For the right amount of money, you’re willing to eat Alpo.
—Reggie Jackson
Our summer at DLJ began with a whimper in late May. On day one of orientation, a week after spring semester classes had ended at our respective business schools, we sat around an Early American antique oak table in a conference room deep within the confines of DLJ’s Manhattan citadel. It was the first time I had ever met Rolfe. I remember that Rolfe was sweating a lot. He looked pretty nervous. There were nine of us all told; eight men and one woman—three from Harvard, three from Columbia, and three from Wharton.
Our orientation was brief, lasting only about two hours. A contingency of full-time associates, as well as a handful of more senior bankers, came through to greet us. They made sure that we understood just what it meant to have been selected to be a member of DLJ’s summer associate class. We were the best of the best, the elite of Wall Street’s financial mavens. And we weren’t going to be pussyfooting around that summer, oh no. We were going to be treated like real, full-time associates. We were going to have to hit the ground running because we were going to do deals. Some other banks might spend the entire summer wining and dining their summer associates to sucker them into signing on full-time after the summer was over, but not DLJ. By the end of the summer we would know, they assured us, what it was like to be a full-time associate at DLJ. If we really worked our asses off, and were lucky enough to get one of the coveted full-time offers in the fall, we’d be in a position to make an informed decision as to whether we wanted to sign on full-time because we’d know exactly what we had to look forward to. Of course, we all understood what was implied but unspoken—that anybody who eventually received an offer for full-time employment and didn’t accept it would be a fool. It would be something akin to the parish priest in Sioux City, Iowa, being chosen to become the Pope and turning it down. It just didn’t happen.
The desire to garner a full-time offer would be the motivating force behind nearly every aspect of our behavior that summer. There was nothing that any of us wanted more than a phone call in the fall offering us a full-time position at DLJ following graduation. The all-night work sessions, the subsuming of any semblance of pride, the absolute devotion to the job—all would arise as a result of that single-minded desire.
We all knew how the summer job was supposed to be played. It was a game of survival. There were nine summer associates, and six would probably get offers. We all knew that we had to work for vocal managing directors who would go to bat for us when offer time came around. If we could kiss a lot of rump and get those managing directors on our side then we’d be shoe-ins for full-time offers. We’d loathe ourselves for being sniveling little ass-kissing summer bankers, but if we wanted to get the full-time offer, then we had to play the game.
So, our summer was full of carrying pitch books, running models, faking smiles, late nights, and self-degrading ass kissing. We were the butt boys and indentured servants for a generation of senior bankers. We had to bust our humps and avoid all conflict or rebellion. If we rebelled, the managing directors would go off and find a more willing servant and we’d end up with no full-time offer. All bets would be off. We’d be fucked.
With an offer for full-time employment, on the other hand, we could expect peace of mind, leverage over other potential employers, and the option to coast through the entire second year of business school with a great, big “FUCK YOU” tattooed on our foreheads. The problem was that our desire was no secret, and every banker in the joint was prepared to fully exploit it. The best of them would dangle that golden carrot out in front as they cracked the whip behind, exhorting us to push just a little harder.
The race for full-time offers would throw a perverse internal dynamic into the midst of the summer class as well. As members of a summer associate class, we were supposed to be there to support each other. We were all in it together, after all. But at the end of every day, none of us knew exactly how many full-time offers would be made that coming fall. If only six full-time positions were going to be set aside for the nine members of our summer associate class, then why the hell would we want to help each other out in a bind? Some other associate’s offer could well be the one that we didn’t get.
Taken to an extreme there was, in fact, some level of motivation to sabotage each other’s work in order to further our individual selfish motivations. So as we sat around the table at orientation that morning, eyeing each other warily, just the slightest hint of distrust hung in the air.
All the critical information was conveyed to us during that two-hour orientation: the account number for the limousine service that handled the DLJ account, the procedures for expensing our nightly dinners to the firm, the rules governing when we could and couldn’t fly first class when traveling on business. By the end of the orientation the secrets regarding how to live the good life at the firm’s expense had been laid bare. We were on our way to becoming real investment bankers.
Following our breakfast meeting we were led to our new offices. The summer associate offices were in an internal area of the bank known only as the Bullpen. Every summer for as long as anybody could remember the Bullpen had been occupied by the summer associate class. Every August, when the summer associate class departed, the incoming full-time first-year associate class took up residence there. The second-year associates, who had spent the previous year together in the Bullpen, were shuffled and scattered into other offices all over the firm. And so it was that the Bullpen perpetually housed the lowest common denominator among the entire pool of associates and, ignoring the analysts, the lowest common denominator among the entire cadre of DLJ bankers. Naturally, the greener the banker the harder he worked, which meant that the Bullpen hummed around the clock 365 days a year.
The Bullpen was a fortress. Like the hold of a slave ship, it was in the middle of the building tucked away in an area where visitors to the DLJ offices would never see it. It housed eleven offices, five singles and six doubles, which surrounded a sizable common area. The carpeting was dingy, the walls filthy. Somebody at one point had tried to add a personal touch with the addition of a couple of plants to the central common area, but these had long ago lost most of their leaves and stood there like decaying carcasses. Whoever it was should have known better. There were no windows in the Bullpen, and the fluorescent lights were in no way conducive to the healthy development of any living creature, plant or animal.
Each associate, in his or her windowless office, had a standard-issue steel desk, filing cabinet, and adjustable chair. The desks and filing cabinets looked like they’d been carted off a NATO base. The chairs were slightly more up-to-date, a necessity given that we’d be spending the majority of both our waking and sleeping hours in them over the coming months. All this furniture sat on a worn carpet. The walls were scuffed with numerous heel marks, and the fluorescent lights hummed constantly like a set of high-voltage electric wires. By the time we moved in, most vestiges of the previous tenants’ existence had been removed, but within weeks each office would look once again just as it always had—a tangled mass of pitch books, financial filings, and research reports. No personal effects. No pictures of loved ones. DLJ was our family now, and there could be no competing loyalties.
