Why are CIMs sooo long
I feel like it becomes an exercise in how many times we can repeat the same 8 investment highlights over 60 slides when we could fit it on 10
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Reading this hits different when you’re currently turning comments in a CIM
Take a guess at what my motivation to post this was haha
Limit investor questions later on and answering the same damn thing to 100 investors vs saying “please see page 75 of the CIM”
Disagree with the former. Too many PE guys don't even take the time to read the book and ask stupid questions on calls where you can use the latter. Still a waste of time.
Yeah, true for sure. But at least you can reference the CIM
Curious if you find that Corp Dev guys are equally as lazy. Ive worked on two different corp dev teams and we read every CIM cover to cover, even up to the director level. Im usually tasked with knowing the CIM inside and out and coming up with a comprehensive list of questions.
I was going to say the exact same thing with buyer's not reading the CIM and seems they instinctively want to set up a call right after signing the NDA.
We always get questions that are clearly explained in the book. When we sometimes point out there is a whole section dedicated to their question, they follow up with "Thanks, wanted the voice over".
That being said, we have shifted to much smaller CIM/CIPs - I think the last one we went to market with was less than 35 slides.
CIMs in general are such a joke. Always ends up being form over substance. I’m good at slapping together creative formats and it’s hilarious when everyone thinks I’m such a good CIP drafter bc my slides look good (thx graphics department) and I can copy-paste the same adjective-ridden fluff language from another deal to 10 other CIPs. Like who bothers even reading anything except the financial section???
ok obviously a bit of exaggeration / does require thought but still, there’s so much fluff/inefficiency that go into these it’s not even funny
Last two CIMs I’ve built have been 110 and 90 pages, absolutely brutal
CIMs have never made sense to me. I feel they break all the rules of what a presentation going to high level executives/professionals should be.
Makes zero sense.
To make things worse, investment banks have the absolute worst design templates possible. They also break rules of design with 0 regard for best practices.
Take a look at the materials for The Boring Company. Definitely my preferred style of investment memo.
Here's what I think @Your boy Blue is talking about
https://www.boringcompany.com/seriescround
Technically they're supposed to be a deep-dive on the selling asset which theoretically leads into a more concise presentation under the cover of the management presentation. To be clear, I still think they are way too long and too onerous to parse through so I agree with you. But when I was in PE the CIM was useful to me as an associate given I was able to see financial / operating metrics both from a historical and forecast standpoint and help shape my view based on that (which was almost always a significant discount to the seller projections lol).
I guess on the buyside it was always more a question of "why not" have that much overinformation whereas on the sell-side it's like why tf are we putting in so much time to preparing and delivering all this bs overinformation.
Reading this shit hits different when you’ve been turning comments all day on a cim that’s now 80 slides long
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To be clear, CIM's are no longer Word documents (don't know how long it's been since you have worked on a CIM or if you work at some antiquated shop where this is still the practice). The shift from Word to PPT occurred for most reputable banks about 7 years ago, and the only Word CIM's I see now are done by tiny shops. Interestingly, we have started to see some shops integrate interactive data into the digital copies - hard to tell how widespread the adoption will be.
(-
I always enjoyed when the digital copy of the CIM would have a link to a tour of the site or to a video of the manufacturing process.
Or Harris Williams, the GOAT middle-market M&A franchise, so I hear on WallStreetOasis
This isn't really how you communicate right? Having a damn stroke trying to get through this
No one has made CIMs in Word for years now. All PowerPoint. Did you switch industries or something?
We need to do better early diagnosing people who have strokes.
Nothing loses my attention faster than a long CIM lmao. 90-100+ slides is lunacy. 50-60 is even pushing it. 30 is ideal IMO. Tell me what the company does, how it does it, why it's differentiated / why it wins, transaction details (current ownership, transaction goals, desired structure, etc.), maybe a customer case study or two to help me understand exactly how it does what it does.
Yea, but then you'll ask for 50 additional data requests before you've even decided if you are going to submit a worthless IOI.
Which PE bro hurt you brotha??
Won't be (m)any data requests if you could effectively present the salient points of the business in a shorter deck.
But since that requires thinking, make the poor analyst crank out 10 extra slides about how this market-leading company leverages robust, proprietary technology to effectively enhance connectivity and deliver mission-critical solutions to stakeholders across the value chain producing measurable and actionable results while minimizing disruption and generating cost savings.
Don't worry, when it's crickets on bid day, I'll still be a bro and lob in a bid so the client doesn't get mad :)
If its more than 50 slides, it's a data dump and the bankers are too lazy to craft a good story.
FT Partners' CIMs can be 200-300 pages long. Heard it from a colleague that used to work at FTP. Apparently, Steve is a big fan of making super long CIMs that are hundreds of pages of charts and graphs.
Understandable considering how the juniors are comped (140k base as An1 btw)
Phony! Where's FTPinsider?
