Rogo Changing The Game
I know there have been lots of AI-related discussions recently, but wanted to focus on Rogo / Felix and what it can do.
We got it at our bank not that long ago, and since then it's come an insane way. Once we've gotten acquainted with it, it not only has our template, but can learn skills (eg automating buyer logs), make slides in ways you normally make them, fill out templates (altho we still have to FS refresh, etc)
Something I keep thinking about it is how ChatGPT wasn't even public 5 years ago. How do you guys see this evolving and I wonder if the hierarchy / promotion change will change - albeit very slowly. Noting Citi reduced analyst years from 3 to 2
Noting by all means not an ad for Rogo, I know it still has its issues (of which an obvious one is time)
Keen to hear everyone's thoughts
Nice going, Jared Swansen!
We got it at my firm as well like a month ago and it’s a game changer. A bank without such tools will seriously not be able to compete
I am not quiet sure what I think about all of this. I leverage claude hard to build models, but I still don't work significantly less. The complexity that is expected increased significantly and I have much less confidence in any of the models I currently own.
It feels like reading a book in depth (old world) and presenting a summary in class, vs. trickstering yourself through only reading the summary and presenting it in class. It will work in a lot of cases but once things get a bit heated and suddenly the audience (aka senior leadership) starts poking questions, it gets extremely uncomfortable.
There is just something in grinding out a model yourself from the start. 4-5 years ago we build every cell ourselves. Every formula you had to think through when putting in ... this made you sharp.
Can't really explain it but I feel incredibly dumbed down. I can churn out content and models so much faster, but I lack the indepth understanding. Even when I go through and verify the lines it does not fully click.
I work on the buyside now and just use Claude… but 100% agree with all of this.
There will always be a need for some juniors given professional service-based businesses like IB are fundamentally apprenticeship-based. That said, there will clearly be fewer juniors needed as each becomes significantly more productive. Think the junior role will shift from being a doer to more of a checker, effectively taking on much of what associates do today. Frankly, think associates are pretty much useless in IB now, though you could argue that was the case even before AI. Ultimately, fewer analysts and even less need for associates. Doing an MBA to get into IB has already become a less desirable path for other reasons over the past decade or so, but think it is even more so now.
What do you think becomes of the associate / VP years in that case? Slimmed down / less time to promotion? Or headcount cuts - or both
I would break down investment banking into three basic components it's 1) work product, 2) ideas, and 3) relationships.
Work product, the actual slides, comps, models, analyses, etc. have always been commodity. That said aggregating it and doing it correctly takes up a lot of time and AI will meaningfully make this more efficient. Historically from what I've observed analysts have spent a ton of time on stuff like share price / multiple charts that have massive excel back-ups, are a huge pain to swap companies in and out of, and I don't think provide much learning. It's great to see those automated, same with things like PIB assembly, comps, etc.
Ideas (M&A targets, what strategic alternatives to pursue, analyzing company performance, etc.) have historically been an area of value-add for senior bankers (and the learning ground for where juniors) but this is actually where I see AI having the most impact. Now you can type into Rogo "what are the key synergies of merging Company A and B" and it will spit out something pretty sensible. Same with if you ask it what are the top 10 acquisition targets Company A should pursue. Obviously requires judgement on the bankers part to determine what is slop or not still but the AI is becoming increasingly adept. AI is rapidly making idea generation a commodity as well.
Relationships have always been the most valuable thing investment banks provide. As of now AI can't really replace this. Historically good work product and good ideas have been a way to build good relationships so that dynamic will change in a way that I can't predict right now. But ultimately CEOs / Boards need to trust the bankers and/or the brand of the bank. How they get to that is rapidly changing. Even the M&A execution process itself with buyer outreach, diligence management, etc. is being transformed by AI and becoming a commodity.
At the end of the day banks are selling a living and breathing entity. If a sales process goes wrong you generally don't get the chance to just switch banks and everything is fine. You get one crack so you need to hire the right bank the first time and the way companies make that decision is by having a relationship they trust.
One area that I think will be decimated is consulting. People are making industry slides of similar quality with AI tools today. I can't see companies paying $1M to McKinsey for a buyside market diligence report when you can create something of similar quality for far less. I think the 'relationships' of consulting while real are far less critical to winning business.
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