Here’s how it works: you sit in your cubicle, your swivel chair positioned at such a height that the top of your head is visible to anyone walking by, but not so high that you can make eye contact. One of your monitors displays an Excel spreadsheet filled with numbers, a PowerPoint slide filled with colorful charts, a Word document with ¶ symbols all over the place, or a black-and-white company filing. The second monitor, the one that is less visible to passersby, you use to browse the Web, but it’s slim pickings, since all social-networking sites—LinkedIn, Facebook, Grindr—are blocked, as are Gmail and really any other website that provides entertaining content. The key is layers—seasoned junior bankers will have six or seven “work” documents open with the left thumb and middle fingers poised. A quick tap of the Alt key, followed by the Tab key, allows you to toggle quickly between documents—Larry David’s disgruntled mug becomes a free cash-flow output page in nanoseconds.
Girls typically shop online or check out the menus of the newest restaurants in the Meatpacking District, while guys check out pictures of expensive watches or browse non-prohibited sports websites to keep tabs on the players on their fantasy-football teams. Analysts and associates who’ve been around a couple years and have earned some respect in the group might stream a show on Netflix or Amazon, though even then, that window will be tiny and strategically placed in the lower portion of the less-visible monitor. But it’s tough to focus on any plotlines with the anticipation of the inevitable….
The email hits your inbox—first thing you see is the subject: “Staffing,” followed by the project name. On occasion, the assault comes verbally, a senior banker materializing at your desk and explaining what he needs and how he needed it yesterday. Once staffed, the only thing for certain is there will be agonizing, endless nights in the office and a slew of questions for which you’ll never find answers. How long this pain lasts, you won’t know until you open the email and read further details on the project—could be an afternoon, a week, a month, or it could be indefinite. That feeling you get in high school or college right before a final exam, where you need to do well but you know you didn’t study enough—that’s the feeling each staffing gives you every day for its entire duration.
But I don’t know any of this yet.
MDs work the phones with clients, ultimately drumming up work for junior bankers. The MD then emails the staffer, usually a VP in the group, and outlines what he needs. Each staffing typically has four people: a managing director (MD), a vice president (VP), an associate, and an analyst—a fact that underscores how flat the culture is they advertise during recruiting. It is up to the staffer to determine who has capacity to take on a given project. After spending my first two days working through mandatory compliance protocols and getting my computer set up with the help of a slew of IT professionals in Chennai, I’m ready to work and have 100 percent capacity.
Our staffer in the Industrials group explains to us that in the first couple months, all staffings will comprise five people and include the typical four-person team (MD, VP, associate, analyst) plus one new joiner (either a new analyst or associate). As a first-year associate, my job is to contribute to each project, while also paying close attention to the veteran associate on the team.
“Staffing: Weston M&A” reads the subject of my first staffing email as a full-time investment banking associate at Deutsche Bank. My stomach doesn’t churn. Instead, I’m excited.
“Fuck my life,” says Ted, a senior associate who occupies the cubicle adjacent to mine. I’d met him briefly during the internship, but either he doesn’t remember or doesn’t care. He has short blonde hair, fair skin, and the ruddy complexion of a true Irish Catholic. I lean back in my swivel chair past the small partition that divides us and catch a glimpse of his left computer monitor, which displays the same staffing email.
“Bad?” I ask, giving him a minute to scan the details of the email.
“Could be worse…just a pitch,” he says. Junior bankers’ work can be categorized into one of three categories: live deals, which is how the bank generates revenue; pitches, in which the junior bankers put together a deck, which the MD presents to a company’s CEO or CFO; and finally, miscellaneous internal work, which can vary widely in content but is invariably the least interesting.
I give Ted another minute to digest the email. “But Monday meeting,” he says, as he turns to face me. “Brutal.”
“Why?”
“Means we’re turning comments all weekend and printing Sunday night,” he says.
“Any chance we can get it finished Friday and print before the weekend?”
Ted smiles, then laughs as he returns his attention to his computer. I guess I’m funny again.
“Know what type of pitch this is? Like any idea what type of stuff we’ll present?” I ask.
