Is ECM at all banks easy/lazy
I’m at a BB bank with a relatively weak ECM franchise so I’m curious if the ECM teams are generally lazy / do nothing across all banks, or if i’m missing something.
Seems like all they do is pump out boilerplate market update / IPO update slides, creds, themes, etc that they can use in every book. Whenever something comes up that is technical and/or needs to be mildly tailored to a specific client or ask, they do everything they can to punt it off to coverage bankers.
Some people argue “everything is live” but that’s also the case with M&A and Levfin, and they do their work.
I don’t mean this to be overly accusatory as I’m sure there are very intelligent ECM folks, especially at the top levels. It’s just that every book I do with ECM is excruciatingly painful because they don’t really do anything that requires thought.
Maybe it’s different at banks with stronger ECM franchises.
Citi?
The truth of ECM is:
Interestingly, most of the heavy lifting is worth shit if the bank doesn’t deliver on the public side, and ECM needs to have a good read of the ability to place paper.
In a lead role, most of the work will fall on the coverage team. But ultimately if the company is something that doesn’t excite the sales force or where the bank covers the wrong clients, itms worthless (disclosure: i’ve been in such a deal where my firm didn’t deliver. I was coverage & leading all the heavy lifting for 6 months, all to realize after deal that none of the investors our sales covered had any interest in that size / geography of deal. The client only saw the latter, pretty bruising experience).
The value of an ECM team is to 1) read market conditions & help clients plan for their needs, 2) interface with the public side of the firewall and assess whether there is a market for the bank’s investor base for this investment thesis.
Fundamentally, it’s a role that’s a bit useless at the very junior level (except some process management), but becomes more valuable at senior level.
If you are a junior, the best way to work with ECM is to ensure that 1) they tweak the boilerplate as necessary, and 2) don’t screw you over in their timetable management (“we’re seeing company X Thursday this week to pitch for a new issuance, can you guys send us your standard pages on the company for [investment thesis / market overview / relative positioning / XYZ that doesn’t exist and requires real work]
It's not very different at a bank well-regarded for their ECM franchise either, at least at the junior level. It's process heavy and there's no "real" analysis being done, but the difference is no one really blames them for that. Would say common view here is that they are the farthest thing from lazy / stupid - they're usually just on a million deals at the same time and staffed very leanly. No idea how they keep up with all the processes they are on honestly.
What's "easy" or at least better about ECM at a stronger franchise is it seems like they have a lot more autonomy at the junior level. Associates get to operate like directors, running deals as main ECM points of contact, and analysts get to do work with limited/zero oversight. The quality of their work is often dog shit, ngl. But cool they get to operate so efficiently and take real ownership in their work / team results. Certainly different than IBD
Citi?
At my bank (top 10 in ECM), ECM is the one coordinating with lawyers on documentation and giving direction as to what’s market precedent (their job is knowing the market after all). Coverage team does 100% of the heavy lifting on the MP and other marketing materials. My group would be completely lost without the ECM team guiding us on what to do on a live deal. There is a VP on our ECM team who knows how to navigate all the legal-ese in docs to the point I thought he had gone to law school.
On pitches, they do very basic things as you noted.
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LOL
SB’d
Hey now. So long as you are on the right side of Putin that sounds like a phenomenal gig
Honestly seems like a great role if you have a family and kids and you want work life balance and get paid well lol.
until you get let go and the only other job people will hire you for is ECM. Seems like no mobility the longer you stay
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