Houston Investment Banking 2019

Klaud45's picture
Rank: Senior Monkey | banana points 79

Wanted to start a discussion and get some opinions on the current state of banks/boutiques across Oil and Gas/Energy, especially since DB recently closed down its Houston office. I've heard that, as far as the BBs go, Barclays and Citi are considered some of the best for O&G, over GS/MS.

EBs like Evercore are quite strong in this space, apparently, and Jefferies/TPH are very strong in MM.

Anyone have any insight on what the different groups are like? Curious to know about the different cultures, deal flow, pay, etc. Hoping to recruit for a post-MBA Assoc role starting this Fall.

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Comments (66)

Feb 1, 2019

In the energy space, Jefferies is far from MM. They did like a ~7.5bn deal in September. CS is also up there in dealflow alongside Barclays and Citi. In terms of pay, I'd say TPH, Jefferies, and Evercore will pay the most. Prestige not sure. In terms of culture for juniors, TPH, RBC, Evercore, UBS, and Simmons seem to enjoy their time spent.

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Feb 1, 2019

What about Lazard in Houston?

Feb 1, 2019

Only know one guy going there (hasn't started yet), so can't give an informed answer tbh

Feb 1, 2019

they did some RX work during the '15-'17 time frame

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Feb 1, 2019

Lazard Houston is supposed to have a great culture.
Unfortunately it seems like they are in a bit of a tough spot and have lost a lot of their mid levels to other banks.
My feeling is that their setback has created growth for Moelis and Greenhill who are filling the spot where Lazard used to be, both investing in growth (and both took people from Lazard). The top EB's in Houston are still Evercore and TPH(PWP) but from a post MBA associate I would also advice to find a place with the right cultural fit, two years in the wrong spot as an analyst can be tough, but when you are stepping in as a career banker my priorities were different than just looking an prestige and deal flow.

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Feb 1, 2019

I'll second that LAZ Houston's dealflow has dried up significantly. Moelis has been steadily building out their Houston practice but has been killing it on the restructuring side. Greenhill's overall Houston presence is pretty nonexistent. EVR and TPH are still top in Houston.

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Feb 1, 2019

LinkedIn shows that Greenhill has 10 people in Houston. If that isn't non-existent, then I don't know what is.

Feb 5, 2019

Greenhill is building up the team but heard it's a dead shop in terms of the deal flow. They hired 3 MDs during last few months from Laz, MS and RBC but they haven't brought on much yet. The caliber of junior team is very strong from what I have heard so exit opportunities are amazing. I think they have sent people to First Reserve and Quantum in the past. Associates have lateralled to EVR. They have a good restructuring team for the downturn but based in NY. Culturally, I am told that while hours are better than other elite boutiques, people are generally very difficult to work with. ####

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Feb 1, 2019

Culture over there is good. They really like to hype up their restructuring group. But I honestly couldn't name a single deal that they've advised on recently. Evercore, Jefferies, TPH, and Simmons (but only if you work on the OFS desk) usually gobble up most of the boutique deal flow in Houston.

Feb 1, 2019

Agreed, and labelling TPH as "MM" is also very misleading. They worked on 3 out of 4 of the largest upstream corporate M&A deals last year (excluding BHP as that was technically an asset deal).

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Feb 5, 2019

What about placements? Any insight?

Work hard, work clean, & most of all do not give up.

Feb 1, 2019

Thoughts on Morgan Stanley's energy group? They seem to have strong dealflow, does anyone know how large their summer analyst/associate classes are?

Feb 1, 2019

Would rank the BBs as such:
1a: Citi/Barclays
1b: GS/MS

You honestly can't go wrong with any of those places from deal flow perspective. Culturally, they're certainly different.

Edit: Would also through CS in there somewhere as well, depending on what you're looking for. They've been known to curb stomp the competition in O&G ECM, but I'm not sure about how strong M&A advisory deal flow it.

Feb 1, 2019

If you are interested in working sweatshop analyst hours (or worse) in exchange for a ton of deal experience and unreal comp (caveated, as that will likely come with a clawback structure), Jefferies should be number one on your list. I believe your chances of breaking in will be tougher there as there seems to be somewhat of an innate bias to recruiting A-to-A (whether that's internally or from other top energy groups). You should tread with caution, as earning the "respect" of analysts and fellow associates as a post-MBA hire at groups like this will not be a straightforward task and could prove challenging if you aren't able to pick things up very quickly.