Ted finishes an email, then spins in his chair to face me. “Just like all other pitches—we’ll jam every number ever created in a deck and ask the client if any of those numbers excites him.”
“Ready, gents?” says a distinctly British voice behind me. Gareth, the VP on the staffing, holds a leather binder in one hand and a fountain pen in the other. He’s impeccably dressed. While most bankers opt not to wear a tie, let alone a suit jacket, around the office, Gareth is the exception. His initials are displayed on the gold cuff links of his blue Oxford button-down. His dark gray suit fits snugly, with the top button on his jacket secured around his thin midsection. Though thinning, his dark hair is neatly combed to one side. Behind him, standing almost a foot taller than Gareth and about seventy-five pounds heavier, and seemingly less concerned about his appearance, is Joel, a former college-football player and the analyst on the project. Despite his imposing physique, Joel looks like a kid who just finished an oatmeal cookie.
I grab a spiral-bound notebook and pen and follow the group into the corner office occupied by Ethan, a relatively young-looking MD.
Ethan spots us through the floor-to-ceiling glass wall that separates his office from the rest of the floor. He waves us in, holding up an index finger as we enter. The sleeves of his dress shirt are rolled up and he fidgets in his chair as his attention darts from his phone to his computer monitor to us. His metallic-black hair is just long enough that he can apply gel to it.
“Let’s sort this shit out mid-next-week. I’ll be in Denver Tuesday, Dallas Wednesday morning, back in New York that night,” says Ethan in the direction of his phone.
“Sounds good,” says the voice on the other line. “I’ll tal—” Ethan hits a button on his phone, ending the conversation. Through the window to his right, towering cranes stand in the distance, an indicator of low interest-rates—one of the few tidbits I picked up in business school. Through the window behind him, I spot the Statue of Liberty and a number of massive barges moving imperceptibly through New York Harbor. But this isn’t a time for sightseeing. Gareth and Ted sit in the stiff, wooden chairs across from Ethan. Joel remains standing, looks at me, and extends his hand toward the third and only remaining chair in the office. I thank him with a nod and take a seat.
I met Ethan briefly during the internship, and by “met,” I mean he tapped the top of the cube I was sitting in one day as he walked by.
“Look at this,” says Ethan, extending his arms wide with his palms face-up. “Got my grade-A crew.” I suspect he says this to every junior team.
“Pretty solid showing from the ’Skins last weekend,” says Ted.
“Three hundred sixty-four passing yards, three TDs. Yeah, just pre-season, but if the O-line can keep Cousins healthy, it’s a cakewalk through the NFC East.”
“Not so fast,” says Joel with a big grin on his face as he taps his dark blue tie that features a large New York Giants logo. “G-men have solid pass defense, and Eli is prime—” Joel raises his hands to his face, covering a sneeze.
“You sick?” asks Ethan.
“Allergies,” says Joel.
“Do me a favor,” says Ethan, eyeing Joel with one eyebrow raised. “Dial in from your desk. I’m going to DC for the game this weekend and can’t take any chances.” Ethan’s attention darts to his computer to check an email. Joel glances at Gareth to get confirmation—Is Ethan serious? With a flick of his head, Gareth confirms what we all suspect—Ethan is serious.
“Don’t touch the door handle,” says Ethan as Joel walks out of the office, using his tie as a barrier between his hand and the handle. Thirty seconds later, Joel is on speakerphone, and it’s go time.
“Alright, Weston,” says Ethan as I poise the pen in my right hand and flip open to the first blank page in my notebook. “These guys are gonna do something, probably something fuckin’ stupid. Spoke to their CFO last week. He opened the kimono. Their margins are for shit and their stock hasn’t moved in three quarters. They got cash and need to make a move, so this book should be simple—section one, normal market-update bullshit from ECM. Section two, normal chems outlook pages, make sure that consolidation page is in there. Section three, actionable opportunities—check book we just did for FMC and use same format with the accretion/dilution stuff, same targets. Check old books to see if we’ve shown any other private companies and add them. Make sure the SOTP pages are updated for new research. Use same multiples…actually, take specialty ingredients for Ashland up a turn, half a turn maybe, see what makes sense. Then broker outlook page. Also get that firepower page. Need M&A creds page up front too, and make sure we get Vantage cred in there—don’t show multiple though, deal hasn’t closed yet. Should be a modular book.”
