When did investment banking get SO NERDY?
I always associated investment banking with these larger than life / schmoozer type of dealmaker characters. Of course we all have been brainwashed by Hollywood (American Psycho, Wolf of Wall Street, Wall Street) and a lot of these movies never have been about M&A.
But I wondered: has M&A been more the oldschool type I would have envisioned it to be or was that always more found in pre 2008 trading?
My observations with banking (mostly BB banks) on senior/junior level:
- Not really any dealmaker vibes - a majority of MDs were rather nerdy, super settled and no flamboyant characters at all. I.e., you'd expect fancy watches/pine stripe suit/ferrari types but actually get dudes in chinos with apple watches talking nothing but work. No big schmoozers/charisma/aura type of guys. In terms of wealth you know they were drastically above average (typically mostly because of a house in nice area + schooling for kids, nice vacation destinations) but nothing out of the super extraordinary in terms of lifestyle
- Uptight nerdy junior level - of course this depends on the bank (MMs probably more fratty) but also on the junior level I hardly observed anything I would have expected and prior generations told (regular night out/excesses/etc.) most people were heavily into sports/fitness or some other kind of self optimization. After that phase (assoc and VP) people became super settled (fiancees, etc.) so there was nowhere this portrayed M&A/investment banking/wild culture that people made it out to be
In general: I don't know how many generations it will take but I feel like the allure/prestige/ high earning master type of universe time is drastically fading away. Junior bankers basically live in shared appartments, work around the clock, and when not working spend their time sleeping or at the gym.
All of these media portrayed "city boy" lifestyle, the wild parties, the flamboyant characters, the large money .. I never observed. It basically feels like working at a big accounting firm and just doing three times the hours.
Thoughts??
Welcome to the present.
You've learned that increased regulation tames comp and lifestyle and that wages haven't grown in line with inflation.
Also something deeper going on, which is that autism is a requirement in most high end industries today. That's why you see more Zucker's than Bateman's.
Bateman is a fictional character. Life doesn’t work like a Hollywood film and don’t base your expectations of real world events off movies.
One of my favorite articles to reference is this 1994 article from The Washington Post, discussing 80s vs 90s Wall Street.
This article is older than probably most associates now, and I think it's an interesting look into the mindset and predictions of pre-GFC Wall Street.
If I would go back in Time to 2016, 2008, 2000, 1992. This would have been drastically different?
Welcome to ubs m&a!
I think part of it is just the world is getting more nerdy. Kids these days are more focused and less fun than they've been for decades - driven by increasing career pressure, increased economic insecurity and, of course, smartphones.
Heavy on the insecurity. Difficult to have fun when you're working hard out of fear and less out of some other form of intrinsic motivation
asians
- an asian
also an Asian and agree with this 100% haha, most, especially internationals, are very reserved and keep to their own groups which deteriorates camaraderie and culture
Be the guy to step up and intro these type of people to your own friends, sometimes they just need a nudge to get out of their shell.
As a half Asian - yes and no.
I'd say Asians raised with eastern standards are always gonna be more reticent compared to Asians like myself raised by Western standards. I've definitely come out of my shell more once I worked on myself, which is really what I think us Asians need to work on. We need to work on becoming more masculine in general.
Ok toranaga
Early recruiting and an overfocus on technicals. When these jobs recruit from the internship and that internship finds candidates sophomore year, you only get maladjusted weirdos who weren't socially distracted early in college and instead were rejects who leaned into finance.
You used to have fraternity/sorority people who would get it together by junior year and then find a job, but the early recruiting timeline just kills the ability to get normal kids.
Yea that figures, cs most of the fratty/“cool” kids who do end up in finance that didnt end up at a bb are at places with more traditional recruiting like mm/eb
Lol so true. Since they recruit in sophomore year the kids who are polished by that time are those who knew freshman year they wanted to do banking (which gives them time to do a summer internship, maybe join clubs, learn technicals and maybe do a fall or winter internship to pad the resume even more). All you get are absolute hardos who knew probably in high school that they wanted to do banking... I'm one of them and did make it but I recognize I was a bit of a hardo (and so were the people who recruited with me). All the less "maladjusted" kids like you say were still having fun.
