Technological advancements in IB

Question

A while back I read an article about Lazard and Peter Orszag. In that article, one paragraph read:  "True to his wonkish background, Mr Orszag is emphasising data analytics as a strength. He said Lazard has just won its first client mandate where it had used machine learning and natural language processing in its analysis." (SInce I am new here, I am not allowed to post the link of the article.)

I assume they are talking about a mandate related to M&A, but I could be wrong. Does anybody know if more companies use technological advancements (i.d.

Pug · Accepted Answer

So what exactly do they do with NLP? Btw, NLP is a subset of ML. Machine Learning is when an algorithm (algorithm = set of code, really. It sounds fancier than it is) than can take data, store it, process it, and "learn" from that data to adapt to new outputs.

I'm not familiar with the nuances of IB and it's not a field I ever worked in. But what do they use this software for? I can see looking through earnings calls and documenting them and using unsupervised learning to find common words used and patterns. You could also simulate stock market predictions (basically what quants do).

Portnoy's Complaint · Answer

I know a little bit about this because the Lazard crew basically foams at the mouth during recruiting when talking about what they're doing AI and analytics. To my (limited) understanding, they are hiring ex-merger arb guys to run the same market analysis they do to identify opportunities, but FOR clients. This way, you can identify who is in your stock, if an activist is building a position, as well as potential ways to execute a tender offer for an acquisition.

SeaHawks2287 · Answer

M&A is completely different than these more quant-driven role in finance. An M&A process is a sophisticated way of saying either buyer or selling a company. There may be some some instances where it can be useful (i.e. analyzing market trends pertaining to that company, drawing analysis from large company data sets, identifying buyers based on specific criteria, etc.) but when it comes down it, no. M&A tasks such as making the CIM, reaching out to buyers, discussing potential benefits of an acquisition, etc. are much more quality-driven.

Angus Macgyver · Answer

"tinus"
 Will people without technological skills (i.d. programming skills) become obsolete in the future?

Not until someone builds a robot that can wine and dine clients, no.

This is a relationship business. Quite honestly, pretty much any monkey can do the work that is involved in sell-side banking. Really the only reason why you would get one bank to sell your business over another is because you went to school with one of their MDs, or their MD plays golf with a bunch of people who might be interested in your business

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Technological advancements in IB

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