Investment Bankers Gonna Bank

Covid was a funny time for investment bankers - from the Goldman Sachs analyst memo to Jefferies analysts riding free Pelotons, for almost two years, bankers young and old worked out of their (or their parents') residences. They ran Zoom calls at all hours of day and night, conducted remote due diligence sessions and won new deals without ever leaving the comfort of their own homes.

When Covid restrictions lifted, many bankers were slow to return to the office. Banks tried free lunches, hybrid work schedules and eventually threats to coax their bankers to return. In the end, junior bankers returned to long hours and free dinners in the office, and senior bankers got back on planes, quickly re-achieving their premier airlines statuses.

On the one hand, one would expect that investment bankers would have learned something. Wasn't the efficiency of a 10-12 hour day of back-to-back client calls and executing transactions without a single in-person interaction the ultimate victory? But on the other hand, let's face it, bankers gonna bank. The investment banking business is client services at its extreme - there is no hourly billing, only transaction-based success fees. Bankers must win and close deals, and face-to-face relationship development and advice are table stakes when 10-15 other bankers are doing the same.

The key takeaway is that investment banking is a relationship based business. It is difficult to scale, and therefore relies on small teams and bespoke analyses. Many would argue that a capital markets or M&A transaction is a commodity product so winning a deal is based on a senior banker's reputation and experience, and getting a deal done is based on pushing his/her team to execute as effectively and quickly as possible. Just remember, bankers gonna bank.