If you want a slightly more "reasonable" work-life balance while getting a well-rounded experience as an MBA Associate and enjoying the benefit of a brand name, I would suggest CS, JPM or MS. Barclays and Citi can be a hit or miss depending on what you get staffed on / who you primarily work under at the senior level, but are still good places to end up generally speaking. GS Houston (as evidenced by other recent threads, one of which may have been deleted) is no stranger to significant cultural issues. I would be sure to do your own due diligence via networking with former analysts/associates/VPs who would be willing to speak under some degree of confidentiality. In my personal opinion, going to TPH or Evercore would likely serve you better if you want to be involved in the energy M&A space long-term and don't mind putting in longer hours.

Don't know much about how things are going at RBC, WF, BMO from a cultural standpoint at the moment but I would assume that the hours will generally be slightly better than the names mentioned above. Simmons focuses primarily on OFS -- heard pretty good things about the culture and hours there although deal flow could be a hit or miss. I would stay away from Lazard. I think Moelis is a better bet between the two (non-Evercore EBs).

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Feb 1, 2019

SB given. I would also add WF Houston seems to have some brutal hours but comp and culture makes up for it. From talking to ppl there, overall seems to be a good place to be. Quick LinkedIn search would also show Upper MM PE exits have been strong

Feb 1, 2019

I would echo the sentiment on WF as well. Seems to fall in line from what I've heard from a post-MBA Assoc. there.

Feb 1, 2019

Great stuff.

What are your thoughts on BAML?

Feb 4, 2019

I've heard that Evercore hired a lot of people recently, particularly associates, so hours have supposedly been much better (almost easy) the past year

Feb 1, 2019

Do you think that trend is going to continue (are they looking to expand in Houston?), or was it a one-off thing?

Feb 1, 2019

Depends on what happens to commodity prices which in turn highly correlates to deal flow. I suppose their RX group acts as a hedge against this (not sure if the Houston office handles it though). However, Evercore and Jefferies are probably the top two boutiques in Houston, so when times are good (e.g. depending on what you think is going to happen to prices and deal flow in the next 6-12 months), they feast.

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Feb 1, 2019

How is RBC's energy group? I've heard that culture there is good, but what about deal flow, exit opps, etc?

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Feb 1, 2019

Energy being highly capital intensive, they use their balance sheet to their advantage. Can't speak much about their advisory presence. Although, they have the nicest office I've ever been in.

Feb 1, 2019

NY or Houston office?

Feb 1, 2019

Houston

Feb 1, 2019

Weak exit ops. Not sure on culture.

Feb 3, 2019

Is it a better than a place like UBS right now?

Feb 1, 2019

I would say yes on account of how the total company is doing and on headcount.

Don't know much about UBS Houston, but it looks like a significant amount of people have lateraled in recent years to other banks.

Can't name a recent advisory deal that UBS has worked on, besides Nustar / Navigator in 2017. RBC has done higher quantity of smaller deals across midstream and upstream.

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Feb 1, 2019

Many people did leave over the past few years, but they have made an effort to increase headcount. LTM alone, I believe they poached a Deutsche MD, Barclays MD, and Citi director.

Feb 3, 2019

How about over WF?

Feb 1, 2019

UBS < RBC < WF

Feb 3, 2019

What's the justification? I heard UBS had major turmoil in Houston over the last year.

Feb 5, 2019

Maybe he meant the < to be less than signs? Thats how I read it at least.

Feb 1, 2019

Correct. Sorry for the confusion. Meant to depict it as

  1. WF
  2. RBC
  3. UBS
Feb 5, 2019

I know Moelis was touched on earlier, but does anyone have any more info regarding the experience at the junior level, how big their office is at the amongst the analyst/associate ranks, and, well, just generally how the Moelis Houston/energy platform is doing?

Thanks!

Feb 5, 2019

General Moelis experience from a junior's perspective is great. You're a product generalist so you get exposure to M&A/Rx and other product groups. You work hard but you learn a lot.