The Bullpen stood in stark contrast to the majority of the DLJ office space. DLJ prided itself on its collection of Early American art, historical documents, and antiques—all of which graced the halls, waiting areas, and managing directors’ offices. Not the Bullpen, though. The Bullpen was all about business, which was befitting for a place where most of the real work got done. The Bullpen’s residents took a perverse pride in their squalor, and the Bullpen itself served as a grim dose of reality for those whose imaginations had carried them too far down the path of believing that their chosen profession was actually a glamorous one.
While the Bullpen’s general atmosphere was in large part set by the wretched physical conditions therein, of equal importance in determining the ambience was the general stress level of its young bankers. The combination of the demands that were placed on them and their eagerness not to fuck up produced an atmosphere second only in intensity to that of a Duke-UNC basketball game. At any given moment, staccato expletives could be heard erupting from multiple Bullpen offices: “fucko,” “shit,” “asshole,” “dick,” “douchebag.” Generally, these were in response to phone calls from DLJ senior bankers who were making unreasonable and sometimes unnecessary demands on already-overtaxed associates. The level of animosity toward many senior bankers that generally permeated the Bullpen had caused these senior bankers to develop a healthy respect for its real estate, and only the bravest of them ever dared to penetrate its dark recesses. Even those senior bankers whose offices were in the Bullpen’s environs tended toward communications with its populace only by telephone. Concerns over their personal safety outweighed whatever desire they may have had to experience the Bullpen firsthand.
On our first day as summer associates, though, we didn’t know any of this. We were eager, we were ignorant, and we had stars in our eyes. Moreover, upon our initial entry into the Bullpen, its squalid nature was temporarily displaced from our mind’s eye by the presence of four young women as supple as any four we’d ever seen assembled at the same place and time. At first blush, they all appeared to be products of a gene pool from the Valley of the Dolls. As one of our classmates, Enrico de la Hernandez Franca—a Peruvian by birth—would later put it: “Jewels, each of them in their own way. It’s imperative that I have a taste.”
They were our banking assistants, “BAs” for short, and they were there to help and guide us. They answered phones, did graphics work, prepared documents, made travel arrangements, and did database work. At that moment, the four who were assigned to the Bullpen knew far more in aggregate about banking than did our summer associate class. They were equal parts smart, beautiful, and tolerant, but as we stood and ogled that day it was their beauty that was foremost in our minds.
The four introduced themselves to us: Heather, Hillary, Hope, and Tiffany. A second-year associate would later inform us of a long-standing DLJ tradition whereby at least one member of the summer associate class would be encouraged to put the wood to at least one of the BAs over the course of the summer. There were eight volunteers ready to step forward that day, and had the one female member of our class had any lesbian tendencies whatsoever, our voice would have been unanimous.
We congregated around the center of the Bullpen, making small talk and wondering when we were going to start doing deals. Never mind that most of us had no idea what doing a deal entailed. We knew that we were there to do deals, that we weren’t doing them presently, and that we had better start doing them because we only had ten weeks to prove ourselves.
Two full-time associates, Reid Wexler (or “Wex”) and Mark Brown, had been assigned to run the summer associate program. Their tasks were to ensure that we all had good summer experiences and to shepherd us through the political maze that was DLJ. They would be responsible for fielding calls from senior bankers in search of vigorous workhorses, and parceling out those requests in some sort of equitable fashion to the summer class. For the duration of the summer, their offices would be in the Bullpen with ours. They’d be there to share in our triumphs and commiserate with our defeats.
That day, they gave us some sage advice: “Don’t worry, the work will come. Don’t ever wish for more, because that nightmare will inevitably come true. If it’s seven P.M. and you don’t have anything to do, then leave. Go the fuck home.” Of course, none of us would listen to their wise words. We’d look around, see our classmates working, and convince ourselves that we, too, needed to be there doing something. None of us planned on losing out on that full-time offer by virtue of not working hard enough.
For one of us, a deal would come quickly. After several hours of aimless lounging in the Bullpen, Wex’s phone rang. Thirty seconds later we heard him shout from his office.
“OK, who wants a deal?”
Well, of course, we all did but decorum dictated that nobody appear to be too eager. There were a couple of moments of silence.
“I said, which one of you slick bastards wants a deal? Perentazzi, you out there? You have some high-yield experience, don’t you? Get in here so that I can get you up to speed. I need you to be on a plane to Cleveland within the next two hours. You’ve got to start drafting for a high-yield deal.”
Drafting? High yield? It all sounded so exciting. Our classmate Perentazzi, now known as “Slick,” was getting on a plane on our first day on the job, and if he’d been listening as closely as we had that morning during orientation he was going to know how to fly first class. That was living, man, really living. We could see it, Slick had been staffed on a deal within the first couple of hours; it couldn’t be much longer before the rest of us got staffed. Hell, by the end of the first week we’d all be doing deals just like old-timers. We could hardly wait.
Rolfe and I knew that desire alone, unfortunately, didn’t get anybody staffed on deals. So we had to wait…and wait…and wait. It wasn’t until four days later, on Thursday afternoon, that I’d finally get the call I’d been waiting for. As for Rolfe, he had to wait another entire week before the call came through. That bothered him. He began to worry that he was an untouchable.
I saw Troob and the others all getting staffed those first couple of weeks, and I couldn’t figure out why nobody wanted to work with me. I didn’t understand how random the whole staffing process was. For those first two weeks I sat in my office alternately staring at my watch and playing games of Minesweeper on the computer. I was a Minesweeping machine, but I wasn’t learning a thing about banking. With each passing day, as my summer classmates gradually got staffed on deals and I didn’t, my paranoia increased. I saw the summer passing before my eyes with nothing to show for it. When I finally got staffed, though, my demeanor would quickly change from concern that I’d never get a chance to prove myself to realization that I was incapable of proving anything. If ignorance was bliss, my beatific aura should have rivaled that of a magic bus full of Moonies. Unfortunately, ignorance in this case felt more like sure professional suicide.
