Next job for fired MDs who didn't generate revenue?

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There's been some talk about analysts/associates/VPs who can't/don't take the next step up the IB ladder... but what about MDs who get fired because they aren't bringing in enough revenue? What kind of jobs do these MDs transition to when they're told by their bank that they're no longer welcome?

Comments (93)

 
May 22, 2020 - 1:49pm

Usually jump to being an MD at another bank. Can just lie and say that their old bank had zero deal flow. My boutique fires people regularly and this is what they say to get the next job. So much turnover but you find a job cuz you need peeps in IB, no?

Will update my computer soon and leave Incognito so I will disappear forever. How did I achieve Neanderthal by trolling? Some people are after me so need to close account for safety.
 
May 23, 2020 - 12:08pm

I've seen this happen several times too. The MD leaves the bank. Tells the next bank that they didn't have enough support or funding or balance sheet support or whatever. They go to the next bank, get paid a lot for a few years, again fail to bring in deal flow, and are then fired.

The real question is what do bad MDs after they've been fired twice?

 
  • Prospect in ER
May 23, 2020 - 3:41pm

Just interesting that a 45-50 year old guy gets another crack after being fired. I mean, I'm not saying that's a bad thing -- it's good for the MD, as I'm sure he/she can still add value. It just seems that, at that age, banks are looking for MDs who can bring in business, so it's surprising that they'd get another crack. But I guess if you can talk a good game and sell yourself, and your excuses, in an interview, not too surprising that experienced MD would get hired at new place for good amount of dough.

 
Most Helpful
May 23, 2020 - 4:02pm

Prospect in ER:

Just interesting that a 45-50 year old guy gets another crack after being fired. I mean, I'm not saying that's a bad thing -- it's good for the MD, as I'm sure he/she can still add value. It just seems that, at that age, banks are looking for MDs who can bring in business, so it's surprising that they'd get another crack. But I guess if you can talk a good game and sell yourself, and your excuses, in an interview, not too surprising that experienced MD would get hired at new place for good amount of dough.

For all the hype and hoopla and as hard as it is to get into this business on any side (buy, sell, IB, S&T, AM, whatever), once you are inside you see the number of people who are not only inept and don’t produce, but get second, third and fourth chances.

A lot of people explain away failures (that’s a real skill), others see the writing on the wall and move elsewhere before they get canned, some move teams, geographies or divisions, others decline promotions to MD (definitely see this in S&T - pay me top bucket and I won’t gun for an MD seat is a pretty common bargain many strike, while the MD gets a loyal and hopefully somewhat productive ally who won’t stab him in the back).

Others politic their way in and around to either survive, get promoted or get others fired (which saves them).

Plenty of really competent and high quality people get canned or lose their jobs. All the time. Sometimes it’s their doing. Sometimes it’s not and they are victims of a restructure, bad economy, bad year and/or politics.

That’s the game and everyone should be well aware of it. There is a reason networking and relationships are so important in this business.

I used to do Asia-Pacific PE (kind of like FoF). Now I do something else but happy to try and answer questions on that stuff.
 
May 22, 2020 - 2:04pm

I can prove I'm not a troll and at leaset I am not anon like oyrself

You could say that your firm doesn't have the brand name so you need a better brand name to get deals. If you know a firend, they can hook you up to...

Will update my computer soon and leave Incognito so I will disappear forever. How did I achieve Neanderthal by trolling? Some people are after me so need to close account for safety.
 
Funniest
  • VP in PE - LBOs
May 22, 2020 - 3:27pm

They start over again as analysts

Array
 
May 22, 2020 - 3:32pm

Move down market in banks or leave for a corporate job...CFO of Peloton was MD in Consumer at JPM. Granted she wasn't kicked out, but those are the kinds of jobs (maybe not straight to C-suite, but something high up) available with the credentials you've hopefully built at that point.

 
May 22, 2020 - 3:53pm

Got it. But as you said, that's an example of a successful MD moving upstream. I'm thinking more of a guy on the downside of the hill -- did a good job working his way up but, once at the top, not pulling his weight as a rainmaker... gets kicked to the curb... now what?

Oh wait, you said move down market in banks... but wonder how easy is that if you're not bringing business with you?

 
May 31, 2020 - 9:08pm

You're a TMT banker at Credit Suisse, you're doing ok, generating $3.5M in average revenue over the last three years, but you you needed to be doing $5M.
So you go to Berkery Noyes and if you're producing near that level at BN everyone is ecstatic and you're a rockstar. And you're probably keeping more of the comp for yourself.

 
May 22, 2020 - 8:59pm

I’ve seen a few common exits. MDs commonly “trade down” there is frequently a move from BB to MM or regional boutique. Some folks leave to industry I’ve seen exits to a VP role, a buddy who was a director at a large commercial bank’s securities arm left to a VP role at a publicly traded company, he’s now an MD at a MM. Some retire if they’ve made enough, others try and make a run of it opening their own shop or consulting firm.

 
May 24, 2020 - 8:14am

Sometimes it’s as simple as not producing enough revenue, not producing zero. An MD in public finance said the expectation was that he bring in 1MM per banker on his team, so if he had an analyst, associate, VP and an SVP, he needed 5MM. Now I think he could keep his job if he were somewhat lower, but there’s a lot of cost beyond just paying bankers’ salaries. There’s the compliance people, Bloomberg terminals and the like. If you can go solo as a municipal advisor, keep costs low and bring in $1.5MM with just an analyst and a secretary you’ll be fine.

