Junior Bankers Sourcing Deals
Curious to know if anyone here at any type of bank has had a junior banker bring in business (not someone who was super connected or anything) and how the bank treated his/her comp. Has anyone seen this happen? If so, was there any kind of special intro fee or sourcing fee awarded to the junior?
I did this on a couple deals in growth equity and got top bucket pay but nothing special. At most banks it's going to be pretty similar because you are placed in buckets of permorfmance and after getting top bucket, they don't create some special new category just for you. Might move up faster, but that's about it.
Gotcha, this is good to know. We had a junior who bought in a deal totally on merit (ie non-family related connection) so we are trying to figure out how to treat the situation comp-wise as it was actually a sizeable deal which was very commendable. I am thinking we will just pay a separate bonus in addition to top-bucket comp (the junior is a high-performer as it is) which is a percentage of the fee we bought in. It doesn't seem to be the norm but no harm in rewarding a good sized piece of business.
For those wondering the junior tapped a friend who was a principal at a MF and plugged our firm hard off the books (which means we weren't treating him that poorly :p)
This is not worth it as a junior, even if you already have the connections (family business or something similar). You won't get any fees, likely well paid for your class but nothing special. Your MDs will take the relationship and the fee without hesitation.
If you want to do sourcing get into a PE role where it's part of the job and you're rewarded for it (comp/promotions)
I partially agree. On the other hand, it also depends on how your bank structures teams and how generous your MD is. See my comment below.
I fully agree with the above. Unless there is some arrangement with the firm that you will get paid a certain % of the fee, senior people will take credit, get paid and obtain the relationship. Speaking from experience: would not recommend.
I have a friend that works at a tech boutique and sourced two tech deals from fraternity connections. He walked out with close to 400k as an Analyst 2 that year. I’d say that it depends on the structure of the bank. At MMs and BBs comp is pretty set, so you’ll probably get some praise and top bucket comp, but that’s about it.
Well yes but I meant more at banks with very standard pay scale ie the bulges/MM/EBs.
My question was more if you're at one of the three types of firms I mentioned above and an analyst (or associate or even VP) who isn't a nepotism hire happens to source a deal, how does their comp change if at all? Seems like you're saying the MD would collect all of it but does the junior who sourced not even get a slight bump? Thanks for the thoughts
Seen Directors do it at some HC boutique banks. Tend to be smaller deals than what senior MDs brought it. Unsure if I've seen it at VP or lower.
I work at a boutique, and any employee can source a deal for the firm and get 10% of the fee.
We have the same system except at my firm we get ~4% of the fee. Anyone can source.
I work in China Mainland / Hong Kong so take my words with a grain of salt as relationships probably matter more here.
In a nutshell, yes I see it constantly. In fact, as a junior coverage banker, reaching out to potential clients is a MUST for me and my coworkers.
I'm in what bankers here call a "China team", which is basically the country/geographic coverage team inside banks (my bank is a well-known big bank in China, although not necessarily well-known in US or EU). We cover all sectors. Since the Chinese market is IPO-heavy, deals are mainly IPOs.
My VP is a 28 yo woman whose family has a ton of high-level resources. She pulled in a very big deal for the team and she got a big payday. She also got promoted to VP within 3 years because each year she (or her family more precisely) managed to pull in a deal for the bank.
Deal size: prefer companies with potential market values hitting billions or hundred millions HKD.
Sourcing cut: no clue. Won't be higher than 10% of the underwriting fee, which is not a lot if the offering is not big.
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