The call, when it came, was from Wex.
“Rolfe, I’ve got a deal for you. One of the financial sponsors we do work for is contemplating a buyout of a medical supply company. They may want us to provide some high-yield financing for the transaction. We’re gonna need a model, comps, the whole nine yards. I’ve got some information in my office here that should get you up to speed. Why don’t you come grab it and take a look at it.”
This was great. A junk bond financing for a hostile takeover, I couldn’t have asked for anything better for my first deal. I made my way into Wex’s office, where he gestured to a five-hundred-page stack of documents; the company’s public financial filings, financial filings of competitors, research reports on the company, and research reports on the industry. I took it back into my office and began to plow through it, line by line. I knew nothing about the medical supply industry and had so much to learn…or so I thought.
Wex hadn’t been so kind as to brief me on one of the key precepts for the investment banking associate, “Thou shalt hand over all documents and be exonerated.” Just because I was being given five hundred pages of documents in absolutely no way implied that I was supposed to read five hundred pages’ worth of documents. Wex had merely supplied me with five hundred pages of documents so that nobody would accuse him of not having given me all the relevant material. He was covering his ass and it was up to me to determine what really mattered and what didn’t. I’d made my way through about a hundred pages of the stack when Wex called back two hours later.
“Rolfe, you done looking through that shit yet?”
“No, Wex, I’ve only gotten through about a quarter of it.”
“You’re gonna have to do better than that. We need a leveraged buyout model by late this afternoon. We’ve got a meeting with Greg Weinstein at six o’clock. They don’t call him the Widow for nothing, man. You better get it together. This guy eats summer associates for breakfast.”
I started to panic. Who was this guy they were calling the Widow? I’d built financial spreadsheets before in business school, but I’d spent days, not hours, on them. I thought briefly about buying a van, dropping a tab of acid, and heading out for Santa Cruz. “Wex, I don’t know if I can get it done that quick. You’ve got to remember that this is my first time trying this.”
“All right, Rolfe, look here. You summer guys aren’t supposed to work together, especially since you have to get up the learning curve, but in this case I’m gonna make an exception because we’ve got some time pressure. I’ll get Troob. He’s an ex-analyst. He’ll know how to build a model. In the meantime, you just focus on figuring out some simple transaction multiples ahead of time.”
Relief flooded over me. I didn’t have to build the model. I’d been able to forestall inevitable failure. I sat back in my chair and breathed a sigh of relief. Now I could spend the next few hours working out the transaction multiples. Problem was, it slowly dawned on me, I didn’t know what a transaction multiple was. Fuck. There wasn’t going to be any easy way out of this one, I’d have to suck it up and confess my ignorance. I called Wex back.
“Wex, it’s Rolfe. There’s a little bit of a problem here. I’m not sure that I know what a transaction multiple is. Can you give me some help?” This was it—utter, abject humiliation. “I’m sorry, man, I feel like an idiot.”
Wex was silent momentarily, then he spoke. “Oh, Christ, what rock did they pull you out from under? I don’t have time for this shit. Call Troob and ask him to explain it to you, all right? Don’t forget, we have to meet on this at six tonight so you’d better get it together and figure this out.”
I called Troob and told him that he needed to explain to me what it was that I needed to do. There was silence on the other end of the phone. This was a new one for him. He was also trying to secure a full-time offer, so why should he save my ass? He came to my office and shook his head. He’d never seen a nincompoop of my magnitude. Perhaps, in his mind, I was testing him, or more likely he worried that in some perverse way I could turn my idiocy against him like a weapon. Ignorance, after all, could be the most dangerous weapon of all.
Troob knew the investment banking lingo. He tutored me like a third grader with flash cards, imparting his knowledge. I had learned about finance theory in business school, but Troob stripped all the crap away and let me in on the stuff that really mattered. “This is what you need to do. This is how you do it,” he instructed.
“Don’t be scared of the Widow,” Troob said as he schooled me. “I was told that he’s a little asshole with a big attitude, but I interviewed with him and he’s not that bad. I’ll build you a good model. You just keep your mouth shut. Everything’ll be OK. This deal’s never gonna get off the ground, anyway. You can take a quick look at the numbers and see that.”
My meeting at six that evening was a big success. I followed Troob’s advice. I sat quietly and nodded intelligently every time the Widow spoke. I threw in a few random comments, ones that I hoped wouldn’t further betray my lack of investment banking knowledge.
“Ahhh, yes.”
“Of course.”
“How interesting!”
“Certainly.”
As events would turn, within twenty minutes the deal had died. Troob had been right. The model he’d built and the transaction multiples whose computation I’d had to be instructed upon had both indicated that the investment returns to the financial sponsor were insufficient to warrant their ongoing consideration of the deal. There was a consolation, though. I’d found a new friend in Troob. He’d saved me from the Widow’s fatal clutches, and for that I owed him my life.
Rolfe and I became fast friends when we worked together on his first foray into the world of I-banking. He owed me one after that. He was green, really green, but he was smart and he didn’t have an attitude. Those were two big positives. I figured that if I taught him a few things, he’d be a guy I could rely on. I knew I’d need that.
The summer at DLJ wasn’t all about hard work and subservience. DLJ had a plan, and that plan centered around showing us just enough of the good life during our summer sojourn to leave us wanting more. Their plan was a microcosm of what they would try to do to us once we’d signed on full-time. At that point, they’d pepper us with a parade of high-profile events—black-tie dances, expensive dinners, and private parties at the Greenwich estates of our managing directors—in order to convince us that through unwavering devotion to our jobs we, too, could one day hope to live the good life. During the summer, though, the focus was more on showing us what a bunch of laid-back, easygoing guys investment bankers were despite their tight-ass reputations.
