LONDON (Reuters) – Lockdowns are sharpening the knives in the cut-throat world of M&A banking.
FILE PHOTO: An office building appears empty in Canary Wharf, following the outbreak of the coronavirus disease (COVID-19), London, Britain, May 27, 2020. REUTERS/Dylan Martinez/File Photo
Stuck at home, armed only with a phone and a laptop, senior advisors are finding out just how strong their relationships with clients really are while frustrated juniors are left to crunch numbers in the shadows, deprived of the personal access to the rainmakers who could give their careers a boost.
With the dreaded “doughnut” – or zero bonus – almost a given this year, and some banks looking to cut jobs to weather the health crisis, the strains on bankers watching multi-billion dollar pre-pandemic deals go up in smoke is taking its toll.
“It’s like a Darwinian selection,” said a senior advisor at a Wall Street bank. “If you’re a senior banker and you don’t win a single pitch you can only blame yourself. You’ve failed to cultivate your relationships and now it’s clear to everyone.”
“If you don’t know them well enough, you will never win a mandate over Zoom,” said the banker, who declined to be named.
A lack of face-to-face contact is not just exposing the shortcomings of some senior financiers, it is also making it harder for junior associates to learn on the job and progress, headhunters, lawyers and bankers said.
“Junior bankers are challenged by old problems – long hours, excessive workload and lack of acknowledgement – but this lockdown has made them more acute,” said Anna Marietta, co-founder and managing partner of headhunter Vici Advisory.
“Juniors – especially analysts and interns – can also learn through osmosis and they need physical interaction in the office. They need to see how their managers are handling client relationships and solving problems,” she said.
Global M&A volumes are down 41% so far this year, a far cry from the champagne-popping records of recent years when bankers at Goldman Sachs (GS.N), JPMorgan (JPM.N), Morgan Stanley (MS.N), Citi (C.N) and Bank of America (BAC.N) – the top five dealmakers – were the toast of Wall Street.
Massive government support for companies, particularly in Europe, is keeping many firms afloat and delaying the kind of lucrative takeover deals that have put M&A advisors at the top of the investment banking world, bankers and lawyers said.
But the pressure to drum up business means the workload – which often involves all-nighters and 100-hour weeks – is as heavy and stressful as ever, ramping up the risks for employers who turn a blind eye to potential burnout.
“Employers have always been responsible legally and financially for harm caused when they didn’t ensure an employee’s mental or physical safety at work,” said Melanie…