Dumb shit - bankers / clients demanding in-person meetings

Subscribe

I've been involved in a few different processes where bankers have indicated that we would be much more competitive in a bid process if we had in-person diligence sessions with management teams (who were / are in covid hotspots). Most of these are in covid hotspots, and we actually followed through on one offer and everyone was making fun of some guys for walking in with masks.

I have one comment: have y'all lost your fucking mind? I know half you bankers especially are living out this repressed frustrated masculinity hellscape where you really wanted to be an athlete or in the military or some other tough guy shit, but this right here is out of pocket. These management teams are also old as fuck so are naturally high-risk. Taking health risks during a pandemic isn't baller, chiefs.

Comments (42)

 
Aug 3, 2020 - 4:21pm

Management's reasoning for opening the office back up and pushing for in-person meetings is that "our value proposition to clients is our personal interactions. People don't use our services for what we do, but for who we are, and they don't feel connected to us over video call."

My personal theory is that they signed an expensive lease in prime real-estate and reason that "if we're paying for it, we're using it!"

 
Most Helpful
Aug 3, 2020 - 6:00pm

Management willing/wanting to meet in person is a pretty obvious red flag from a DD perspective. Really have to question their judgement/emotional intelligence if they so blatantly show such ignorance toward a global pandemic.

 
Aug 4, 2020 - 12:03pm

lvrup:

Management willing/wanting to meet in person is a pretty obvious red flag from a DD perspective. Really have to question their judgement/emotional intelligence if they so blatantly show such ignorance toward a global pandemic.

Wrong. OP's plan is to have mgmt. die from COVID then lowball.
Jokes aside, I couldn't agree more.

 
Aug 3, 2020 - 9:47pm

I too love the heat that has been brought'ened. I have no anecdotes like this b/c my firm is pretty reasonable, but we've been able to be reasonable because we're in a good spot from a deployment perspective (and leadership also genuinely good human beings with pretty average PE-type foibles and quirks). I wonder what it would be like if we absolutely needed to get 1-2 deals done right now - this would be painful. Tough enough as it is trying to do anything with our portfolio that we would normally do, let alone hold our noses and get on a plane and go to some factory or hotel conference room somewhere for a deal where there is a 1% chance of us closing on it.

 
Aug 4, 2020 - 7:55pm

Heard a good story recently about a PE megafund shopping around IB's for deal they needed done. The national head of the winning IB strongly suggested meeting with the PE fund in person to iron out the engagement details. This was back in June...

Megafund's protocol during COVID was that the CEO had to give the blessing for any in person meetings. Second he heard about the request, he dropped the iBank right there and went shopping for a new one.

 
Aug 4, 2020 - 10:54pm

flipcup:

I know half you bankers especially are living out this repressed frustrated masculinity hellscape where you really wanted to be an athlete or in the military or some other tough guy shit,*

damn hit home, homie

fuck

What concert costs 45 cents? 50 Cent feat. Nickelback.
 
Aug 5, 2020 - 9:33am

flipcup:

I know half you bankers especially are living out this repressed frustrated masculinity hellscape where you really wanted to be an athlete or in the military or some other tough guy shit, but this right here is out of pocket.

this is amazing. I'm imagining so many JRE/Jocko/Cobra Tate listeners being triggered by this

just because you're not worried doesn't mean it's time yet. I'm glad my bank has basically put a moratorium on in person meetings so I can just use that as an excuse.

don't get me wrong, I agree with the relationship aspects, you can't build that strictly over zoom, but it ain't time yet. sure, if you're down the street from your client and you guys can socially distance somewhere and EVERYone's comfortable, go for it, but it ain't time for that yet guys

 
Aug 5, 2020 - 2:59pm

Hopefully it wasn't one of ours. We have pushed (not required) in-person meetings to reduce the uncertainty of friction or misalignment. But, in all cases, we've required masks and distancing in a large conference/training room or hotel conference room.

It is incredibly stupid from a banker's perspective to allow a management team to be reckless and take health risks during a process.

Would you close a deal without meeting management in person? We've heard of deals being done/completed without any in-person meetings, but the majority of sponsors that we've worked with are requiring them at some point before they write a an equity check.

 
Aug 5, 2020 - 3:04pm

Add-ons are being closed without meetings. If you already have a management team in place it is much easier.

Can't imagine we will make it all the way to closing without an in-person meeting for a new platform, but maybe we will. It definitely is extending the diligence process.

 
Aug 9, 2020 - 6:41pm

Davistaz:

We've closed 3 platform deals since covid and have done all meetings through Zoom. It's certainly a challenge but deals have to get done somehow.

TBH I'm heartened to hear this. I'm glad people are able to still get business done (congrats to you, and good new for the rest of us). And I've long since been fed-up with the idea of in-person meetings. I like coffee chats as much as the next guy, but I don't like the idea of flying halfway around the country to do them - or in my case, just NOT doing business together because I'm based in Asia. I mean, I just don't get it. We live in an interconnected age, and we don't need to actually smell each other to get a deal done.

 
Aug 7, 2020 - 4:46pm

Video client calls work just fine. You can see their facial expressions and see when someone has a question or is paying attention, etc.

But fuck all this shit for internal meetings. I hate making eye contact with my coworkers before 11am.

