Quants in M&A? Is this a thing now?

There have been a ton of threads regarding automation/AI in investment banking over the past 6 months to a year. Recently came across this job posting on LinkedIn from Lazard. I'm not necessarily interested in the position but more curious on what current bankers think about this job posting?

https://lazard.taleo.net/careersection/2/jobdetail...
"The Quantitative M&A team at Lazard leverages buy side expertise and analytical techniques to offer clients unique insights on transactions, market behavior, and speculative investor positioning. Day-to-day responsibilities of the analyst are diverse and include designing, building, and interpreting robust quantitative models; real-time merger arbitrage analysis; performing in-depth research on trends in M&A; interacting with senior bankers and clients; and working closely with industry teams."

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Comments (26)

Jul 6, 2017

Interesting find. Job doesn't seem to be as "quant heavy" as other quant finance positions like strats. Still seems more of a traditional IB job than quant finance.

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Jul 6, 2017

It seems unclear how "quant heavy" this position truly is. Building/interpreting quantitative models could be very simple or very complex.

Jul 6, 2017

Rest in peace non quants your jobs will slowly be taken over..

...

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Best Response
Jul 8, 2017

no, rakesh. It's not because the quants are taking over that you'll get an IT job at goldman

    • 13
Jul 8, 2017

rekt him so hard he deleted his account name

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Jul 9, 2017

I would actually say the contrary, Rest In Peace QUANTS, taken over by automation ;)

Jul 6, 2017

I personally think it's pretty open-ended but I guess they want to start moving more into the quantitative field.

What I don't understand is how it's quantitative if it's M&A IB... It sounds like the job of a business analyst or a data scientist, not so much IB M&A...

Jul 6, 2017

That's the interesting question, I suppose. Solving seemingly non-quantitative problems with quantitative techniques is something I have an interest in. But I'm not entirely sure that is what this position is about.

Jul 6, 2017

I completely agree, I've personally really been into data science and AI but a field like IB is very far away from being that technical. I feel like they want to appeal to more tech students but at the same time want it to be IB (I don't know if that made sense or not)

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Jul 6, 2017

I think these people are using the word quantitative pretty loosely. Lazard is not a quant shop

Jul 6, 2017

@DeepLearning

I think they used that word "quant" as a marketing gimmick to make them more attractive?

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Jul 7, 2017

Yup

Jul 6, 2017

I can't say for sure but if this is similar to some other groups I've seen then they are assessing alternative investments using specialists because of scarce private markets financials.

Think PE/VC/Growth Equity/Principal Investments where you would like to forecast returns for buyside acquisitions and financing rounds Pre-IPO etc...

This is not "quant" like you'd use it when referring to Renaissance for example.

Jul 6, 2017

Well, yes of course it's not like RenTec. I guess I was just wondering what they mean by "designing, building, and interpreting robust quantitative models" in the context of m&a

Jul 10, 2017

They're just using colorful language to say "you'll be building comps and accretion/dilution models." Laz is attempting to make the job title sound sophisticated and intelligent when it really is just a standard M&A analyst gig.

Jul 6, 2017

I think they are using quantitative analyst to make it sound sexy. This way the analyst can go "I'm a quant." It didn't emphasize any required stem background or years of experience in a quantitative field which seems to normally par the course for quantitative finance positions.

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Jul 7, 2017

Not sure but I got the feeling that they're about to start analyzing previous valuation models to come up with algorithms that can learn from those models and start doing valuations automatically. Heard of one startup doing this, can't find the name but they had received quite close valuations from their algorithms compared to the ones that the deals were done at. Probably the post is not that quant heavy, just riding that sexy title to receive attention.

But yeah, I think the valuation in M&A part can be and will be automated at some point. IB being very much about relationship business will ensure that it can't be fully automated but the grunt work will disappear at some point. Tough times for 2030 SAs.

Jul 6, 2017

Interesting. Please comment/PM if you remember the name of the startu

Jul 7, 2017

I find this incredibly ironic because the idea of using quantitative methods to "add value" to M&A is an oxymoron in itself. You can spin your wheels and run as many models as you want with varying sensitivities to spit out any permutation of values, but at the end of the day M&A is a negotiation business and any "valuation" that you perform is just to prove that you did your homework in case the deal blows up. Whatever number a quantitative model spits out may not be more accurate than a DCF done by a recent graduate if the strategic buyer doesn't see eye to eye with what the model is suggesting.

In terms of automation of the valuation process, I think this forum grossly overestimates the amount of time spent on performing valuations during a M&A transaction. If automation were to occur, the individuals responsible for processing(analysts, and associates to a certain extent) might be at risk, but because VPs and above are responsible for origination and managing relationships, those are likely less prone.

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Jul 6, 2017

Yea exactly, valuing a business is much more of an art than exact science.

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Jul 8, 2017

Sounds like they need a data monkey to look at market reactions in merger arb scenarios. Interesting but still not sure why they would need someone like that on the sell-side.

Jul 9, 2017

This is actually becoming a thing. I know someone at GS/JPM/MS who did this exact job. They talked about using machine learning, etc to provide insights on attractive LBO/Hostile Takeover targets. Seems like part of a larger industry push towards providing data driven information to clients.

Jul 9, 2017

GS quants have done this sort of work before. But the ones in India also spend the majority of their time building outsourced valuation models for some teams. I don't think Lazard is doing the same (i.e. outsourcing modelling), but yeah, the position does seem a bit shady compared to big bonus IBD.

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Jul 9, 2017

This sounds cool and everything, but I feel like the applicability of big data and deep learning to m&a is relatively limited - simply because you don't need to process terabytes of data in m&a. There are max like 20 comps you use, 200 prospects in any given buyer universe, 100 precedents, etc...

Plus, a lot of the analysis that actually matters (determining whether a business fundamentally is sound) is qualitative in nature.

There is definitely plenty of opportunity for automation, but those developments would enhance / complement the IB analyst functions rather than outright replace them.

Jul 9, 2017
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