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Dude I work on a top 3 LevFin desk and everyone has ditched Word-based CIMs. Probably happened 3-4 years ago. The investment grade space made the change before that. There is now one master PowerPoint based document. "LP", "CIP" and "CIM" are all used interchangeably now. Sounds like you do a lot of participations and may not have insight into what the larger arrangers are doing now days.
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I am not sure what 'top 3' levfin desk you work at but the CIMs I work on (literally as we speak) are word-based. A CIM recycles 99% from the RAP/LP anyway and if there is also a bond, it can even leverage the OM.
Because that's how MDs learned how to market a company, it's essentially going to be a never ending cycle of "well that's how I learned it". I was talking with a guy I work with about this exact thing and we essentially came to the conclusion that if we were on the other side of the table we would much rather get a 10-15 page deck and a well built model over a 60 page CIM.
Real issue isn’t even the length. It’s pages and pages of selling points and BS that don’t address key concerns for someone looking to have skin in the deal. When I real sell side CIMs, I’m always thinking about how are these schmucks trying to fuck me over? The irony is having to read between the lines even when the page count is high. The dance is part of the diligence.
i feel like that's ib in a nutshell lol all these slide decks (pitchbooks, CIMs, etc) are too damn unnecessarily long
If this is HF investing, CIMs would be cut to 5 pages, max.
There are less than 10 important pages in every CIM. But every person, since grade school, has been taught that length = quality.
So you just pile on the pages to hit 50+ in order to
a) make your client think you really worked hard and did something special and are worth the money and b) make potential buyers think wow this is a great long complicated deck I probably have an upward bias on the quality of the company.
It's also to "confuse" the potential buyers or play "hide the ball". If you dump a shit ton of info & data on them, they may work themselves into a frenzy and be unable to separate the signal from noise to ask the 3 or 4 important difficult questions.
bankers are trying to compensate for their lack of length in other places
As a former banker (now in PE) I completely agree with this - I honestly wish CIMs could be so much shorter.
Speaking as someone on the buy-side, there are only two sections I really care about in the IM - I’ll read the exec summary, and then flip straight through to the financials. Everything else imho is heavily padded/fluffed up - seems like every company has a management team with “200 years combined experience” and “significant growth opportunities” - also I don’t really care about their ESG policy etc.
Also in terms of financials, I pretty much ignore/barely glance over the sellside projections - in the IM the only thing I care about really are the historical/recent financials. Then I’ll start digging through the sell side model - as that will quickly show up how optimistic/unrealistic a lot of the projection scenarios are. I’ll probably build my own version of the model with our (invariably more realistic) assumptions to get an idea of future cash flow/P&L.
Actually thinking about it comps tables can be quite useful as a quick reference of relative value (although tbh on the buy-side you should know your industry/field well enough that you immediately know similar comps almost off the top of your head).
So yeah in summary - I’m sorry to say bankers, but the vast majority of stuff that gets churned out for a CIM is mostly ignored on the buy side (I’m an ex-banker myself so have grinded away at all those pages many times).
I guess the issue is that any bank which produced say a document with only 10 slides/pages would be seen by the client as “lazy” - so to keep up with the competition they have to churn out all these pages if only to make it look impressive. Hence this probably won’t change anytime soon.
My forever favorites are couple of CIPs I saw from an EB that has a particular senior MD who is known for going CIP crazy - content, design, endless turns. They sold two very similar businesses (think similar roll up platforms) back to back for really good valuation. 60-70 page deck. Exact replica. Page after page in same exact order. Just different colors. Even the words were same.
Equally important in this convo is how much content gets shoved onto a page to fill all white space. Leaves zero room in the brain to focus on the meaning of a single chart or box of text and consider it
Pro VP move:
Efficient CIP/CIMs should not be more than 35 pages. Like you cover:
Exec sum, Market, Customers, go-to-market, Products/tech, Financials,
Anything else is going to be bullshit like people/ culture, “growth levers” etc. What more would you actually want to know about a business aside from the first group? I’m convinced cips suck because most bankers have no clue how to sell and are atrocious at their jobs suckling off the brand and relationships their institution and tenure has bequeathed them.
Wish I could give you 10 more bananas.
As somebody with a sales-related role pre-MBA who is now in IB, you hit the nail on the head. Most of these guys don't know how to sell. Some of the CIMs we put out are actually a joke. "We can't have white space on these slides" -direct quote from MD
You want to make a memorable, clear point, not stuff as much information and graphics onto a single page. It's actually insane.
Saw a CIM from what would be considered a 'low quality bank' recently and it was actually so good and clean but my VP says "looks so sparse and empty". Some pages had just one big chart and a few bullets. I knew exactly what the takeaway was. To think it was sparse instead of clear says it all about the mindset
this. it's mostly the illusion of work because they charge so much for it...
That’s why you make CIMs 200 pages long and cram each page full of unnecessary detail because it’s the only way that coverage bankers can prove that they have done work and can justify the multi-million dollar fee.
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