The summer associate experience at DLJ centered around a calendar of social events: dinners, booze cruises, baseball games, dance clubs, at least one event each week. We were trained through repetition to understand that our attendance at these social events was more than just hoped for, it was mandatory. From our first day as summer-DLJers, we were made to understand that when it came to getting a full-time offer, our attendance at the summer social functions was equal in importance to our on-the-job performance. Of course, this advice had predictably fallen by the wayside by our third week on the job, at which point the majority of the summer class was regularly putting in work hours that extended well past midnight.
Our first social event of the summer season fell on Thursday of our first week at DLJ and, as it was still the first week, was well attended by our summer class. Wexler and Brown, the two full-time associates running the summer program, had decided to break us in easy on our first night out and had planned dinner for us at a local barbecue dive followed by some dancing at a Midtown club—Le Bar Bat. In addition to the summer associates, these nights out generally included as many full-time associates as our mentors were able to round up and, in addition, our four BAs. The BAs’ presence not only ensured that such a large group of vain, predominantly male bankers wouldn’t be mistaken for a group of West Village fairies but also provided an opportunity for our summer associate class to initiate our attempts at sexual conquest of the BA pool.
Upon our arrival at the restaurant, and prior to our being seated, the liquor started to flow freely. The liquor barrage was a result of the efforts of one Rod Ferramo, the associate who had originally interviewed Rolfe down at Wharton. Ferramo was an old-school vulgarian, born and bred in Greenwich, Connecticut. He was heralded inside DLJ as a young banker known for his ability to spend egregious amount of money in the pursuit of carnal pleasures. Rumor had it that on a business trip to Mexico for DLJ, he’d once spent three thousand dollars for two local whores to service him in his hotel room. Given that a moderately priced south-of-the-border whore was going for less than fifty bucks at the time, Ferramo’s weakness for upper-end pleasures was evident.
That night, though, it wasn’t Ferramo’s lust for flesh that would dictate our demise but his penchant for drunkenness. Ferramo immediately began ordering up rounds of shots for everybody, whether they wanted them or not. This presented the class with something of a dilemma. We wanted to be professional, but enough booze would undoubtedly loosen us up to the point of being dangerous. There we were with rounds of shots being passed around. It was clear that we were being set up for an evening of drunken excess. We had to be team players. Our success in investment banking would depend upon our willingness to subjugate all personal goals to the greater good.
Ferramo ended everyone’s initial hesitation with a loud question: “Why the fuck isn’t everyone drinking?”
We all took our shots of Jaegermeister.
Our first dinner as a group was in true DLJ style—marked by excess. After we’d been seated, the waitress came over to take the appetizer orders. Ferramo took it upon himself to order for all of us. “We’ll take three of everything, and keep the drinks coming. I don’t want to see anybody’s glass empty.” We gorged ourselves as wave after wave of food arrived. Before long, not only were we corralling every passing waitress to bring additional food, but the busboys as well.
By the time we had departed from the restaurant and pointed ourselves in the direction of Le Bar Bat, the aggregate level of drunkenness in our merry band had increased considerably. Our merriness increased as the hours in Le Bar Bat slipped by and we continued our rum-fueled binge. Then came the debaucherous display of Rod Ferramo.
One of the BAs, Hope, had been downing shots with increasing rapidity over the course of the evening. The combination of the shots, the heat, and the level of the music at Le Bar Bat had pushed her beyond her limits. As she stood at the bar waiting for her next drink to arrive, an uncontrollable urge to vomit overcame her. She ducked her head underneath the bar, and began spewing forth a fragrant mixture of barbecue chicken and Captain Morgan spiced rum. Ferramo, who at the time of the opening projectile was on the dance floor immediately adjacent to the bar, witnessed these initial throes of expulsion and interpreted Hope’s temporary incapacity as an opportunity to initiate an impressive public display of vulgarity. He quickly positioned himself behind her, whipped out his hogan, and as she continued her litany of expurgation he straddled her backside, grabbed her hips, and began to grind her from behind in a simulation that would have made a dog in heat blush.
As we viewed this display from across the dance floor we were thoroughly befuddled. Was this guy really so desperate and so sexually depraved? What the hell was going on? Some of the people whom we knew in investment banking were good guys. Did the pressure just cause some of the others to snap? We didn’t know. Maybe it was the sleepless nights. Maybe it was the lack of a social life. Maybe it was the opportunity to finally not be the one getting shit upon but to be the one doing the shitting.
Either way, we didn’t realize that in the not-too-distant future we, too, would be full-time associates doing things we never thought we would stoop so low to do. It was uncanny what a twenty-four-hour, seven-day-a-week nonstop-stress career choice would do to our judgment.
Not all activities on the summer associates’ social calendar lived up to the standard set by our initial outing at Le Bar Bat. Many of the dinners, baseball games, and nights drinking and dancing were uneventful. Others were, however, notable in their own right. One of the most anticipated evenings out was a summer associate dinner at the Links Club with Dick Jenrette, one of the founders of our firm. Jenrette was a legend on Wall Street. He was chairman of The Equitable, a company that was both DLJ’s corporate parent and one of the country’s largest insurance companies. Jenrette was famous not only as one of the founders of DLJ but also for his instrumental role in having brought The Equitable back from the brink of insolvency in the early 1990s. For our summer associate class a chance to meet the man was a real honor.
Basically, the reason for us to meet Jenrette was summed up by an older associate. He said, “It’s a yearly tradition. The old man sucks it up for a night and presses the flesh with all the summer idiots. I think they figure that trotting Jenrette out gets people to sign on full-time when the offers come out in the fall.”
That evening’s dinner at the Links Club, hosted by dear Dick Jenrette, was well done. The Links Club was an all-male institution whose membership roster was among the most exclusive in New York City. Special permission had been sought, and granted, to allow for the presence of our one female summer associate classmate, Diane. Even then, Diane’s permission slip only gave her access to a limited number of the Links Club’s rooms.
