I just saw Patrick post something like this for LA IB. So, I’m curious what it’s like specifically for Houston. I know all the banks in Houston, but what is each bank really known for? Who’s growing? Who’s shrinking? Stuff like that.
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*Personal opinion from someone in the industry
RX is (for obvious reasons) becoming an increasingly important component to deal flow since capital markets activity is still very slow. Most of the bulge brackets are fine but fees are down across the board and they’re certainly not growing. Shops like Evercore and TPH are bloated and fees are down but they have good enough RX arms that they are able to stay afloat. The ones that are “shrinking” are the more niche names (Simmons) and arguably shops like JeffCo that are just way too bloated for the current volume of deals (lacking in a significant RX presence)
Growing: Moelis, Houlihan
Stalwarts: Evercore, TPH, Intrepid, Citi, CS, Barclays, (most other BBs)
Shrinking: Simmons, Jefferies, Scotia
So if I want to do Houston after I graduate, what shops should I set my sights on? Do you think O&G RX still be growing 2-3 years from now?
Honestly impossible to say what the market is going to look like 2-3 years out, but barring some sort of 180 in commodity prices / demand outlook, restructuring will continue to be a good source of deal flow.
I'd encourage targeting most of the EB's just because their deal flow is much more hedged against the volatility in the O&G space. That said, if you want a bigger brand, Citi / CS / Barclays are solid choices and I can see them leading the charge in consolidation that is likely to happen.
thoughts on JPM, GS, and MS?
Step below Citi / CS / Barclays in terms of deal flow in Houston. JPM is solid, MS hasn't done too much lately and GS deal flow is pretty good but culture is terrible. Brands are obviously great.
Curious what the rep on GS Hou is culture-wise - anyone have more details about how it is allegedly terrible?
I’d like to know specifics as well. I’ve had a few calls with some GS people and they seem a little fake. Other than that I haven’t heard anything specifically bad about them.
Can confirm on my calls they all seem to be a little...airy? dense? I used to be anxious on calls and this one gs houston girl laughed at me about it
Have friends in the group, a couple have left fairly recently. Analysts and associates don't get along all that well, I know of multiple instances of internal conflicts at the junior level, people generally keep to themselves and aren't super helpful / supportive, seniors have very little respect for your time, if you're not one of the "in-favor" analysts you won't get good deal exposure. Just a keen lack of "culture" and a very corporate / work first mentality.
This is great concrete info thanks
Do you know anything about JPM
curious as well
CS Houston is set up really well and the people there are awesome
Yeah I agree. All the people I’ve talked with there are super chill and nice.
My peepee shrinking
Here’s the real question—what do y’all think about the energy transition?
There's no way that energy transition is going to be a fully functioning thing in the near future. Oil and gas and even coal is a huge part of energy production around the world. We have infrastructure built in with coal plants and oil and gas wells that have lifetimes of half a decade that are still being built now. No profitable company would forego these investments solely to ride the wave of renewable production. However, renewable is a very quickly growing sector in developed countries.
This might be the dumbest energy comment on this site. Nobody is building coal in this country.
Coal is not cost competitive with natural gas, not is it profitable hence the shutdowns. Oil wells do not have actual useful lives of 50 years, especially not unconventional wells
Seems like TPH is doing some interesting stuff to prepare for the transition.
https://www.tphco.com/greentown-labs-announces-expansion-to-houston/
https://www.tphco.com/tph-collaborates-with-halliburton-in-formation-of…
People in Houston at BBs (can't say anything about boutiques) seem to be caught up in oil and gas still and resistant to the energy transition from my experience networking. Oil and gas is very personal to folks and people get defensive. CS has a ESG pitching arm now.
Yeah I’ve heard that it’s a touchy subject to bring up around the upstream or A&D people. Like you said they get super defensive. Haven’t had a first hand experience in this, but it’s what I’ve heard.
It's not something that's gonna happen overnight but definitely is real and we are seeing the demand impacts already. Very difficult move to transition Houston / O&G coverage groups to Energy Transition just due to the minimal overlap. Energy Transition would be most closely related to P&U which is historically run out of NY.
I'm fine with having started my career in Houston / O&G banking but it's not something I want to do long-term. Sentiment among analysts varies but I think most of us have our eyes wide open and outlook is not positive.
Agree that the old guard in Houston are resistant and I would even go as far as to say in denial at the inevitable decline in the industry.
Something an analyst told me is that when you’re recruiting for Houston they need to know you want to be in energy and in Houston for the long haul. If they find out you want to move to NYC or LA after a few years then they’ll ding you. Is there any truth to that?
Are your exits limited to energy or can you internally transfer to a different industry group and recruit for a generalist pe slot?
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