 
Aug 8, 2020 - 6:46pm

Tell me about it... Once I flew to China (I’m based in Europe) just to do 3 meetings in 3 different cities (in the middle of nowhere) in 3 days (to then come back to Europe and fly out to South America for a few days... but that’s a different story). And the best part is that nobody spoke English, I was literally there to show my white Caucasian face. I really hope Covid puts an end to this nonsense once for all.

 
Aug 27, 2020 - 2:24pm

Was on a call a week or two ago with a partner at a fund who just went off about how he is thrilled this has highlighted the amount of meaningless travel that bankers and PE guys do in a process. Verbatim was saying "yea, we feel like we absolutely need to meet teams in person once but why the fuck do we need 5 steak dinners with them?"

 

I hope this changes travel in the industry going forward. Not to say that there shouldn't be any travel but lets at least be a bit more critical of whether it is needed or not.

 
Aug 10, 2020 - 10:49am

We've done some site visits (factory tours) with appropriate distance and face masks. Prior to June I found it difficult to get a good feel for mgmt capacity through video calls (body language remains important for hidden info...) but sufficied for mgmt. presentations and preliminary rounds.

Working for a firm focused on transformation and operational improvement / complex situations, not being able to go on site / meet management has made it difficult but nonetheless this was off the table from March - May (Europe-wide). We have since June cautiously resumed, but avoided hotspots and declined several meetings if safety could not be safeguarded. We've also included our prudence/approach to diligence in our letter of intent regarding to site visits (e.g. we will proceed in a fashion to not expose you or your employees to unnecessary risks).

Everyone has their own approach, I suppose.

LBO-modeling companies on a Corona-adjusted normalized proforma run-rate EBITDA basis since 2020.
 
Aug 30, 2020 - 12:26pm

A lot. To each their own of course, but we tend to bring our advisors to site visits (i.e. the operational or commercial experts). Beyond that, it helps massively to have brief "chats on the side" with management or even employees (e.g. culture, internal politics, less evident issues, etc.). Also, the state of facilities & bathrooms and other small things like that will give you a decent indication on "how much love" the place has had.

 

So I disagree and think it makes a LOT of sense to see them - but as you suggest, bring the expert and get their informed opinion on how it factors into capex or improvement plans. Beyond that, presenting to an IC without having seen and touched the business...I work for a firm of detail-oriented people who are hands-on investors - getting into the mud with the management team and seeing sites/factories/work floors is just part of that. Equally like you can outsource the rest of the investment process...we have that choice but in the end its down to firm culture & personal preference.

 

Hope that helps! Everyone has their own style though. 

LBO-modeling companies on a Corona-adjusted normalized proforma run-rate EBITDA basis since 2020.
 
Aug 11, 2020 - 5:08pm

2 stories:

  1. My MD has been doing Lunches and dinners with all of his clients a few days a week. These aren't deal meetings. These are client development meetings. Like good thinking ass hole. All those guys are going to pay you so many fees when you or them are fucking dead from COVID.

  2. One of our clients is based in Texas/Florida. A few months back, when all of NYC was shutdown but that state was open for business, My MD was trying to organize an in person meeting in Texas/Florida. Not in so many words, but I basically told him that if he thought my analysts or I were going into the office to hand bind books during COVID that he was out of his fucking mind (obviously was more polite). Luckily, the meeting never happened

As an aside, We put a sell-side on hold in late march because the bidders didn't want to write a $600mm+ check to a management team they'd never met and the management team we'rent trynna do meetings during COVID

 
Aug 22, 2020 - 7:56pm

I feel like this is a bullshit post. I’ve been working on several processes (I’m on the buyside) over the past 6 months and no one is telling us to meet in person. Even the banks themselves have severe travel restrictions, at least the middle market ones I work with often like Blair, Baird, Lincoln, HWilliams, etc. They themselves aren’t even allowed to travel, I can’t imagine the bulge bracket would have looser restrictions.

 
Aug 27, 2020 - 1:51pm

maybe its a ploy to get "rid" of the older senior bankers so that younger associates/analysts/VPs can snag the spot for top branch. 

Would be pretty funny. Covid is kinda a bummer but at least you can sleep in and dive into sugar u kno?

Start Discussion

Total Avg Compensation

September 2020 Private Equity

  • Principal (6) $693
  • Director/MD (14) $640
  • Vice President (52) $364
  • 3rd+ Year Associate (60) $272
  • 2nd Year Associate (112) $246
  • 1st Year Associate (241) $222
  • 3rd+ Year Analyst (23) $162
  • 2nd Year Analyst (52) $141
  • 1st Year Analyst (149) $117
  • Intern/Summer Associate (16) $67
  • Intern/Summer Analyst (165) $60

Leaderboard See all

1
Jamoldo's picture
Jamoldo
98.3
2
LonLonMilk's picture
LonLonMilk
98.3
3
Secyh62's picture
Secyh62
98.2
4
CompBanker's picture
CompBanker
97.8
5
Edifice's picture
Edifice
97.6
6
redever's picture
redever
97.6
7
Addinator's picture
Addinator
97.6
8
frgna's picture
frgna
97.5
9
NuckFuts's picture
NuckFuts
97.5
10
bolo up's picture
bolo up
97.4