The dinner was preceded by a cocktail hour during which gloved waiters made the rounds taking drink orders and delivering trays of mushroom caps and raw oysters. Jenrette made his own rounds to each of us and, in the most gracious manner possible, listened intently as we stammered out how honored we were to meet him and how we were so incredibly thankful to have been given the opportunity to spend our summer at DLJ.
The dinner came and went with no significant occurrences. Seating positions at the table had been apportinned on a musical-chairs basis, with most of us attempting to arrange our seating positions so as to avoid being too close to Jenrette. Although the man was unusually friendly, most of us felt that it might be somewhat awkward to have to carry on a conversation with somebody whose station in life was so far removed from our own that he couldn’t possibly give a shit about what we had to say. With our business school debts, most of us were worth about fifty dollars. Jenrette was worth hundreds of millions. We were young. He was old. We just had nothing in common. The fact that we knew he would feign interest in our miserable lives made the specter of conversation that much more unappealing.
Afterward, during dessert and coffee, the informal conversation that had dominated the dinner was replaced by a question-and-answer session. We’d been warned to expect this ahead of time, and it had been strongly suggested that we prepare at least one intelligent question each to ask Jenrette. The usual garbage spilled forth from our mouths as we drew upon our business school skills to formulate meaningless, inane questions about the future of DLJ. Only one of our classmates distinguished himself during this session, Mike Stevens.
Stevens was one of the Harvard boys. Although he was attending business school at Harvard, he had spent his undergraduate days at another Ivy League powerhouse—Penn. Stevens was a big man, he’d played football for Penn as an undergraduate. Between his size and his classic bowl haircut, he bore an uncanny resemblance to Lurch, the butler from The Munsters.
Over the course of the summer, most of us had come to the conclusion that Stevens was a manic-depressive. When Stevens was on a high nobody could touch him. A common fixture in all the summer associates’ offices were foam footballs that were gifts from a foam processing company whose initial public offering DLJ had recently underwritten. Stevens could frequently be seen in any number of offices in the Bullpen clasping one of the foam footballs to his abdomen and rolling around on the floor, proclaiming all the while that he was going to impart his football knowledge to the masses by offering each of our BAs free fumble-recovery lessons there on the office floor.
Prior to returning to business school, Stevens had been an investment banking analyst with me at Kidder Peabody. Stevens was one of the most focused, motivated, intelligent individuals I’d ever met. During our time at Kidder, I’d once seen Stevens spend an entire weekend balling up enough wastepaper to fill a colleague’s entire cubicle waist-high. The colleague had been furious upon returning to his office the following Monday morning, but even he had to admire Stevens’s determination.
Stevens’s focus and determination could just as easily manifest themselves through his dark side, however. His temper was legendary. Stevens regularly held wicked battles over the phone with his fiancée, with the decibel level generally rising to a point where it was impossible for anybody in the Bullpen to escape exposure to his invective. In addition, we think that the facilities personnel at DLJ had taken to stocking an inventory of spare telephone handsets following Stevens’s arrival for the summer, as Stevens had a habit of regularly smashing his handset to pieces against his desktop after receiving phone calls from DLJ managing directors whose requests he didn’t appreciate.
Stevens’s capacity for work far surpassed that of the rest of us. He was concentrating most of his efforts during the summer on work for DLJ’s insurance banking effort, an industry with which he had considerable expertise. While the rest of us typically had our hands full with one or two concurrent projects at any given time, Stevens was doing yeoman’s work by managing up to three live deals and multiple pitches at the same time. For the seventy-two hours prior to our dinner with Jenrette, in fact, Stevens had been assembling five pitches at the same time, an incredible feat for anybody, let alone a summer associate. Stevens’s physical and mental capabilities were being pushed to the limit, as he had done back-to-back all-nighters, but the reigning powers at DLJ had indicated that the Jenrette dinner was absolutely a mandatory event.
So there was Stevens, with no sleep for the preceding seventy-two hours and with a full meal under his belt, fighting to stay awake during our after-dinner question-and-answer session. Rolfe and I were seated directly across from him, and had watched him come close to nodding off several times during dinner. Each time he’d been able to fight off the urge and stay conscious, but the effort this required was clearly increasing with each occurrence. At times his eyes came within a hair’s breadth of being closed, so that he looked like a Korean fighter pilot after two quarts of rice wine. When a short lull in the question-and-answer session arose Stevens elected to fire off a question of his own, more to keep himself awake than for any real desire to hear the answer.
“Mr. Jenrette, can you please talk a little bit about which product or industry areas DLJ intends to focus on over the next few years as potential growth areas?”
“Certainly, Mike,” Jenrette replied, having already committed each of our names to memory.
As Jenrette launched into a discourse on potential areas ripe for expansion in the investment banking world, a struggle of epic proportions began to unfold directly across the table from us. With each word that came out of Jenrette’s mouth, Stevens’s eyelids grew heavier. Several times, his head began to sink backward as his body’s desire for slumber began taking over, and it was only at the last minute that his head would snap back to vertical. Finally, there was nothing left that Stevens could do. His head fell backward, his mouth fell wide open, and there he lay in deep slumber while the chairman of the board answered the question Stevens had asked just moments before.
Fortunately for Stevens, Jenrette was too good of a man to draw attention to his condition. While a more devious soul might have chosen the moment to either humiliate Stevens verbally or, at the very least, pour a shot of tequila past his open lips and directly into his gullet, Jenrette chose instead to wrap up the question quickly and move on to the next one. In the investment banking land of wall-to-wall hard-asses, the man was a true gentleman.
With the exception, perhaps, of Stevens and Slick, not many of us had particularly enviable live deal experience over the course of the summer. For the most part, the summer consisted of a whole lot of pitches and just a few scattered deals. Ten weeks was barely enough time to see a deal from beginning to end, but it was more than enough time to do multiple pitches for potential clients. When it came to these pitches, one managing director took the blue ribbon. His name was William DeBenedetti; his fellow managing directors called him Billy, but we knew him as “Bubbles.”