I could go on about this but a few observations as someone who has done this for a while
- Increased regulation and media scrutiny post-2008 tamed a lot of the socially acceptable, institutionalized excess (e.g. lavish Christmas parties, retreats, no real caps on expense budgets)
- Comp on an inflation adjusted basis (and frankly in some years even on a nominal basis) is down — I’m being inclusive of the highest paying boutiques you guys rave about on here. We were paid more than them.
- Recruiting has just become ridiculous in terms of how early it starts. I remember when sophomore programs were a novelty. You used to recruit the spring of your junior year for that summer. Now, we are even hosting program / developing pipelines for freshmen. I think we attract a lot more socially awkward hardos as a result
- You guys tell me if I’m off-base but I think there’s just a generational shift in priorities. Unlike when I was an analyst and associate, I don’t see the junior classes really go out together - and I mean REALLY go out haha. There is minimal socialization outside of the office.
Couldn’t agree more. I’ll add a few more thoughts:
- The college application process has made people crazy — to get into a “target” school today, unless you are an athlete, legacy applicant, ultra-connected, or DEI, you basically have to start curating a résumé from 9th grade. Instead of doing things for fun, getting a part-time job, and having a stereotypical teenage time, you’re shuttling between hyper-charged academics (I’m talking 15+ AP classes), niche extracurriculars, and whatever else gaining admission to an Ivy League school entails these days. There’s little “grass touching” involved. This creates and selects for a certain personality type.
- The “STEM craze” has made everything a science and nothing an art. Coding is the new “it” skill now, interview processes across industries are more test-based, quantitative, and standardized than ever, and (in both high school and university), the humanities have been basically gutted (as in, students aren’t even required to finish a novel per week in English courses anymore), but a higher level of numeracy than ever has become the expectation. I feel this has made its way into finance. It’s all about “who can build the most complex model in the shortest amount of time using the most sophisticated shortcuts” now, everything is such a “hard science.” The whole world has become this way. I have a friend in music school, and auditions have become a quantifiable showcase in “who can exhibit a niche technical skill you’ll never need to use.” Nothing in creativity or even playing style.
- There’s much less “freedom to explore and fail” for young people. A generation ago, you could use your first two years of university to “find yourself,” get acquainted with college-level work (and get a few Cs along the way, even), and contemplate your future. You wouldn’t even need a junior-year internship; an MD I know (in his 50s today) was a camp counselor his junior summer and then did IB at Goldman Sachs after interviewing his senior year. Even then, the expectation would be you’d use the two years to take it all in, get an MBA as yet another reset, and then real life begins. Today, you have freshmen networking, sophomore summer internships, and people preparing for on-cycle PE before they even graduate college, at the same age at which their MDs could very well have been learning what EBITDA was. Of course this is natural selection for some very poorly-adjusted people.
- A number of factors have trafficked people prone to being hardcore towards finance. These include the exorbitant cost of law and medical school, the fact that all young people are poorer now so the premium on earning a lot of money out of school is higher, and (here’s my hot take) the realization among many young people that IB has many advantages over software engineering (job security, long term compensation, exit opportunities).
TLDR: The universe has been pushing hardos into finance from day one.
Engineering isn’t the only role in Tech. IB is not the best path to wealth.
IB attracts the prestige crowd now. Ppl who are prestige whores are typically quiet kids growing up so they want to maximize money and prestige as their way to announce themselves to the world. Naturally the juniors nowadays are awkward af
Michael Lewis made a book called “money culture” that tells a lot of stories about absurd unregulated banks in the hayday of the 80s. One story in particular was about a BB that had a really fat director, he bet he could run a mile in under 7:30. All the seniors went to Central Park and wager 10’s of thousands on his mile time at lunch. It’s a bygone era. That being said, nothing is stopping you from being any personality you wanna be at work (unless HR says stop)
I think also it’s due to the crowd. Banking is now so selective unlike back in the day where all the hires were through a friend of a friend. It’s so hypercompetitive the only people that make the cut tend to be very nerdy high achievers that are somewhat risk averse. (Don’t hate me, I’m recruiting for IB)
did he ever finish the mile?
