged backgrounds? Wouldn’t it be harder for someone to make it to a more senior level without having any connections?
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Interested
So a few observations here, with some anecdotal evidence from my career. As background, I manage a group of c50 bankers but I am also still a very active deal banker.
1. Every single professional relationship I have has come from my work as a banker. Literally no one from my college days or social circles.
2. The most lasting and valuable relationships were built during my associate to director years (and a couple from my analyst years). These were rising stars in their organisations (sponsors and corporates), and I suppose I was one in mine. We were in the the trenches together getting deals done, and celebrating or commiserating when they did or didn’t, but over time, mutual respect and often friendships were built. They are now partners, C suite executives, entrepreneurs.
3. When I became a coverage officer, I started covering a few smaller companies that I believed would be successful. Those bets paid off and I am still their lead banker.
4. At the VP and Director level, I ran some important sell sides and milked those dry in terms of interactions with the key players in the sector. If you run a sell side well, it’s hard not to look good.
5. As a young coverage officer, I developed an edge - a product skill I could do better than anyone else alive - that got me business but I never allowed myself to get pigeonholed
6. I give my clients advice, I don’t sell. Even when I’m pitching, I’m in advice mode, not marketing mode. Good clients can spot a cheap salesman a mile away.
7. I trained great junior and mid level bankers and helped them succeed. It’s easy to do well, when you have high quality people below you. Many of these people are MDs, partners, entrepreneurs now. Some give me a lot of business.
8. Success begets success. Now, when I meet a new client, it’s easier because they will know me as “the guy who did X deal” or “Y’s house bankers”. Clients want to be associated with people they see as successful. This is true as a younger banker too. It’s a lot easier when you are seen by clients as a star within your organization, not some grunt
9. And finally, I cannot emphasise this enough. Be a good banker first and the clients will come. And when I mean good banker, I don’t mean the grunt that formats obsessively, models to the nth detail, gets caught up in long pointless books. If you don’t have attention to detail and technical skills, you’re dead anyway, but that’s the entry point. Be the banker that understands the sector, capital markets, deal dynamics, commercial considerations and how to deliver what a client really wants. Clients come naturally at this point. Obviously this doesn’t come easily or immediately but build over time to this point.
Thanks for sharing. Following up on your #3, would you be able to share what's an optimal way to cover new companies?
Incredibly valuable information - thank you very much!
If I can ask - when did the conversations go from you as a junior to the MD who has arranged the conversation (I've seen people up through SVP/Director still play the "Robin Role") to you as the one having conversation / advising? I'm interested in how you started reaching out to your professional contacts who are now in corp dev/Principal roles.
A good VP should be executing a deal from start to finish with limited guidance from above. That’s when you really start advising clients. But even at the associate level you start building close relationships with people at the clients. Keep it organic and use transactions to get closer. They key is turning transactional advice into strategic advice. Honestly, I tried it as a VP and was shit at it. Used by Director years to hone that skill.
Just adding some extra color to help hopefully for #2 on developing relationships while a junior banker with current relationships being made while working/through work, I heard the same thing from Anton Sahazizian (then MD or so) who is now the global (if not just the u.s.) head of m&a at Moelis. He encouraged us to try to stay in touch and build relationships with our junior counterparts at the firms we were working on deals / doing business with
In a BB, as you get more senior you start covering some niche areas for your team - “health care information technology”, “mena industrials and energy”, “EV related materials”. There will be larger firms your firm wants you to cover and that’s great but pro tip, find the emerging company and be the advocate for that company in your firm.
it’s a bit more organic at MM and independent advisory firms but same principle - pick winners early
as to the best way to cover them, even though they are emerging, treat them like they are important, establish yourself as a long term partner to their management team, be their advocate within your firm and to the market more broadly, be their trusted advisor, never peddle product just because you can, treat them fairly on fees and balance sheet (if applicable). Basically always think long term.
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