State of the Houston IB Scene - 2022
Hi all! If anyone could provide an update on how the Houston energy IB scene stands and insights about the different groups, that'd be very appreciated!
Hi all! If anyone could provide an update on how the Houston energy IB scene stands and insights about the different groups, that'd be very appreciated!
Career Resources
Jefferies - Very strong momentum in the first quarter of 2022 that'll carry the group through the year. The group is definitely a "high beta" group, and probably has the highest ceiling of all groups. They had a mediocre 2020 and beginning of 2021 for their standards (terrible industry conditions and they didn't really manage to capitalize on the boom in RX activity as much as other groups managed to), but they're definitely back. Historically very upstream and A&D focused, but they've significantly bolstered their midstream and OFS practices, and have also brought in a partner from PJT to improve their Energy RX practice. In terms of advisory fees generated, they make absolute dough on churning out A&D deals and do very well for themselves. Comp is high, and culture is brutal (although it's gotten better than it used to be).
Citi - Very strong group. They have a very solid mix of deals across all verticals and both on the sell-side and buy-side, with lending relationships with just about every major energy firm and strong senior relationships as well. From a deal flow AND culture POV, I'd argue they've replaced Barclays as the BB to be at over the past few years. Culture can be sweaty, but isn't too bad. Pay is lower than the boutique groups.
Evercore - Another very solid group. They've always been a strong group, but their reputation as a group was significantly bolstered by the RX boom during COVID. Whereas Jefferies is a "high-beta" group, I'd describe the Evercore group as definitely a more hedged group, with their very strong RX practice bolstering weak M&A deal flow (case in point, the group in 2020). Culture is absolutely brutal, and turnover at the junior level has been extremely high (one of the first year analysts left 4 months into the job). Pay is in line with Evercore NY, which means it's also pretty high and well above street.
GS - Very strong M&A deal flow (as you'd expect from GS), and they get on quite a number of marquee deals. Overall, it's GS, so in terms of deal flow and exits you know what to expect. Culture is awful, seniors are sort of...weird, and pay has been quite disappointing.
TPH - Have had quite a volatile past few years, but they seem to have found their footing. Missed out on quite a lot of RX mandates in 2015/16 before being acquired by PWP, and then saw quite a lot of senior turnover. However, they've done very well in the RX space during COVID and their M&A deal flow has stabilized significantly over the past two years, and despite some recent senior turnover I'm generally optimistic about their prospects. WLB is tough and culture is rough, but still better than Evercore and Jefferies. Pay is also high.
RBC - Rising group. Whereas a lot of other balance sheet banks pulled back their energy lending over the past few years, RBC didn't, and their resolve to stick with the sector is now paying off. Most of their more notable deals are still on the buy-side (because the deals are originated from their lending relationships), but they're winning increasingly on sell-side mandates as well. Culture is really rough, and RBC is super facetime heavy. They also cut quite a lot of bankers in early 2021.
JPM - They've pulled back on their lending practice, but deal flow has still been great. Comp is roughly street. Culture is OK, still quite rough, but much better than GS and RBC.
Barclays - Still a solid group, but is nowhere close to where they used to be after Skip left. Haven't heard too many complaints about culture or comp, and exits are still solid.
CS - Solid M&A deal flow, but nothing too amazing. Culture is surprisingly good for the Houston banking scene. Comp is in line with street.
Moelis - Amazing energy RX deal flow, they absolutely killed it during the pandemic. M&A deal flow is also solid, but is definitely below the groups above. Culture is tough, but Houston IB culture in general is tough, and honestly I haven't heard too many complaints from friends at Moelis.
HL - Sizable team in Houston. Very strong RX platform that poached a bunch of bankers from Moelis and Evercore, and they've done well for themselves over the past 2 years. Culture there is rough, but isn't too awful from what I've heard.
Intrepid - Started by former Barclays head Skip Mcgee, and they have a very good senior team. Very strong firm for their size, and they've done well for themselves in terms of RX work. Hours are brutal due to strong deal flow and lean team, but pay is also high. Still too soon to tell, but the group's been very promising.
General observations:
- Heard JEF bonuses were weaker than expected after a good year
- Heard the same for Citi
- Have not seen EVR of a big mandate of recent
Energy prices are high after several bust years - if results are not good after this year, will be brutal for recruiting
- Jef HOU 2nd year analyst bonuses were 150k, that's not weak by my books
- Citi bonuses were weak across their whole bank
- Agree that EVR hasn't been on a big mandate recently
Meh bank that hasn't really been on any big M&A deals. Know someone who worked on just one pitch their entire summer with the bank. Average culture, average pay, average-to-below average deal flow with most of it being financing activities. You are not gonna have the best exits opps available either - The only thing good would be that its a BB with a good brand name and that the wlb will be better than other shops in Houston that actually are killing it right now (JPM, RBC, JEF, Citi). If you are interested in either deal flow, pay (there's some banks who pay a bonus thats close to double of BofA's bonuses), or exit opps - you should look elsewhere. Also, most if not all of their renewables/energy transition is run out of their group that sits in NY not Houston so you'll also not get any of that experience. Its not the worst bank to be at but its also not the best. The group's closed one deal so far this year and that was a renewables deal that might have been run out of NY.
TD;LR:
Pros: Brand name, relative WLB
Cons: Pay, Deal Flow, Financing heavy, Exits, Culture