Ethan scans our faces—I lower my head and stare at my notes, which ignites further panic, since the speed at which Ethan talks far exceeds my speed as a manual stenographer. From the corner of my eye, I see Ted make a mark in his notebook. Gareth looks unfazed. I even catch a glimpse of a smile from him.
“Let’s also throw their financials in appendix. Normal EBITDA and revenue progressions,” says Ethan. “Might as well do free cashflow too. Make sure to footnote this shit. I don’t give a fuck how you calculate it, just make it clear in the footnote.”
Ethan then grabs a few blank pieces of printer paper from a bottom drawer and rehashes the outline of the deck at breakneck speed in barely audible tones as he makes illegible marks on the pages in front of him. “Market outlook, chems bullshit pages, actionable ops, broker, firepower, creds. Easy.” He clicks the top of his pen twice and leans back in his chair.
“And team page—need one up front. Throw in our APAC Industrials M&A guys. Need to show we got a strong team, specifically in China.”
“Just looked into this for another deck I was staffed on. Believe we only have TMT M&A guys in China,” says Ted. “The broader APAC M&A group covers—”
“So go in the DB database, find some Asian guys who work in the bank, and throw their headshots and names on the page, and call it APAC Industrials M&A. Just need it to look fulsome. Throw in all of capital markets too.”
“Will do,” says Ted as he makes a note.
“Here’s markup.” Ethan pushes the pages in front of me, which I tuck it into my notebook. “Let’s not boil the goddamn ocean here. Should be a simple book—twenty-five, thirty pages max.”
“Sounds reasonable enough,” says Gareth.
“I got an eleven o’clock,” says Ethan. “Get me a draft sometime Wednesday.”
Joel is already outside waiting for Gareth, Ted, and me as we exit Ethan’s office and convene to debrief.
I open my notebook and scan my notes, which read: CFO meeting. Do something stupid. Section one nor…ECM…outlook…simple consol…simple shit FMC book…up a turn? maybe half…progression??
Then I pull out Ethan’s markup.
“Have you got it all, Bill?” says Gareth. “I think Ethan was fairly clear in his asks.”
“Think so,” I say. “I can—section one….” Two large hands apply pressure on my shoulders. I turn around. “He’s kidding,” says a beaming Joel.
“Give me fifteen minutes and I’ll provide a markup with a little more clarity,” says Gareth. “In the meantime, would you email the chaps in ECM and get—”
“On it,” says Joel.
“And can you scan the markup and send around?” Ted says to Joel. Joel nods as I hand him the markup. “I’ll start churning on the shell,” says Ted. With that, we all return to our respective desks.
Every cubicle has a story. Much like stalls in hockey locker-rooms, remnants of past occupants shed light on the most recent chapter of that stall’s story. While Ted, Gareth, and Joel get to work on the project, I busy myself by exploring my new cube. The three small drawers on the right of my desk are relatively empty, save for a few stray ballpoint pens, some pushpins, a box of binder clips, Post-its, a hair tie, an empty bottle of extra-strength Advil, and one of those compressed-air keyboard dust sprayers. In the two large drawers to my left are more substantial findings, including a slew of old Deutsche Bank pitch books held together by a rubber band, a couple confidential information memoranda (CIMs), and a few management presentations (MPs).
Affixed by pushpins to the walls of the cube are an assortment of papers and Post-its, most of which contain phone numbers and contact information for various help desks/resources or papers displaying Excel shortcuts and templates of PowerPoint charts.
“Yo,” says Ted as he leans back in his chair and tilts his head in my direction, making brief eye contact with me. “Shell’s gonna take me another fifteen minutes. Could you put the PIB together, then email BIS and ask them to pull growth rates for specialty silicas, engineered plastics, and high-pressure laminates? I’ll also send you an email with any other pages I think you can work on.”