They went and bought him like all new gear and hyped him up, he actually did run under 7:30
Let’s hope the new admin has leadership that deregulates the banking industry so we can start expensing bag off strippers on a typical Tuesday afternoon like back in the good old days.
Asians and too many Indians and specifically South Indians
What is so specific about south Indians that makes them different from north indians?
Is Mumbai considered South Indian? How about Gujarat?
I thought people there are like chad businessman, which is based
Mumbai is considered south india, Gujarat isn't but many businesspeople do come from Gujarat.
Immigrants from north india focus on trucking/farming etc, you'll notice many Indians that are in tech are from the southern part of India. This is a generalization, doesn't mean no one from north india is in tech.
So many nerds in London too, think it’s down to the huge influx of hardos with the social skills of a carrot
its down to the asians (both of the south and southeast type) that have switched career paths from a trad Engineering / Medicine route that they usually do to IB.
Its 100% down to the economic insecurity (as someone mentioned above). Wages are low in the UK, so the only option for the intelligent minorities is to chase the money. Go back 10-20 years and this demographic would aspire to be a surgeon.
When you started recruiting sophomores. Now kids go into school and recruit for finance clubs, memorize interview guides and do case competitions instead of you know, just being college kids.
All the bros you're looking for are trying to be influencers, Youtubers, streamers, and rappers. And some are going to trade school.
They’re also too dumb to pass the basic technical screen and maintain the minimum GPA
Couldn’t agree more
Asians hiring Asians and south Asians hiring south Asians ruined it. Culturally they are more reserved which is why the industry looks like it’s nerdier now.
Nah it’s the new age definition of meritocracy ruining it. These Asians are kicking behinds on technical screens and minimum GPA thresholds. When you judge on these then you will see these results
(i) The advent of smart phones (with the ability to video) , (ii) social media, and (iii) the shift away from cash bonuses towards deferred comp makes the upside/downside trade poor. No one wants to be the MD with 10 bucks of deferred comp who gets canned for doing something stupid.
Continue to bump up recruiting timelines, have hard GPA cutoffs, double HR staff, and keep promoting the anal Type A narcs and IBD will become the single lamest industry to work in.
Overemphasis of technical questions and mental math questions. Majority of “cool” kids don’t want to get grilled on random financial concepts for hours and build financial models from scratch in excel under a time clock
Delete
"has M&A been more the oldschool type I would have envisioned it to be or was that always more found in pre 2008 trading?"
For the most part, the "larger than life" type of dealmaker character is mostly a Hollywood version that is only actually exemplified by a very small number of bankers. This job is fundamentally a nerdy, boring job. It makes great dinner table conversation but when you actually get into the day-to-day of what the job actually is, normal peoples' eyes glaze over for a reason
You're heavily penalized nowadays for deviating beyond the set path since the start of high school
You're naturally going to get boring personalities that make their work their entire personality as it's all they've known for most of their lives
You aren't going to get a Jake Paul type kid that fucks around until they find something that they like doing and start killing it, but can also have fun while doing so
Hasn’t it always been like this? The job entails sitting on the computer looking at financials, using excel, and analyzing businesses for hours at a time without really even speaking to anyone aside from maybe your peers. It has certainly attracted more and more people with the age of information so competition is higher like others have said. The job is basically doing school projects and homework for a living. It certainly suits the studious/academically driven type. And look, I don’t look down on the less socially inclined person. Not everyone was raised and taught how to properly socialize, interact with others. These people found their competitive spirit in the world of academics. The only annoying part is some of these folk can rub people the wrong way at times. It also seems to invite a materialistic nature to their persona given that the only thing in life they ever worked so hard for was to get the “best” job to make the most money to let everyone know how cool their job is.