Bubbles was as much fun as a bottle of lukewarm castor oil. He’d only been at DLJ for two short months and he’d already garnered a reputation as one of the most fearsome pitch book generators in DLJ history. He’d come to DLJ from Lehman Brothers, receiving a bump from senior vice president to managing director in the process. Legend had it that among the junior bankers at Lehman he’d been the most reviled man on staff, and upon his departure the entire analyst class had thrown a party where the collective level of joy approached that at Christ’s resurrection. Bubbles was as short as they came—somewhere between a dwarf and a midget, and collective conjecture was that his tyrannical behavior was as much a result of a Napoleon complex as anything else. He’d been hired into DLJ’s mergers and acquisitions (M&A) group as part of an initiative to increase the bank’s presence in the advisory business.
There’s an important tenet of investment banking: It’s not the work you have to do but who you have to do it for. Pitch books aren’t always all-night affairs, but working for Bubbles was virtually guaranteed to be a twenty-four-hour-a-day, seven-day-a-week job. The job included lots of humiliation, and a willingness to take it up the rear without Vaseline.
Bubble’s focus was on the universe of financial buyers, those groups whose charge was to use borrowed money to buy businesses from their existing owners, make subsequent operational and strategic changes, and then sell the businesses several years later at a healthy profit. As a group, the financial buyers had enjoyed several years of enormous historical returns on their invested capital and, as a result, had received a large influx of money from other investors looking to join the party. All this money was out looking for new companies to buy, and Bubbles had made it his mission to bring as many acquisition ideas to the financial buyers as he could churn out. In concept, the idea was a simple one. In reality, it was another matter entirely.
Bubbles’s pitch books could contain anywhere from five to twenty potential acquisition candidates for the lucky recipient. For each potential candidate, the pitch book contained a summary of the company’s product lines, a listing of current news events on the company, detail on the company’s historical financial performance, a build-up of the company’s current capital structure, current valuation parameters, a listing of the current ownership profile, and short biographies on each of the company’s senior management and board of directors. It was a lot of information. It filled up a lot of pages. That made the pitch books heavy, which was what Bubbles liked. Given the high degree of likelihood that none of the material would ever be given more than the briefest consideration by the recipients, the compilation of the necessary components should have been a relatively mechanized event for the associates and analysts involved. The associates and analysts, though, had been trained through negative reinforcement to develop an attention to detail that turned the compilation process into an event of major import. Creation of a pitch book for Bubbles was approached by analysts and associates alike as an activity akin to the illumination of a holy manuscript by medieval monks.
As Bubbles became aware of the wealth of productive pitch-making capacity that the summer associate pool provided, he began directly staffing summer associates on his weighty pitches. He bypassed the usual staffing channels, preferring to corral the fresh meat himself. As the weeks passed, moreover, his ambitions grew grander and grander. As his ambitions increased so, too, did the number of companies included in each pitch. Bubbles’s pitches, in fact, began to expand to such generous proportions that they became living, breathing creatures that were incapable of being tamed by a single associate. Development of the pitches began to require the input of multiple associates.
The granddaddy of all of Bubbles’s pitches was code-named Kinetic II. All of Bubbles’s new business hunts had code names because in his eyes it heightened the air of mystery and secrecy surrounding the projects. He believed that everybody was trying to steal his ideas, and this drove him to swear all junior bankers with whom he worked to total secrecy. In Bubbles’s mind, competitors were even trying to tap into his cellular phone conversations to get a leg up on his professional endeavors. Any conversation with Bubbles that he was conducting from his cellular phone or from an airplane took place only under the strictest of rules. Company names could never be used; code names were used instead. This led to frequent conversations that, taken out of context, sounded positively ludicrous. For instance:
“Hi, it’s Bill. I’ve been thinking, why don’t we look at a scenario where Big Bear acquires Pumpernickel Dough’s Butterbean division?”
“Okay, Bill, but what should I assume happens with Pumpernickel Dough’s Tinkerbell division?”
“Assume it gets rolled up into Big Bear’s Claw division.”
“You got it, Bill.”
It was like listening to Warren Buffet on acid.
Kinetic II was, not surprisingly, the descendant of Kinetic I, a pitch that Slick had initially spearheaded with the help of both a full-time associate, Brian Goldfarb, and an analyst, Adam Davis. Both Kinetic I and Kinetic II were designed as generic pitches that could be made to any of the big financial buyers. Like a two-dollar whore, Kinetic I had made the financial buyer rounds on Wall Street. Bubbles had pitched Kinetic I to the likes of Forstman Little, Oaktree, KKR, and Kelso & Co., all of whom were significant players in the leveraged buyout business. Although none of them had been tempted by the bait, Bubbles had been emboldened by his first trip round the Street to take another shot at the stars. And so, the beast that would become Kinetic II was born.
Kinetic II, as conceived by Bubbles, was considerably more ambitious than Kinetic I. Whereas Kinetic I had included profiles of just ten companies, this number would be doubled to an even twenty for Kinetic II. And with a doubling of the pitch’s inherent size, additional staffing resources would be needed to bring the behemoth in on schedule.
Rolfe had established his reputation early on in the summer as master of the pitches. The luck of the draw had ensured that he got no live deal experience but instead a wealth of seasoning in new business initiatives. In an attempt to turn this apparent sow’s ear into a silk purse, Rolfe had decided that if he were to be relegated solely to producing pitches, then he’d bring his entire arsenal of capabilities to bear on development of the most awesome set of pitch-making abilities that any DLJ summer associate had ever commanded. It was no surprise, therefore, that he was the one chosen to augment the original Kinetic I pitch team for the genesis of Kinetic II. With his addition, the team stood at five: Bubbles, Goldfarb, Slick, Rolfe, and Adam. When Bubbles called the shots, they all jumped. The problem was that with a full-time associate, two summer associates, and a senior analyst all on the same team there were effectively four junior bankers who were all fairly close to each other in the DLJ hierarchy. This circumstance, coupled with the general loathing and disrespect that they all had incubated for Bubbles, led to a dynamic whereby none of them wanted to take ownership of the project and drive the process toward completion.
