Allen & Co. the Invisible Investment Bank

Wilson1823's picture
Rank: Orangutan | 309

Allen & Co. now stands at number 9 in the M&A league tables after advising on both the Time Warner - Comcast, and the WhatsApp - Facebook deals.

They do not maintain a website and what I've dragged up online suggests that they actively try to maintain a low profile. But casually, these guys are killing it.

Anyone know more about them or how to get in touch? Seems like they might be looking for some more analyst help given the killer deal flow at the moment...

Allen & Company Investment Bank Overview

Allen & Company has 180 employees split among M&A, Capital Markets, Wealth Management, and Venture Capital. The M&A group consists of approximately 35 bankers and hires both summer interns and sometimes fresh college graduates.

Some well-known Managing Directors include George Tenet (former Director of the CIA), Bob Kerrey (former Senator), Bill Bradley (former Senator), and Dan Lufkin (founder of DLJ). Ian Smith (based in San Francisco) is the most important banker at the firm: he brings in the vast majority of the firm's deal flow and IBD revenues.

The entire firm is located in New York with two Managing Directors in San Francisco.

Allen and Company Investment Bank Website

The firm does not have a website.

Office Location

Located at the Coca-Cola Building on 711 Fifth Avenue in New York, the firm's offices have a very "old-school" vibe: dark wooden furniture, framed wall photos, expensive art, sculptures. The firm also has a full kitchen and butler staff, whose responsibilities are to serve clients and Managing Directors.

Bank Deal Flow

The M&A group is known to work on high-profile transactions in Technology and Media. However, Allen & Company will often slip into a deal more because of its relationships rather than its ability to execute. As a result, the firm is rarely, if ever, the sole advisor in large deals: it will usually co-advise with other banks (sometimes swooping in last minute) and allow them to do the heavy lifting.

Many of the firm's transactions are not publicly disclosed, so league tables underestimate the firm's true deal volume. Clients often come to Allen & Company for its discretion, since they can be certain that the deal will not be leaked before closing.

The firm does little pitching. On a revenue per employee basis, Allen & Company ranks near the top and very competitive with Qatalyst. The firm's transaction size "sweet spot" is between $200 million and $1 billion.

Allen & Co Culture

The firm is known to have a good culture. People are extremely accommodating, supportive, and respectful of each other's time. There is little busy work, and senior banker exposure is excellent. However, there is a lack of junior banker camaraderie given the lack of "home-grown analysts" (most of the junior bankers are lateral hires) and the conservative nature of the firm.

The firm has earned a reputation for being extremely secretive, but not in a good way. The firm is effectively a "black box": internal decisions are made behind strictly closed doors, and there is little communication within the office regarding high-level matters. When a large deal closes, or when a new senior banker joins the firm, or when someone retires, an employee will often first hear about it online.

The firm claims to have an "entrepreneurial" environment, but in reality the culture is very stuffy and traditional. The firm is incredibly bureaucratic, as every decision must go through the CEO. The entrepreneurial part refers to the fact that MDs are paid 100% on revenues they bring in (30% cut), though other firms may employ a similar structure.

Compensation

Compensation is in line with other banks, likely at the higher end.

Exit Opportunities

Analysts do not get many looks from headhunters as a BB/EB/MM because of the small analyst classes and lack of name brand. However, a few Analysts have gone into growth equity, though these candidates were extraordinary. Most end up in corporate development, startups, and business school. This is not the firm to join if you are set on buy-side opportunities.

While the firm claims that it wants to hire career bankers at the Analyst level, essentially all of its Analysts exit. The majority of the firm's Associates and above are BB/EB/MM lateral Analysts who knew they wanted to stay in IB long-term, which is the same case at any other bank.

The junior bankers are very bright, but not ridiculously impressive. Many of the best undergraduate candidates will often leverage an offer at Allen & Company for something else (see below for reason).

Allen & Company Careers and Recruiting

The firm will conduct OCR at a handful of schools and offer resume drops at others. These schools are not consistent year over year, nor do they have true "target" schools. The firm is open to recruiting from non-core schools.

The surest way to get a job at Allen & Company is to cold-email (see bottom for email format). Expect 1-3 phone screens before being invited to a superday in New York. Superday questions are a split between behavioral and standard M&I technical questions. For relationship hires, expect an easier interview process, or none at all. Recently, 1/4 of the class has been composed of relationship hires, and the rest normal hires.

Each summer class consists of 13-15 interns split among sophomores and juniors (overwhelmingly juniors). About 2/3 are placed in the M&A group and the rest into Capital Markets and Wealth Management. Sophomore interns have historically landed top-notch junior summer internships (BX, JPM, Lazard). Note that sophomore interns who return to Allen & Company for their junior year are not guaranteed full-time offers.

All junior interns in M&A are eligible for one of three full-time spots in M&A, while junior interns in Capital Markets and Wealth Management do not have an opportunity to return full-time (the firm does not hire out of college for these divisions). The firm will also consider external candidates for full-time spots in M&A.

Converting a summer internship into a full-time position is extremely risky because most banks fill their full-time positions with summer interns. As a result, many top candidates will leverage an offer at Allen & Co. for something more secure. Overall, it is not recommended to intern there as a junior as the odds are not good (the firm prides itself on hiring based on relationships). But this all depends on your risk appetite.

For lateral hires, going through a headhunter is the best way, though you'll need to work in a TMT group or TMT focused firm. Otherwise, cold emailing would probably work best.

The trend is that most of Allen & Cos candidates are from OCR and networking, with a few relationship hires sprinkled in. As a result, interns are very qualified and get quality work. Because of the low return rate, only the best and most confident interns will accept an SA position there. However, the number of full-time spots (three per year) hasn't changed, and with the increased quality of the SA pool, the full-time conversion rate becomes even more difficult. Furthermore, family connections will come into play here.

While Allen & Company does do resume drops on a number of campuses, be clear about the role you're applying for. One of my sources interviewed for IBD and, after he accepted the offer for IBD, they placed him into Wealth Management on the first day of work.

Allen & Company LLC Contact Info

While the firm does not have a website, you can still email employees there. For example, John Smith's email would be [email protected]. Use that email template along with LinkedIn to find employees at the firm. Both of the female Vice Presidents handle recruiting.

Conclusion

Allen & Company is a great firm for those interested in a long-term career in TMT investment banking. Many senior bankers joined as lateral hires from BB/EB/MM, and this is the recommended path.

Junior summer interns should be wary of the firm given the extremely low return offer rates, which are by far the lowest on Wall Street. Sophomore summer interns can easily leverage their experience at Allen & Company for a top junior summer internship elsewhere.

Overall, there is inconsistent brand quality among the firm. For those interested in a more well-rounded experience, better brand name, and better exit opportunities, a BB/EB tends to be a better bet.

This post was adapted from an in-depth review of Allen & Co posted in a separate thread.

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