Tbh I think even the clients like this now and prefer this over the party type MDs
there is so much of a focus on maximizing value and shareholder return and extracting every last inch that the clients are preferring bankers who can value add from this aspect rather than a banker who will take you to a golf course in the morning, discuss basic materials over a $200 per head lunch and then end the day at a strip club.
Its a McJob, nothing more. Imposter syndrome is unreal as well
It’s due to the age of information and adoption of meritocracy
Till The 90s and even early 2000s it was a boys club where the most common route was knowing a guy who knew a guy in the business. So if you could be one of the boys and bro out that was your in. The smartest and most hard working kids either didn’t even know much about the industry or had no viable path to break into it.
But now it’s moved towards meritocracy, knowing actual technical finance, interviewing well and great grades. You need atleast a base level competency in these things no matter how much of a ‘bro’ you are which ends up disqualifying big chunk of this crowd.
Not PC to say, but a lot of this is because of the democratization of Wall Street. 30 years ago you had to come from a certain background and you’d get an ID badge.
Over time, it’s become much more meritocratic and as a result, there’s a mix shift from the north east squash roman numerals after their name crowd to the son/daughter of immigrants, parents owned a dry cleaner / gas station sort of folk. Less of an old boys club, less back slapping, less of a place to hide the fact that a big chunk of your livelihood/lifestyle is actually just your family money.
In short, it’s gotten more nose the the grinder stone Asian/Indian and less nose to the key bump Chads from Rye.
Huh? What are you even saying?
Im pretty sure the issue is you.
As someone else pointed out, it's primarily a product of the early recruitment timelines. When I went through recruiting years ago, we interviewed in the middle of our junior year, which gave us more time to figure things out; nowadays unless you have a plan before going to college, you're starting on the backfoot, and as a result, IB junior ranks are getting increasingly filled with more asocial people who are more inclined to be academic perfectionists rather than social people who are "smart enough"
Simple answer: it’s always been nerdy and now that competition is far greater for seats, the nerdiest of the nerdy are dominating.
Nerdiest are spending all their time on materials while normal bankers are actually doing deals
Welcome to reality
Banker comps are shit since GFC. You get a bunch of hardos who make slightly more than an average doctors only nowadays.
Small business owners like those owning 3-4 second hand car dealerships in Idaho or HVAC supplier in Montana makes a lot more than bankers.
I would argue that there are more pockets in biglaw (for men at least) where that 90s/early 00s NYC dealmaker lifestyle still exists to a degree vs being more or less evaporated in IB
Obv overall the trend is the same but it still exists there in certain teams and groups
I would argue that there are more pockets in biglaw (for men at least) where that 90s/early 00s NYC dealmaker lifestyle still exists to a degree vs being more or less evaporated in IB
Obv overall the trend is the same but it still exists there in certain teams and groups
It’s actually an interesting question that I’ve talked to very senior people about a decent amount
I think it really was driven by the rise of technology. Being a good analyst or ASO nowadays is serious work — not just busywork but like real math of managing 55 scenarios in a fuckshow model that only you understand. Didn’t used to be like that before excel went so crazy.
So finance used to be all these greasy suave MBAs. But then they needed people to run all these numbers since now boards demanded this performative labor to be confident in advice.
Fine — hire the nerds from Harvard. But then they are the smartest and hardest working people on the street all of a sudden. And they take over. And now Wall Street is run by people who love homework and hate eye contact. Kidding of course. But I think this is roughly how suave mbas and even lawyers became 4.0/2400 HYPSM types that will work to their last breath if it makes them feel like they are living up to their potential / their family’s expectations / insert defining insecurity here.
It depends.
I see more rainmaker types at EBs and places where that's valued. BBs are very nerdy at all levels.
I also see a difference in teams. Product teams are the worst, eurobanker heavy teams are bad too.
FSG and UK Country teams seem to be an exception, where the more personal traits are valued.
Not always true but often the case.
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