For Houston specifically, they're obviously not as well established as Evercore or TPH but they've been making moves to build out their practice and it's been working. Over the last few years, they've poached MDs from a lot of the more established shops. As a bank, they've got strong ties to the Middle East and as far as I understand it, run all of the major energy deals out of Houston. ADNOC strategic advisory and Saudi Aramco IPO (lol rip) mandates are some examples.

They don't have a lot of A&D deal flow yet (Jefferies still dominates that space). Moelis has been winning a lot of restructuring mandates in the industry though, and I think that's their bread and butter.

Good, surprisingly laid back culture in the Houston office, from what I've heard. Incoming analyst class of 5-6.

Sources: industry experience, friends at the firm

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Feb 5, 2019

Very helpful, thanks! Would you happen to know where comp/exits stack up in comparison to some of the other prominent boutiques (I.e. tph, evr)?

Feb 5, 2019

Comp is above street, don't know exact bonus numbers but could ask around.

The Moelis name obviously carries a good deal of weight and travels well. If you're looking at energy PE exits exclusively, they vary. I know a few guys went to Riverstone, but given that they're still fairly new, I'd say exits will depend more on the individual than the firm. That said, the previously mentioned building momentum of the group will likely improve exits for the next few classes.

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Feb 5, 2019

Interviewed there this past summer and adding on to that, they are trying to leverage their track record in creditor-side restructuring advisory to win more M&A mandates down the line. Also seem to have decent deal flow in midstream/downstream. Agreed that they seem to be growing quite a bit.

Use more debt than your competition or get out of the business. Any other policy is either self-limiting, no-win, or a bet that the competition will go bankrupt before they displace you. - Bruce Henderson

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Feb 6, 2019

Solid analysis

Feb 5, 2019

My buddy is an associate at TPH. Total comp is $300-350K and typical hours are 9am - 12am with Saturdays off and half day Sunday. He gets lunch and dinner comped and they have a gym at the office. Good culture with few assholes. Lots of brainpower as they get plenty of former engineers.

Funniest
Feb 5, 2019

Going to go out on a limb and assume you meant midnight and not noon.. lol

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Feb 5, 2019

Ha, definitely midnight! If too many people read that they would have a stampede of analysts trying to lateral...

Most Helpful
Feb 5, 2019

I would rank as below:
Tier 1:
Citi, TPH, Jefferies and EVR

Tier 1b:
Barcap, MS and GS

Tier 2:
CS, JPM, Laz, Simmons

Tier 3:
MC, RBC, WF, Scotia, BAML, UBS

Tier 4:
BMO, Greenhill, HL, Baird, PJT (opening office next month)

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Feb 1, 2019

Where's PJT's office going to be?

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Feb 5, 2019

Barcap should definitely be tier 1 and BAML is miles better than the other banks in your Tier 3. CS is also stronger. MS should be a tier down and Lazard should be bottom tier.

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Feb 5, 2019

Barclays was Tier 1 but haven't been active lately.

MS had a killer year, were on multiple corporate m&a deals. Heard people got paid well this year.

CS is more ECM focused and equity markets are shutdown.

Don't know much about Baml to be honest but haven't seen them on any deals last year except BHP which Barcap was leading

PJT is opening an office in Houston

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Feb 1, 2019

SB'd - agree with all points above, except maybe MS. Maybe I'm not as up to date on their deal activity in the last ~6 months, but historically, they've had a pretty strong group in Houston.

Feb 5, 2019

Is it in term of exit opps or?

Feb 3, 2019

In regards to the next 3-5 years, how to see this table shifting?

Feb 7, 2019

Anything official from PJT yet?

Feb 7, 2019

I mostly agree with this, but would also probably move Barclays up and definitely move Lazard down.

Would also put Guggenheim on there in tier 4. They have a new office in Houston that is pretty small, but I have seen them on a few things this past year.

Feb 11, 2019

WSO = GreekRank

Feb 6, 2019

anyone have info on Stifel's Houston office? only about 2-3 years old, looks like a few former CS and jefferies guys based off quick linkedin search.

Feb 1, 2019

Most people wouldn't be aware of them even existing. Haven't seen them on anything ever.

