Ranking banks that went under
As a current student and incoming intern, there are a lot of banks like Drexel Burnham, Lehman Brothers and Salomon Brothers which were elite, yet I never would have heard of without reading on the topic. Do any of the older chimps of the forum have any insight as to where those banks would rank currently or which banks they would be analogous to? Would be interesting to hear any cool stories as well
Feels like Drexel would be a Moelis or Jefferies
Feel like theres a big gap between the two 🤣
Both have pretty much the exact same business model where both are aggressive pitchers lol moelis is just an overglorified jefferies
As someone who actually broke in, the funny thing about Moelis is there are multiple groups that are so good they never have to pitch, but you only know how to regurgitate stuff you’ve seen on WSO.
bump
IMO Lehman was a mid-upper tier BB by today's standards (its modern peers would be Citi/BofA/MS) while Drexel was indisputably top dog (head and shoulders above modern-day equivalent of JPM/GS), Salomon was more top tier MM (think JEF, as RBC is a BB).
Heads and shoulders above GS/JPM is hard to imagine, what made them so elite?
Drexel's Junk bond business was one that made them very popular, almost every major takeover had Drexel involved in the funding, helped fuel PE buyouts and also assisted corporate raiders. Although Drexel was top player in these areas, its dominance was short-lived so we can't really say it was the most elite firm imo
michael milken lol, that dude made 550 million a year at drexel peak(not for drexel, his own salary). drexel was super successful because of him, the HY bond market basically revolved around his desk. The PE LBO boom of the 80s was also driven largely by him, he wouldn't even have to finance alot of them, his reputation allowed him to just give "letters of high confidence" of fulfilling the financing required, KKR in the 80s would go around threatening hostile takeovers with milken's letters
DLJ was pretty elite back in the day. Alumni include Schwarzman, Moelis, and Einhorn.
Not to mention the goat paul singer
Troob and Rolfe are the goats of DLJ
Cousin worked at Lehman Brothers before it blew up. Claims it was their dream company to join. A lot of their coworkers including themselves were picked up by other respectable banks on the street.
Schwarzman (Blackstone) did make MD at Lehman Brothers before he jumped over to PE.
Was there a specific group or area that Lehman excelled in?
Just saw this. I'm not entirely sure. My relative barely talks about their time in Lehman. Did end up at Barclays post Lehman. Doesn't work in high finance anymore but has made a very comfortable living opening a business with their spouse (which is probably worth around ~$20M).
Lehman’s top IBD groups in the early to mid 2000s were definitely Natural Resources (specifically energy; take a look at guys like Skip McGee, who carried over a lot of that legacy franchise to Barclays which was very strong in NatRes in the 2010s) and communications and media
Any insights on banks like Bear Stearns and Merrill Lynch?
Bear was very fratty, filled with ex jock chads. CEO famously loved his ganja and commuted up the Hudson on his boat to work. Merril used to be one of the most coveted banks to work for, great culture and lavish bonuses. Until Stan O Neal took over, he's completely underrated today in terms of GFC villains but he f**ked Merrill up culturally and then it became fodder for BofA
ML was never coveted. Basically catered to retail investors. The corporate side was an afterthought.
Michael Lewis said it best. GS was the mean smart kid who owned the football, decided the rules and picked the sides. Salomon was the kid with lots of raw talent but too lazy to practice. ML was the fat kid who was happy he was allowed to play.
how about Dillon, Read & Co. and Alex. Brown & Sons?
Any insight on Bear Stearns ??
Drexel Burnham and DLJ. No question. Wish I was born 40 years earlier.
The good old days for sure. Now it’s just cringe worthy kids running around in Patagonia vests and sending 1,000 word networking emails
Is there any modern banks nowadays that have similar cultures or characteristics of the old legacy banks?
Moelis or Jefferies
Speaks volumes on how much kids put value on “prestige” or “eliteness”.
If they went under, doesn’t mean shit.
Don’t think so. I think it’s just a lighthearted post to understand the context and history of a few previous banks haha
DLJ Lehman and Solomon Brothers
I have an MD that always talk about Lehman. Says it was truly a great place to work, juniors liked being there, it was a family, and people got fantastic bonuses. they worked hard but no one cared because the culture was so great. said making a mistake was like making a mistake in a family, you got yelled at, but then no one cared the next day and it didnt affect your bonus.
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