Investment banking is being physically annihlated
Guess what the top hiring job at Goldman Sachs is now?
Programming.
After that, trading.
After that, m&a (which is going to crap due to stuff like Axial)
Investment banking is obsolete, people are realizing that they are overpaying for a zero skill sales skillset and over the next few decades the field will be totally automated, indianized and deskilled like everything else.
That's the point really, sales is low value added work at the majority of companies. And the minority where it is prized are really based on selling the entire idea of it being prized, rather than anything useful, like IB.
Google m&a pays near teenagers 80k salaries to write some reports on a company, so a vp- who only makes as much as a ib VP, but runs an entire department at Google- can write a quick email to order millions more be thrown away at a tiny tech acquisition. The dumbness and mindlessness of tech m&a is undermining the justification of investment banking, and tech companies are gaining on banking faster than VHS over Beta.
And for the smaller areas, where IB might be useful, complete automation is a valid possibility. If you're going to be spending under a billion dollars in a deal with a 1% commission, your managing director is pocketing a huge part of the sum. Companies are realizing small deals are not important and are giving them to Axial, which is some mechanical elves in Bangladesh paid ten cents an hour to automate m&a. If you can do it faster and cheaper, with easy computer interfaces then that blows dealing with a Harvard PhD who speaks a different language from you out of the water.
So from both ends, m&a is screwed for opposite reasons and all the BB are being competed down by EB, who are in turn the most vulerneravle to automating the expensive small deals.
lol
Sorry to hear you were dinged during recruiting but there's always compliance.
No we dont need anymore bitter people in compliance. Half our clients are just bitter 24/7
Why are you so bitter? What are you trying to achieve with your posts these c. 2 years now? Is WSO paying you to create absurd and pointlessly controversial posts?
Did you want monkey shit? Because that's all you're going to get out of this post on an IB forum.
I actually got a net gain in rep
Welcome to the real world. Academics isn't everything. Soft skills matter and can translate to money. You may think two robots being programmed to talk to each other about a deal is cool, but it simply isn't happening.
M&a is being massively automated or gotten rid of entirely, apple actually buys GS bonds now and not the other way around. Tech has prestige and family offices and boutiques are taking care of mundane capital needs. Revenue in ib is hardly growing despite strong economy.
Maybe for your business brokerage, but not for legitimate banking. It's never been busier.
-"M&a is being massively automated or gotten rid of entirely": Can you give some examples of M&A automation? Spent 1 year in M&A and I really wish things were more automated. Maybe automation would mean fewer Analyst spots and no need for interns making company profile slides, but these tasks are super mundane anyway..
-followed with "apple actually buys GS bonds now and not the other way around": This has nothing to do with M&A first of all, and nothing to do with automation either. This has nothing to do with anything in fact. Why would Apple buy GS bonds if they thought the bank was failing? Or are you suggesting that "hey, look there are companies out there making more money than GS" (ofc there exist other successful business models)?
-"family offices and boutiques are taking care of mundane capital needs". What?
If there was a Marketing or PR community or even a forum for all the non-CS-related professionals as Google (Google has been primarily a sales machine btw, that's what made them successful), would you also go there and tell them how useless they all are and how they'll all be replaced? Where are you going with this?
please, help us put our life on track
I don't think many traders being hired at Deuteche Bank...
Yes one failing bank clearly indicates that the entire industry is gone forever.
was a joke
Axial is not replacing M&A at the levels that many banks in the BB/MM space operate in. That is legitimately wrong. Axial is a great tool for early stage, LMM companies, as you would know if you looked at their fucking website. However, EB/BB/stronger MM don't even operate in this space. Also, trading is most certainly not hiring as much as IB and will suffer much more due to automation, unlike investment banking. Like honestly think before you speak next time and maybe you'll land the job you're trying to convince yourself you don't want.
Trading was hiring just at Goldman, and I doubt it will last.
For the large cos you're talking about, m&a is almost out of the picture. Not only is there nothing to acquire- five companies control half the stock market- all them are tech cos that have massive m&a departments and throw billions away carelessly without needing advice.
