What banking function is one where the client needs you?
My question is, for the corporate level banking functions that banks provide (M&A, ECM, DCM, PF, Corporate Banking etc. - broad range), what function is the most bi-lateral between the client and the bank. The one concept about M&A I dislike (and maybe this is a function of being at an EB) is trying to win business when there is no business to be won in the first place. Pitching random opportunities, nearly impossible mergers, client is vaguely considering buying a business in CA, here is a 100 page deck on all that is possible etc.
What I'm looking for is one where the client clearly has a need for the service. I understand pitching to win business because you're not the only bank in town (i.e., RFPs, bake-offs etc.), but at least you're trying to sell something someone needs. I guess to phrase is differently, what are the most needed banking functions / products?
RX -- Seems the most relevant. Company is about to go under and they need someone to help them restructure. Sure they can choose between PJT, Moelis, HL, but they will need to hire someone
DCM -- Almost all companies need to raise debt / sell bonds to fund their operations, and they will need a bank to support that. Beyond companies, even governments, SWFs, universities need the bond market
CB -- All large companies need access to corporate banking products like TLAs, Revolvers etc. Small companies that become large will also eventually need access to those products
ECM -- Large public companies need to continually access markets, but not all companies need to IPO
Understand banking is a sales job. But much easier to sell a pen to someone looking to buy a pen. Would love to hear some thoughts from people in these various banking functions.
Taking a client public or managing a pension fund.
I would say when you’re dealing with large corporates/F500 clients, you as the bank are another vendor to them. These companies are so incredibly sophisticated that in a lot of cases they just use banks to facilitate whatever they need. You can rarely push back because they’ll supplant you with the next bank. In my opinion, clients in the sub investment grade territory / owner operated MM or LMM side can be less choosy about their banking partners and usually require more handholding depending on the owners sophistication/understanding. My 2 cents as I work in corporate banking
That’s a good point. Maybe the sweet spot is mid-market banking where the companies are smaller and have less leverage.
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