Goldfarb was busy on a real deal and Adam was as elusive as a fox, so as luck would have it, Rolfe and Slick became the Kinetic II go-to guys. Kinetic II went through so many rewrites and drafts that the latest version was rarely ever more than two hours old.
As the day approached for the first presentation of the Kinetic II pitch book to one of the financial buyers, the level of frenzy surrounding the project increased. Bubbles was about to burst, calling down to either Rolfe or Slick with demands for changes to the book at least twice an hour. On the day prior to the book’s initial rollout, Bubbles had planned to travel to Chicago to work on another engagement. Rolfe and Slick were looking forward to his departure because, although they knew that he was never more than a phone call away, they believed that the logistics of his calling to demand more changes to the book would at least slow down the rate of calls they had, to that point, been receiving. At the very least, they figured that they would be spared the annoyance of his calls while he was in the air. What they didn’t know was that Bubbles was about to both cement his reputation as a dickweed and teach them the futility of ever believing that they could escape their masters’ clutches, all with one phone call. Rolfe was the lucky recipient of Bubbles’s initial affections.
Slick and I had been going nuts for the entire week trying to get Kinetic II into shape. We were down to the short strokes. Bubbles had departed New York on a 3:30 P.M. flight headed for Chicago. I was sitting at my desk fifteen minutes later, at 3:45, when the phone rang. Heather, one of our BAs, picked it up.
“Rolfe, you’ve got Bill DeBenedetti on the phone. He says it’s urgent.”
My peace was shattered.
I yelled to Slick, “Slick, get in here, Bubbles is on the phone.”
Slick came running in from his office. I picked up the phone.
“Bill, hi, it’s John. I’ve got Perentazzi in here. I’m gonna put you on the box.” I flipped the speakerphone on. “OK, Bill, you’re on the box. What’s up?”
“Hi, guys, sorry if the connection’s bad. I’m calling from the plane. Look, I’ve got lots of changes to the book. You two are gonna have to get these processed as quickly as possible. We’ve got to get these books into production. Our meeting’s at nine tomorrow morning.”
“OK, Bill, go ahead. We’ve got a draft of the book here. Why don’t you start going through the changes one by one.”
“All right. Most of the changes are to section two. I want to change the structure of this section around. Page forty-six should now become the new page forty-three…the old page forty-three should now become the new page forty-one…you need to change the heading on the old page forty-one to read ‘Strong Operating Leverage Will Contribute to Outstanding Investment Returns,’ then bold it and double underline it and then make that page the new page forty-four. Box page fifty in a bold box and shade the right column that says ‘Returns.’ Oh, yeah, back on page thirty-eight, double underline the IRR percentage and make the chart blue and green, not blue and red. Change the chart on page forty to a more neutral color like yellow. You guys should know better than to put a chart in red. Red means losses—c’mon guys, get with the program. And…” Bubbles continued to rail off changes during a two-minute rapid-fire monologue.
I scribbled down the desired changes furiously while Slick reordered pages in a whirlwind of paper. Bubbles finished his directives and the phone went silent momentarily.
“You got all that?” he asked.
“Bill, maybe you could run through those one more time to make sure that we’ve got everything right. We don’t want to fuck this up.”
“Goddamn it, I don’t have time for this. I’ll do it once more, but you’d better listen carefully. I’ve got other things that I need to be doing.”
Bubbles ran through the changes again. I checked his second run-through against my notes and everything was checking out fine. My anxiety moderated slightly. I muted the speakerphone and turned to Slick.
“I think we’re OK. Everything he just read back matches what I’ve got written down here.”
Slick looked at me blankly. “What the fuck are you talking about, Rolfe? I’ve been rearranging pages here and nothing that he just said makes any sense. He just reordered everything to look like complete bullshit. He’s got us writing text headers on section title pages, and has us pulling out pages that cover all the key financial data. This doesn’t make any fucking sense.”
“Hello, hello, are you guys there?” Bubbles was getting impatient.
I took the phone off mute. “Hold on just a second, Bill. We’re trying to get everything straight here.”
I turned back to Slick. “What do you mean, nothing matches? He just read us off the page numbers, how could nothing match?”
“I don’t fucking know.”
“Hello? Are you guys there? I don’t have time for this shit.” Bubbles’s voice was getting louder. Heather, our BA, and a couple of our summer associate classmates had heard the commotion on the speakerphone and had now stuck their heads through my office door to listen. I took the speakerphone off mute once again.
“Look, Bill, I apologize, but we don’t seem to have all the page numbers down just right. Could you read them off one more time.”
“Jesus Christ, I don’t have time for this shit. I may be working from an older draft version than you, but don’t worry about the fucking page numbers. Just listen to what you have to do and then do it. Think, you stupid assholes.” Bill’s voice was getting louder. He wasn’t a happy man. He began to read through the list of changes again, twice as fast and twice as loud. I muted the phone and looked at Slick. He looked back at me as Bubbles continued to read.
“This still isn’t making any sense,” Slick said. “Bubbles is working off an old version of the draft. Man, I hate this guy.” Without thinking, I took the speakerphone off mute and interrupted Bubbles for the final time. “Bill, we need to go through this without talking about page numbers. They’re confusing us.” The phone went silent. Then the eruption occurred.
“WHAT? WHAT? I DON’T GIVE A FUCK ABOUT THE GODDAMNED PAGE NUMBERS. READ THE FUCKING HEADERS ON THE PAGE…”
The level of abuse coming through the speakerphone, and the volume at which it was occurring, was amazing.
“WHAT ARE YOU GUYS? FUCKING ASSHOLES? YOU THINK I HAVE TIME TO WASTE ON THIS FUCKING SHIT?”
