The Truth About IB Headcount in 2021

Intern in IB - Gen

Looking to get some solid and definitive answers on headcount in 2021 and internship conversion rates this summer.

It seems like everyone thinks significant cuts are coming and that IB revenue is getting slammed but I'm not sure either is true.

Anecdotally I've heard of many groups getting slammed right now(Not just Rx but coverage, DCM, convertibles, even M&A).

After taking a look at the facts (per WSJ IB Scorecard), current Q2 IB revenue (global) is $12.6bn, which is on pace to match Q2 2019's IB revenue of $19.8bn. (Note: Q2 2019 was the best quarter of the year)
The slack from M&A is being picked up by DCM and ECM.

Do any current bankers have any insight on 2021 headcount and Summer 2020 retention rates for US BBs and EBs?

Comments (58)

  • Analyst 2 in IB - Ind
May 28, 2020

Offer rates won't be known until the end of the summer. I know my firm hasn't changed SA 2021 headcount.

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Funniest
  • Analyst 2 in IB - Ind
May 28, 2020

Upper/Middle/Lower isn't a thing, so stop. I'm at a BB.

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Controversial
  • Prospect in IB - Gen
May 28, 2020

DB or UBS?

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Most Helpful
  • Analyst 2 in IB - Ind
May 28, 2020

Neither. Spoken like a true prospect.

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May 29, 2020
Prospect in IB - Gen:

DB or UBS?

Gonna intern at U~P~S my dude? So cool

    • 1
May 30, 2020

what does . mean?

Array

  • Analyst 1 in IB - Gen
May 28, 2020

Bro how are we supposed to give you "definitive answers"? There are so many unknown variables here. Anyone telling you they can point to a specific retention rate is lying to you.

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  • Intern in IB-M&A
May 28, 2020

FYI the WSJ league table is p out dated most of time - I used to check them every day and they usually update once every two weeks or even longer. If you have Refinitiv that should be the go to for league tables.

  • Intern in IB - Ind
May 28, 2020
Intern in IB-M&A:

I used to check them every day

Hardo alert

    • 29
May 29, 2020

This guy fucks

Vincet Voluntas - Will shall win

May 28, 2020

M&A for my sector has been very busy at my firm.

  • Intern in IB - Ind
May 28, 2020

Healthcare it is

    • 1
May 28, 2020

Yep

May 29, 2020

... or anything technology, especially software?

  • Intern in IB - Gen
May 28, 2020

Any word on how the deal flow has been at EBs like Moelis, Evercore, PWP, CVP, etc? Do people think they're gonna reduce headcount for incoming FT class due to covid?

Currently at a BB potentially looking to lateral over to EB FT so wondering if the prospects are dim there. Any advice helps.

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  • Analyst 1 in IB - Restr
May 28, 2020

Moelis here - not lacking on deal flow between a ton of restructuring and cap markets work (PIPEs, rescue financing, etc.) - M&A is variable based on industry conditions. Headcount expected to be flat, but take with a grain of salt because of how variable the industry is.

Broadly would not worry about any of the EB's you mentioned.

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  • Analyst 2 in IB-M&A
May 28, 2020

Have your hours gone down? I'm at another EB and ours have gone down somewhat despite the uptick in restructuring.

I know Moelis has gotten on some pretty good engagements this past month or so.

  • Intern in IB - Restr
May 30, 2020

Heard this for another EB as well

  • Intern in IB - Gen
May 28, 2020

Same position as you, looking to lateral to an EB FT. Anyone comment on Greenhill/Gugg/PWP? Hear these firms tend to take on more FTs but will probably change this time around.

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May 28, 2020

Feel across all my friends in the industry, it's just too early to make these type of decisions. We're all planning for relatively similar sized summer classes (but because of the rolling nature, we could just hire less in the fall). Market is back up and if the world does continue reopening slowly, don't think there'd be a meaningful cut in headcount, especially on the junior side. Maybe 10%?

    • 1
May 28, 2020

I'd expect a material decline in IB revenue in 2H20.

  • Company's frontloaded DCM/leveraged loans/regular loans in the last third of 1Q and the first half of 2Q to preserve liquidity. Banks floated the F1000 when all the CP markets dried up and got big fees and wide spreads for doing so.
  • To your point about M&A, M&A volume might pick up but dollar volume will likely be down because mega-mergers aren't super well received optically by regulators in recessions and share exchanges are less profitable than financing packages.
  • The IG corporates (and others) that the BB's and EBs bank have capital structures to maintain and a lower margin for error on execution than they did before because they're levered to the teeth. It makes more sense for management to focus internally than to do anything transformational

As far as headcount, idk. I haven't heard of too many cuts on analyst/associate levels. VP's are the targets right now. My assumption is that junior headcount will be be pretty normal with some people transferred to Rx/workout groups internally. Bonuses on the other hand will be hammered.

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  • Associate 2 in IB - Ind
May 29, 2020

Agree with all of your points outside of #1. There was very limited activity in the loan market from 2nd week of March until mid/late April.

The loans getting done in that timeframe were only for well capitalized businesses (taking adv. of low rates) and emergency liquidity. Our Lev Fin team was busy af, but it was a lot of prospecting activity vs deals getting done.

Our firm put a ton of m&a deals on hold. We are starting to see y/y weekly activity return to normal with our clients so I'm optimistic that some of these will close towards the end of 2020. There's a massive amount of dry powder that's just sitting on the sideline. Multiple will compress, but I still think m&a activity will return to normal in 2H2020 given the pent up demand

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May 29, 2020

I'm still in college so correct me if I'm wrong but I don't think multiples are technically going to compress if we're talking about current earnings. Earnings are way down across the board, so while values may be going down, multiples are staying constant and maybe going slightly up.

Array

May 30, 2020

Even if things start picking up in the second half, there's only about a 1 quarter window to get deals done that would count towards the current year since the 4Q deals will most likely generate fees in 1Q 2021. My opinion is 2020 is going to suck, but look on the bright side, the improvement in 2021 will look great year on year!

May 28, 2020

Shuld I leave IB because my class is definitely not getting a bonus next year...

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 29, 2020

damn dude, rip ftp, yall work too hard to not get bonuses

Array

    • 1
May 29, 2020

Should I leave then? I mean I've closed a few deals already so probably easy to find better opps.

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 29, 2020

Straight from my MD's mouth but he was completely guessing: "I think next year the class probably gets cut in half or by a third"

  • Intern in IB - Gen
May 29, 2020

If you're talking about 2021 SA, what about FT offers for 2020 SA?

May 30, 2020

F

"Markets can stay irrational longer than you can stay solvent."

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  • Prospect in ER
May 30, 2020

not looking good at boutique banks right now

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May 30, 2020

Look as of now, you can bet that headcount will be lesser given less banking activity. There isn't much else to say in terms of the banking hiring mandates here... if they have more transactional activity they will hire more but if they have a decrease in dealflow, they will hire less.

May 30, 2020
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