What's going on with Guggenheim?
On this forum they appear to be highly respected but looking at their recent transactions and I'm kinda shocked how poorly this year has gone for them. 0 deals in October, 1 deal in September, 2 in August, 0 deals in July....
The deals they have closed are for the most part core middle-market. With a firm of their size (~60 analysts per class), this is kind of baffling to see.
Can someone explain?
Very normal. They still have live deals to work on. Things are moving slow rn. you can't rlly see whats going on thru the company website. You need to be on company's internal email to see the full image. Also, a lot of firms are moving down the market rn bc large-cap M&A is not hot.
Did a blackstone deal in July
Natural consequence of current market decisions and Guggenheim's strategy. Guggenheim's been very heavily investing in and building out its MM platform over the past two years, and PEAG is now the highest-revenue division at Guggenheim. Guggenheim's large-cap team has lost a number of rainmakers over the past couple years (especially HC and Industrials), which has hurt the large-cap side of the firm, and with the relative lack of large-cap advisory going on in current market conditions, Guggenheim's been more reliant on PEAG this past year. And for that matter PEAG is doing quite well covering for the main Guggenheim team, I've heard that Guggenheim's fees aren't down as much so far this year relative to some other firms.
Also, Guggenheim's large cap platform was always really just a collection of rainmakers that held their own relationships, and Guggenheim's management never really tried to build out a culture of mentorship among rainmakers and "junior" seniors. As a result, Guggenheim doesn't have a deep bench of senior talent, and its large-cap division has always been carried by a few rainmakers and their own fiefdom of hand-picked junior MDs they favor. Ever since the days the big Bear Stearns rainmakers came over, Guggenheim really hasn't had a "one-firm" culture that firms like PWP and PJT have among their partners, which has really hurt them in organic talent development and retention of key rainmakers.
Also, fwiw all firms have been diversifying away from just large-cap advisory. You see all banks moving downmarket and taking on smaller deals as well as diversifying services (eg. PJT really building out Park Hill, a lot of boutiques building out PCA teams, PWP beefing up its growth capital advisory).
Saw this on another thread and think it sums it up quite well. Similar points
“Pre GFC, Guggenheim was really just a money manager, and a good one at that, Scott mineard and $300bn in AUM. Then came Alan Schwartz and his buddies from Bear. At the outset they did pretty well, cracking Top 10 US M&A in ~2014-2016. The problem is they employed an eat what you kill commission based model with a sparse set of rainmakers from across the street who had no vested interest in the development of the firm (culture, people, recruiting etc.) and a lack of a strong internal network. If you look at the other new wave EBs they all have a strong core group of bankers who collectively lead the platform:
CVP - Effron and his faction of the old UBS
Moelis - Ken and his faction of the old UBS
PJT - Taubman and his MS M&A and MediComms posse
It's still a good place to work and the comp is great. But they're deal flow has significantly weakened. They did well last year but as the saying goes "when the tide goes out, you can see who's swimming naked". Not a LT whore, but 30 deals and $8bn in volume this year speaks for itself”
Work at Guggenheim. Can’t confirm the “highest revenue division” point but can confirm the PEAG team is still getting smoked while large-cap is having a better go of things. Suspect it’s because many PEAG deals can get financing from private credit funds / less valuation impact in private space vs large corporates
What are your thoughts on joining a PCA group at an EB? Is it the future?
On the point of PCA teams, Jeff recently bought out the majority of Guggenheim's advisory team. They are beginning to rebuild now but are nowhere close to as strong as they were in the past.
if you follow them on LinkedIn - they've announced more transactions there recently than what's listed on their website
The website isn’t updated properly. League tables don’t capture non public deals (eg even large sponsor deals).
Didn’t they just advise on the Blackstone / Emerson deal?
The company website doesn’t remotely reflect the number of transactions. The numbers you’re quoting are way off
yeah man those numbers are not accurate lmao
0 deals in October? Really? Took me two seconds to find this Cybersecurity firm KnowBe4 to go private in $4.6 bln deal with Vista Equity Partners | Reuters
Yea my b. Looks like their website isn't updated. I knew things looked off which is why I posted here
Superday didn’t work out last week huh?
if they've lost rainmakers, why didn't they just poach other big hitters by offering them maybe slightly higher than average % of business they bring in?
Analyst class size this year is 43 in NY (have seen the list). Year has definitely been slow for them but in the last 3 weeks they’ve done Vista Equity (5bn) and Blackstone (14bn)
Done as in provided debt financing lol
They don’t lend, you dullard.
just got a teaser from Gugg this week for a several billion $ sell-side that is going to attract tons of buyers (incl. my client lol, goodbye holidays)
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