I put the speakerphone on mute and looked at Slick. As Bubbles’s diatribe continued Slick and I started to laugh. There was Bubbles, 35,000 feet up in the air in an apoplectic rage. He was yelling so loud that not only were the other first-class passengers undoubtedly privy to his thoughts but so was everyone in coach class, including those who were locked up in the bathrooms all the way in the back of the plane. We, meanwhile, were on the ground in New York and there was absolutely nothing that we could do, other than let his fury run its course.
Eventually, after determining that he had debased us sufficiently, Bubbles gave both us and his fellow passengers a break. He hung up the phone and Slick and I got to work trying to untangle the wicked web of changes Bubbles had delivered. Seventeen hours later, I would deliver the books to the offices of D. L. Thompson & Co. for the first public airing of Kinetic II.
By this point in the summer, my exposure to the dysfunctionality that defined the investment bankers’ world should have been sufficient to allow me to make a reasoned decision to pursue other career paths. If it hadn’t, the visit to D. L. Thompson & Co. should certainly have driven the point home.
The D. L. Thompson partner who greeted us was straight out of a Charles Dickens novel. He had stuffed his generous ass into a tight pair of seersucker trousers. On top, he wore a bright red sweater vest that looked as if it had recently been pulled from the garbage receptacle behind the office tower that was home to D. L. Thompson & Co.’s offices. The D. L. Thompson partner’s defining feature, however, was a set of sideburns that were half the width of his entire cheekbone and which ran all the way from his ears down to the corner of his mouth. Stuffed into that mouth was an unlit cigar that had been chewed down to a raggedy, soggy pulp, and which was leaving tobacco shards all over his teeth, lips, and sideburns. The guy was a freak, a bad Halloween rendition of an innkeeper out of the Canterbury Tales, and we were there to kiss his ass. His name was Chester Goodman III.
Bubbles started out the meeting in his customary style with an effusive show of gratitude for having been granted the meeting. He then proceeded to launch into a needless round of name-dropping, during which Chester cut him short.
“Billy, what do you have for me today?”
“Oh, we’ve got some good ones today, Chester. If you open your book to page four, the table of contents, you can see what we’ve got lined up.”
Chester opened to page four, scanned the table of contents, then looked up at Bubbles.
“Billy, how many times have I told you that I don’t want to look at any baking businesses. You know I hate bakeries. You’ve got four baking companies listed in here. This is a waste of my time.”
“But, Chester, these are really good bakeries. I think that you might want to consider these.”
“No bakeries.”
Poof—just like that, four of the twenty companies in our pitch book had gone up in smoke. And Bubbles, the little bastard, had known ahead of time that this guy with the sideburns didn’t like bakeries. Chester was just beginning.
“Furthermore, Billy, your friends from Bear, Stearns have already been here to show us Colemack Company, Circular Toys, and Fountain Healthcare. And you can forget about Extruded Synthetics and Condor Can, Inc. They’re too goddamned expensive. We won’t pay a premium for businesses trading at those kinds of multiples.”
We’d been in the meeting for under two minutes, and Chester Goodman III had already eliminated nine out of our twenty companies without ever making it past the table of contents. Hours upon hours of work, our beautiful charts, graphs, and plagiarized prose would never see the light of day.
“Now this one could be interesting. Finale Industries—a consolidation play in the death care industry. I tell you what, the demographics should really drive this one. Gonna be lots of dead people over the next few years. I wouldn’t mind owning a piece of the market that sucks their money up before their corpses get dropped down into the dirt.”
Bubbles had been given an opening. One of our ideas had sparked a flicker of interest from Chester. Bubbles seized the opportunity and proceeded to wheedle, cajole, and beg for Chester’s continued attention. Chester, however, was like a fat pussycat whose attention was drawn by a passing cockroach. He batted the cockroach a few times, found temporary amusement in its confused stumblings, and then settled back to continue his slumber. There would be no deal for Bubbles and DLJ that day. There would be no deal for the young summer associate. Kinetic II’s first foray out of the box had been a resounding failure. It was a harbinger of what was to come.
As I sat in Chester’s office that day, I should perhaps have looked at things differently. Instead of looking upon Chester as an aberration in the human gene pool, I should have realized that it was Bubbles and I who were the human detritus. As I watched Bubbles do everything but chug down Chester’s cock with the goal of securing a piece of business, I should have been ashamed. I should have immediately cast off my leather shoes and woolen suit and gone streaking naked from the room in search of redemption. I should have, at the very least, realized that the Chesters of the world were the ones with the purse strings, and the guys with the purse strings were the ones in control. I should have thought about the number of nights that I’d been at the office until 3 A.M. and assessed whether anything was worth that sort of commitment.
I didn’t do any of that, though. And for that oversight, I would pay.
And so it was that the summer dragged on for Rolfe and me. Pitches, deals, dinners, nights on the town, it was one long continuous bank-a-thon. Lots of learning, little sleep, and a healthy serving of humble pie. Eventually it came to an end. The summer had been painful, but it was over. We had survived and we were ready to use the summer experience as a springboard to bigger and better things. Rolfe and I swore we would never go back. We promised ourselves that we would try to get an offer from DLJ and then use it to find other, more rewarding jobs. Once again, we were believing our own bullshit.
What we didn’t know was that DLJ was beefing up and we were the beef. DLJ needed bodies, lots of bodies, and they needed them fast. Because of that, just about all the summer associates would get offers. In fact, the only person in the summer associate class with a serious chance of not receiving the coveted full-time offer was Rolfe. It wasn’t because he hadn’t worked hard. It was a much more serious offense. During the Summer Associate Golf Outing, Rolfe had managed to hit the managing director in charge of associate recruiting, Doug Franken, in the leg on the fifth hole. Rolfe didn’t just bean him in the leg, he had done it at Franken’s own country club and with one of the Titleist golf balls that Franken had lent to Rolfe. During another summer, Rolfe’s transgressions might have gotten him dinged.
Fortunately for Rolfe, DLJ needed associates.