Dealflow and analyst capacity

To what extent is it true at investment banks, especially bulge brackets, that deal flow is correlated with analyst capacity. For example, at most banks, MDs have a threshold of revenue they must generate to keep their positions (more or less the situation). Similarly, analysts only have a set amount of hours per day available to do work (24 hrs maximum). If that's the case, is the concern about deal flow on this board misrepresented and should be rephrased as "quality of deals"? Because the number of analysts to senior banker ratio is set as such that analysts are worked a "banking" amount, ie. 12-16 hr day norm and the expectations of senior bankers at BBs a certain amount, so wouldn't it be the case that as an analyst, you can expect to be engaged on some sort of deal activity to a level close to your maximum capacity of work, at most, if not all times?

Thanks.

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This may not answer your question, but analyst capacity never influences deal flow. If a senior guy thinks there is a deal worth pursuing, they will pursue it. It doesn't matter if you're already there til 2am each night, you will be expected to find the time.

Your logic makes sense, but you make the assumption that all senior bankers are carrying their own weight. Also, when deal flow is less you can be expected to go above and beyond on what would be routine tasks. This makes normally quick tasks take much, much longer.

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Best Response

Sorry, I was unclear in my first post. I understand analyst capacity never influences dealflow in the sense that it doesn't drive MD behavior. What I am asking is this: we place a large emphasis on working at the "best" banks in the "top" groups that have the "strongest" deal flow. But as an analyst, the amount of work you can do in a day or in a week is a fixed amount. And to my understanding, based on the way bulge brackets in particular, evaluate their MDs on a yearly basis, they are expected to generate a certain amount of revenue. Yes, a MD may have an off year, but by and large, if they aren't pulling their weight for a prolonged period of time, they will be shown the door (generally speaking, I'm sure there are political factors at play for specific situations).

So if that's the case, let's say as an analyst, you can only work on 4-5 live deals at a time before you're hitting the roof. The way staffing levels work and especially in this environment where many groups are running lean, the group will make staffing levels such that every analyst is staffed on 4-5 live deals (maximum capacity in this example). So what I'm getting at is since generally speaking, MDs will work to bring in a certain amount of revenue to keep their jobs, you can expect to be staffed at maximum capacity, WHETHER or not you are a top group (say GS TMT whatever) or a "average" group. Is this true? If this is true, our real concern should be on quality of projects rather than number of projects (since it's going to be a fixed amount anyway), right?

 

It's honestly amazing how long it takes us to do things. You have so much shit to put up with you have no clue. Printer jams, wrong fax number to MD's hotel, presentation dept fucks up the graph, dealmaven freezes, excel models crash, over-bearing associates, etc... You COULD do all that you needed to in 50-60hrs a week, buuut work is given to you at random times in the day, and you are constantly on other peoples time so you can never use normal time-management.

 

You need to differentiate between "projects" and "deals." There are two types of "projects" on which an analyst can be staffed: pitches and deals. Most projects are pitches (marketing). This is especially true in the current market environment. When people speak about deal flow, they are referring to being staffed on deals or live transactions (when your bank is retained/mandated by a client for a specific transaction or transactions). While you can learn a fair amount working on a pitch (depending on the type of pitch), you only really get credit (from a resume or exit opportunity standpoint) for being on deals. There's no way that the average analyst is working on 4-5 "deals" right now given the general lack of deal flow (except perhaps in restructuring). Most analysts would probably consider themselves lucky to be working on 1 live deal right now.

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ex-banker:
You need to differentiate between "projects" and "deals." There are two types of "projects" on which an analyst can be staffed: pitches and deals. Most projects are pitches (marketing). This is especially true in the current market environment. When people speak about deal flow, they are referring to being staffed on deals or live transactions (when your bank is retained/mandated by a client for a specific transaction or transactions). While you can learn a fair amount working on a pitch (depending on the type of pitch), you only really get credit (from a resume or exit opportunity standpoint) for being on deals. There's no way that the average analyst is working on 4-5 "deals" right now given the general lack of deal flow (except perhaps in restructuring). Most analysts would probably consider themselves lucky to be working on 1 live deal right now.

I was an SA and was on that many live deals by the end of the summer (not in a restructuring group) - idk, that may be abnormal but I would actually say that pitches and projects where we did not have a mandate actually took up the majority of my time. This may very well be specific to my experience and I'm intersted to see what other experiences are.

The way it worked for us was that you essentially would be working the same amount regardless of dealflow. If you were not on as many live deals you would just be put on more work to try to win business.

I do agree with MonkeyKingdom 100% on his entire post, however. I often felt as though the amount of work really only equates to 50-60 hours but things outside of the analyst's control push it to 90-110.

 

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