 
May 23, 2020 - 8:43am

I would imagine ultimately they reach their level of competence or incompetence. If they can't bring in deals (primary function of the job), they won't last in any position that requires them to bring in deals. May get a second or third chance by moving firms (generally lower tier, different market, etc.) but at the end of the day, they have to perform. Some probably make a career out of switching a few times and building up enough cash along the way to ultimately get out.

Although not in banking, had a SVP type running the sales channel for a major life carrier I rep for. He was wrapped right but only stayed for two years (that's about how long it takes for corp America to figure out you're full of BS). Turns out he had similar stints at several high end companies. The position paid approx $500k so he kept that going for probably 10 yrs at different places. Probably retired now.

 
May 24, 2020 - 2:35am

For starters at a BB bank you're likely not going to make MD until you can prove you can bring in business as an ED.

That aside, if you're an MD at a BB there are TONS of exit opps. Most people are focusing on lateraling but going corporate is a lucrative path for many ex-bankers. Weather that's CFO, or running internal M&A/CorpDev, IR, etc.

 
May 24, 2020 - 4:16am

ke18sb:

For starters at a BB bank you're likely not going to make MD until you can prove you can bring in business as an ED.

That aside, if you're an MD at a BB there are TONS of exit opps. Most people are focusing on lateraling but going corporate is a lucrative path for many ex-bankers. Weather that's CFO, or running internal M&A/CorpDev, IR, etc.

For MDs, taking a corporate job is almost always a paycut. And getting a CFO straight out of banking is quite rare as companies prefer those who also have corporate experience for the CFO job.

 
  • Analyst 3+ in PE - Other
May 25, 2020 - 6:14am

Typically MD has some such of relationship over the years (working as a pimp who exhausted their analysts to provide market landscape, useless benchmarking/valuation analysis and sometimes industry gossips)

When an MD is fired, he moves to lower tier firm once or twice. Then he will join these companies to take a crappy position in corp dev that gets paid less than a senior IBD VP when the IBD options have been exhausted for them

Note: most bankers don't become CFO or COO of non-start up companies. A non-startup company's main business is its own business, not M&A, capital raising, etc

They do M&A and capital raising but these are their "side business" and they can hire someone ranked 2-3 level lower of CFO to handle these matters.

Bankers rarely be CFO because
1) They don't have operational experiences. In reality, your MD knows high level stuff that is useful for BSing but his industry knowledge / operational experience pale in comparison with a senior manager / director in a corporate
2) They don't have leadership ability / experience. Managing a few D/VP/Asso and exhausting your analysts is NOT a leadership experience. The banking model does not work in corporate. You would have been fired ages in a corporate if you work your juniors till 3am just to refine formatting and do some semantics BS revision.

Banking is a lean and abusive environment so MD does not care about how his juniors feel, how to lead hundreds of people and prioritize resources. Good luck with that in a non-corp dev position

Array
 
May 26, 2020 - 7:02pm

In my experience there are a few options. In no particular order:
1) Join another bank with a balance sheet - these tend to be the home run hitters, MDs capable of brining in a big deal, but not consistent revenue generators.
2) Join a boutique - in some way, shape, or form, the bureaucracy of a larger institution is blamed for their failures.
3) Start a boutique - typically these guys have a few relationships that will keep the lights on, and the ability to bring in deals that didn't hit the sweatspot. In a smaller firm, one or two real deals a year is all it takes to keep everyone happy.
4) Take a finance / corporate development role in industry - these guys rarely last a long time and almost always join a a poorly managed companies incapable of doing M&A
5) Fall upwards - it only takes one friend to switch from banking to investing
6) Fall into obscurity - exit brand name finance, this can be anything from owning a few properties, to day trading, to working a 9-5.
7) Join a professional services firm trying to realize some synergies with the existing practice and expand into banking - those almost never works, but PWC, KPMG, CBRE, etc all love to pretend to be investment bankers

 
May 28, 2020 - 4:28pm

TheShotgunAndTheBriefcase:

In my experience there are a few options. In no particular order:
1) Join another bank with a balance sheet - these tend to be the home run hitters, MDs capable of brining in a big deal, but not consistent revenue generators.
2) Join a boutique - in some way, shape, or form, the bureaucracy of a larger institution is blamed for their failures.
3) Start a boutique - typically these guys have a few relationships that will keep the lights on, and the ability to bring in deals that didn't hit the sweatspot. In a smaller firm, one or two real deals a year is all it takes to keep everyone happy.
4) Take a finance / corporate development role in industry - these guys rarely last a long time and almost always join a a poorly managed companies incapable of doing M&A
5) Fall upwards - it only takes one friend to switch from banking to investing
6) Fall into obscurity - exit brand name finance, this can be anything from owning a few properties, to day trading, to working a 9-5.
7) Join a professional services firm trying to realize some synergies with the existing practice and expand into banking - those almost never works, but PWC, KPMG, CBRE, etc all love to pretend to be investment bankers

I just wonder how you can work in banking up until the MD point and have to settle for (6). Working a 9-5? What does that even mean? Shouldn't you have enough savings at that point to avoid that fate?

Array
 
May 28, 2020 - 7:41pm

To clarify I meant a 9-5 more in the sense of working for the family business or something out of industry than selling paper in northeastern Pennsylvania.

The problem with the upper middle class lifestyle is that while earning, you make enough money to live well, but not enough to retire well on. Assuming an MD requires $250k to live on and maintain the lifestyle he is used to, $250k/3%=$8.3m.

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