Probably doing very small cap mkts and advisory A&D.

Feb 5, 2019

I've had a couple out-of-mandate pitches from them come my way.. E&P cap raise, downstream services, etc.

Feb 3, 2019

What does PJ solomon's Office in Houston typically do?

Feb 20, 2019

A&D

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Feb 11, 2019

Howdy Houston folks,

Oil & gas engineer turned consultant here. Heading to an M7 business school this fall.

I'd like to move back home to Houston after school, and head into the finance sector. I've networked with a few of my school alumni and those from other schools who work/have worked in energy banking....and have heard a wide variety of opinions.

I've heard horror stories in Houston ibanking...2 people from 2 large B.B. say the MDs are old school: showing up to work in Louis Vuitton brief cases and gold rolexes (very 80s oil heh?) and work them just for the sake of working them..."power moves" to put the ivy MBAs in place. ???? Sounds ridiculous?

Questions for y'all:
1) what's the general word on the culture at many of these banks? Any personal anecdotes? I'm honestly trying to gauge my next steps. While I invite hard work (have pulled many 80-100 hour weeks), a toxic culture is something I would want to be aware of.

2) which banks should I target? A lot of the formal events are in NYC for banking recruiting....curious how I pivot to Houston from there?

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Feb 11, 2019

No offense to your sources, but that sentiment makes absolutely no sense and clearly is coming from people who either a.) Didn't pay attention to culture while recruiting, got burnt by banking and are bitter, or b.) Have absolutely no clue what they're talking about.

Just to think this through - how would a more competitive recruiting culture lead to better office culture? I have heard wayyy more horror stories coming out of NYC when compared to Houston. The recruiting process is extremely competitive regardless of location - and either way, it doesn't make sense that a more competitive recruiting process would = a less cutthroat office environment.

The culture of banking does significantly differ between NYC, SF and Houston. Think about how different the cultures of each city are in general, outside of finance. This is what determines the difference in banking culture - not some myth about the "competitiveness" of the recruiting process. I'm sure you've spent at least some time in each of these cities or at least know people/the type of people that live in each, this is what drives the banking culture. Once you decide which culture you fit in to best, that is the city you should target.

Lastly, the culture within a city from bank to bank differs A TON. That's why it's almost ridiculous to say any city even has a "banking culture". Your experience in any city, whether good or bad, is going to be almost entirely determined by how well you fit in with your group. With your background, you could probably break in to Houston investment banking with bare minimum networking - just being real. But the only way you're going to avoid ending up in one of those "horror stories" is by networking your ass off so that you know 100% that you are ending up in the group that you fit in with best. I know people at every bank in Houston and can say that there are some really incredible groups that care about their analysts' success, and some that are absolute sweatshops and run their analysts to the ground knowing they are jumping ship as soon as possible. Both suit different types of people - it's up to you to decide what you want, and to network enough to identify where you fit best.

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Feb 11, 2019

Hey!

Thanks for your input, and for taking the time to respond. I really appreciate it. I always try and take an objective stance on any feedback I get, and I have networked with a few folks who have some very positive opinions.

What's the best way to learn about:
1) which banks are involved in which type of work? (OFS vs. E&P, etc?) Just pure networking?
2) The environment and culture of the different banks?

Anyone have a guide to the Houston banks and what they each focus/specialize in? If not, no worries. I can make the rounds and grab coffee with folks.

Thanks again y'all!

    • 1
Feb 1, 2019

I can't tell if this post is a joke.

80-100 hour weeks as an entry level oil engineer at a desk? I've never met one that's worked more than 50 hours.

Feb 11, 2019
high hopes:

I can't tell if this post is a joke.

80-100 hour weeks as an entry level oil engineer at a desk? I've never met one that's worked more than 50 hours.

1) I'm in consulting now -- long hours + travel
2) when engineers (even entry level) go into the field, or onto rigs, we work 12-16 hour shifts for weeks on end. The hours add up.
3) I spent many weeks in the field over the years

Post isn't a joke, I'm honestly curious and considering whether or not Houston banking is where I want to spend my life

Feb 20, 2019
Feb 15, 2019

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Feb 20, 2019
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