Best Energy Groups on The Street

As I start the recruiting process in the fall, I was trying to get a good sense of what the best energy/oil & gas groups are. I saw that BAML advised Shell on their BG acquisition and assume they're near the top, but was looking for some others that are considered strong in this sector.

Also, I would prefer an NYC group over a Houston group so if any do all of their work out of NYC that would definitely be a positive.

 

Of the major banks, the only ones with offices in New York are J.P. Morgan and UBS. There are some smaller players that may cover energy up there (Intrepid which is Skip McGee's group) but this bucket is gonna be small and tiny.

As far as best banks go, that depends on your criteria: + Name brand - important or not? + Deal flow - does it matter? Do you want the most, or just a "healthy" amount? + Lifestyle - yes, IB lifestyle sucks, but some banks will be better than others + Type of work - what sector - upstream? Midstream? Downstream?
+ BB, EB, or MM? + Along the Lending--M&A spectrum, where do you want to be?

Citi probably has the best deal flow overall, but that's just the first way to slice it, but you can get good deal flow at a lotta places. Citi also gets a rep for a tough work/life balance.

 
warriorsquared:

Of the major banks, the only ones with offices in New York are J.P. Morgan and UBS. There are some smaller players that may cover energy up there (Intrepid which is Skip McGee's group)

Not sure this is right, but I suppose it also depends on what one considers "Energy". Pretty sure Goldman has a New York based Natural Resources group. Ditto Barclays.
 

Energy = O&G. This mostly covered in Houston, with a few minor exceptions Natural Resources will include Power and Infrastructure, which is covered in NY, not Houston.

 

Most bulges have an energy/NR group out of NYC, but as mentioned before they include power, utilities, metals, and mining. If you want to do energy and be relevant, you'd have to go to Houston. If you're aiming to go buyside energy long term, it's tons easier to already be in Houston since most of the funds are texas-based.

there are a few deals run out of NYC but they wouldn't be run out of their energy coverage groups, they would be run by their M&A groups.

 

Lots of info with questionable accuracy on this thread. I don't personally work in Energy IB but I have 2 close friends that do (1 houston office, and the other in the NY office) both at different BBs. I'll just provide my 2 cents:

  • Yes several banks have Energy/Natural Resources groups at both their Houston and NYC offices, but the type of deals they work on differ. Houston mainly covers oil & gas (which is the largest chunk and usually what people are referring to when they mention "energy IB") and NYC mainly covers Power & Utilities, Chemicals and Metals & Mining (ECM / DCM / HY Financing), but the main advisory side is run through the Houston office (NYC provides more of a support role).

  • When it comes to overall IB fees (including capital markets), BAML/Citi are usually one of the top (both were top 2 during FY2015 for what it's worth). Not to burst people's bubble but capital markets constitutes a significant chunk of all energy IB activity, much more so than pure M&A by itself. In this regard, the bulk of Citi Houston's fees comes from capital markets activities, hence financing deals (ECM/Debt) are what the analysts in that office will be working on most of the time.

  • Barclays/GS are also one of the tops - the difference is that they usually have a heavier presence in the advisory side (read: M&A deals) so analysts in those offices will likely end up working on more M&A mandates, rather than just financing deals. If you're aiming Energy PE or the like, M&A deal experience would likely be what you want, more so than general financing deals.

  • Put it short, Energy as an industry is diversified - if you want Oil & Gas you should really be strictly aiming Houston; for everything else (Power, Chemicals, Metals, Mining) NYC is where it's at.

Array
 
Best Response
Charizard:

Lazard's us team was named as one of the three firms helping shell divest a 30 bn portfolio and are working on the linn energy situation, so their deal flow is much better than their shitty rep here on WSO. I got into an argument about it on one of the threads.

Lazard has a rightfully shitty rep in Houston because they're not a player on that town. Every sell side I've seen them on was run out of some combination of New York, Paris and London (including the Shell deal you referenced - which also includes BAML and i think another bank on that mandate).

Regarding which bank is best on HOU, honestly I think any one of C, CS, GS, JPM, Barclays, BAML or MS will give you solid deal flow. Shit, even Wells is doing some serious deals (TRP/ Columbia). Barclays (Pipkin, Jacobe) and C (Jamiesen, Trauber) probably have the most high profile MDs but both of those places have issues and the pecking order isn't like it was a couple years ago where Barclays and CS were clearly the strongest.

Regarding New York teams, GS, BAML, UBS and Barclas definitely have people who focus on oil and gas but the main teams are in Houston and they mainly only exist because there are a bunch of legacy MDs who don't want to move to Houston. That's not to say you can't get good experience in New York but you'll have to fight for choice staffing a as the preference is typically given to Houston Jr. Bankers (although not sure what the deal is at GS).

 

Just using a quick news search, I see that Lazard advised Houston based Columbia Pipeline (in addition to GS) in the TransCanada deal. Also was on $1.7bn Nexeo Solutions (chemical/plastics). Linn Energy and Goodrich Petroleum RX definitely involve the Houston team.

For full disclosure, I don't work there, but my impression is that deal flow has improved.

 

Cleantech is generally what the groups are categorized as. I just had an informational interview with a MM i-bank's head of cleantech on Friday.

I cover cleantech research as part of my summer analyst role on the buy side and, I agree, there's more attention being paid to it. The MD to whom I spoke also said their dealflow in the space has vastly increased, with heavy focus on solar and wind M&A.

 

You should do a search of the Website; I think we covered this question a few times, But generally, "Cleantech" and the like are covered in Tech & semi conductor types. This is due to the business model, i.e. First Solar is really a semi conductor company. It’s not an energy/power company.

Power assets, i.e. Solar PV, Thermal plants, Wind farms etc are covered in the Power groups. CS has a good shop, I have worked with them on a few deals and they seem legit.

 

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I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing. See my Blog & AMA
 

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