Tech is killing everything and making all ib services redundant except in marginal sectors.
I genuinely disagree with your comments about M&A. For example, how can you say there is nothing in the market left to acquire when Morgan Stanley (a large bank) is advising BMS on their $74BN acquisition of Celgene. I'm sorry but I thought that was big M&A, and I would not consider BMS and Celgene, two massive pharmaceuticals cos, being in "marginal sectors."
lol this guy is clueless.
"There's nothing to acquire" "Throw billions away carelessly"
This is a joke. Have you ever executed one M&A deal before? You think those five companies are the only active buyers in the marketplace? Have you ever heard of PE? Are you aware of the amount of due diligence (and $ millions spent) that goes into every M&A transaction? I'll stop here.
lmao
Try to understand how and why automation works: It results in software/ machines doing low value-add work that would otherwise have to be done by an expensive and highly educated human.
Until investment banks can get away with paying their analysts $5.00 / hour to create working group lists and $100 / hour to write CIMs, build complex models, and do other work whose marginal value actually is $100 / hour (or more), automation is going to be welcome by everyone, top to bottom.
And since we're talking about a 2 year job, for analysts at least, they are entirely rational to not worry about automation. Any jobs it eliminates (which probably will be zero actually) will show up in a smaller headcount in the next analyst class, not cuts to the current one.
Lol my response keeps getting delete
I added more to the op but really, it's not just automation, the entire model of IB m&a is going away due to diminishing returns, regulations, and the fact that the small m&a deals that are growing most rapidly are also the ones where expensive managing directors are not worth it.
From a technology standpoint - automation does not equal perfection.
M&a was always a waste. Now companies can waste less time wasting money.
Instead of basing decisions on some vague subjective crtieria a Harvard PhD learned that nobody else can understand, now companies can just go to a robot (axial) and hit some buttons to get what they actually wanted based in objective computer established criteria.
It's like how foreign exchange is automated, even when it doesn't need to be- it doesn't matter that there is all this complexity and illiquidity, companies just want some simple, measurable criteria that they can account for and justify.
Does your Buy Side role have a position in Axial?
Axial is private and no I'm not a schill I am just using it as a convenient example.
I'm really not saying this to be snarky, but it is somewhat telling that your grasp of investment banking is so poor that you think a buyside investor cannot possibly have a position in a private company.
So m&a is being automated, but not trading? Interesting...
Trading fundamentally requires technical skill.
Sales requires, you know, sales ability.
One is more common than the other.
Interesting how you say that but yet you have failed to use your "common" sales skills to convince us that IBD is going to disintegrate soon.
It must be some quality pot if you think that, haha.
Look at how outdated Axial's website looks http://www.axialtechnologies.com/# . No way they are going to overtake the entire M&A industry...
LOL that's not the website, but it would be hilarious if it was.
You are probably right insofar as it’s getting worse, although hard to quantify the rate that is happening
It won’t disappear because CEOs and CFOs like having someone to flesh ideas with during the biggest moments / deals of their career
This could be an interesting structural short on a boutique with a lot more research and conviction
More research? It's literally Marxism, m&a is inherently non sustainable because once you merge everything there is nothing else to merge. Boutiques are winning because they do the smaller marginal deals, but that's the same process of diminishing returns that is pushing BB down. The combination of automation and lack of non monopolistic m&a remaining is both harming their business and deskilling their employees.
Marxism wins, Hitler will rise again.
checkmate friedman
On the moral kritik: 1: discussion is whether bb-assisted m&a continues or not, not whether it’s good for society at large 2: to extent morality is something we are discussing - Can fix by supporting m&a as ironic rallying pt so ppl realize ultra consolidation is bad, so the gov enacts more policy against it 3: surely some consolidation is good; how do you pinpoint the right level
On the “eventually nothing left - all single entity” point A: new businesses come B: big businesses restructure and split C: I’m too lazy to quantify a and b vs consolidation D: to extent this matters, id guess it’s so far in the future that those cash flows don’t matter
People keep feeding this troll
Do you think portions of consulting will be automated soon? I'm just a curious college kid btw not a troll.
Nontech consulting will be physically annihilated
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