How do IBs determine the level of contribution of each department to top line?
I was just wondering, how do IBs determine how much does a related department/team contribute to a client's fee?
What I mean is say an IB receives $5m for a private placement deal. The teams that may be involved in the deal may include client coverage, ECM, research, ops etc (I may be wrong here, but let's just say more than one team or several teams are involved in the deal).
So, how do you say client coverage contributes 20% of $5m, ECM : 50%, research : 20% of $5m etc etc.
These figures can then be used to measure the overall contribution of each team to the whole IB's top line as a whole.
So does anyone know? (assuming of course, this mechanism is correct and is what being practiced by all IBs in general).
I would imagine the coverage MD would get most of the % of the fee and the product guys would get less. Part of the fee gets paid out to the firm. I think that % is higher at BB than at MM. That's how the MM firms compete for talent.
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