Founded in 1919, the Press Information Bureau (PIB) is a nodal agency of the Indian government that disseminates information in various forms on government plans, policies, initiatives, and achievements. My first Google search for “PIB,” while riveting, is misguided. However, my second search for “PIB finance” is more helpful, informing me that a public information book is an internal resource for investment bankers to glean historical and transactional information on a given company, and typically is comprised of the latest public filings and investor presentations, some equity research reports, and any other relevant news—probably something I should’ve learned during the internship.
After three unsuccessful Google searches for information on “BIS,” a piece of paper pinned to the wall of my cube catches my eye: “Support Function Services” reads the title. Below are a number of rows, the second of which is entitled “Business Information Services (BIS)—Company and Market Research.” I skim it, find the contact information, and draft an email requesting the growth rates for each of the items Ted had outlined—which I had luckily jotted down.
An email from Joel hits my inbox—it’s the scanned version of Ethan’s markup. Although Ethan had originally handed it to me, I’d never really leafed through it until now. I retrieve my notebook and cross-reference my notes with the pages Ethan put together, trying to make sense of them.
“Gents,” says Gareth. Ted and I spin around in our chairs simultaneously. “Here’s my markup. I’ve layered in a few more items I’m sure he’ll eventually want us to add.” He hands Ted a stack of pages held together by a large paper clip binder. On the front are Gareth’s initials circled and the date. “Tried to fill in some of the gaps that Ethan left in his pages.”
And boy, does Gareth fill those gaps with aplomb. Let’s take page thirteen as a case study:
Ethan’s markup
Gareth’s markup
A box pops up on one of my monitors, displaying a new message on the internal office-communicator messaging system—AIM for work.
Chetandra Pratap Singh Chauhan: Hello, William Keenan
While the name is unfamiliar, I feel like it’s someone who can help me.
William Keenan: Hi
Chetandra Pratap Singh Chauhan: My name is Chetandra Pratap Singh Chauhan. I am contacting you in reference to your recent inquiry to Global BIS, job P17DHL3490.
William Keenan: Hey. Thanks for getting in touch. What’s going on?
Chetandra Pratap Singh Chauhan: With respect to your query, could you please provide the geographic regions for which you would like the data?
“Hey, Ted,” I say. “Just got a message from BIS. For those growth rates—”
“Get ’em all,” he says, still typing away at his computer, his gaze fixed on his monitor. “If they’re asking which geographies, we want global, US, North America, South America, Australia, EMEA, E-EMEA, MENA—the works.” I relay the message to Chetan…Chauhan via messenger.
“Alright, shell’s pretty much done,” says Ted. Using his heels, he rolls his chair back and positions himself behind me. “If you click on the g-drive, you’ll see I saved all the shit down in the latest Weston folder.” Ted is patient as I click and mis-click a couple times, then finally open the correct folder. “So we’ll typically have five or six folders in there—discussion materials, backup Excel for charts and shit, the model if there is one, then reference for the PIB, then other stuff we send to Presentations, BIS, or MAKS.”14 I nod my head slowly as I navigate the various folders with Ted looking on behind me. “Yeah, so I think me and Joel are gonna try to get cranking on the heavy lifting now and hopefully get it out of the way by early tonight, so why don’t you just get familiar with the drive and take a look at the shell and backups and stuff.”
“Early tonight” soon becomes 10:00 p.m. Through most of the afternoon and evening, aside from becoming far too familiar with everyone’s bathroom frequency and duration due to the proximity of my cube to both male and female restrooms, I sit and listen to Ted speaking with Joel on his headset as they methodically go through Gareth’s markup, updating some pages and creating others. At 10:17 p.m., Chetan…Chauhan from BIS emails me with the market growth rates I had requested. Ted has me comb through the source documents and spread the growth rates in a new Excel document—in total, there are five geographic regions for each of the three markets, meaning a total of fifteen numbers to spread.
“What’s the average rate for engineered plastics if you take all the regions?” says Ted.
“Three-point-five percent,” I say.
“How ’bout if you take out any of the regions in Africa,” he asks.
“Three-point-eight percent,” I say, running the average formula, this time excluding the growth rate for the MENA region.
“Fuck that. Do a weighted average of the top four regions—sixty percent for the one with the highest rate, twenty percent for the second highest, and ten percent each for third and fourth. What’s that get us?”
“Okay,” I say, typing in the various percentages next to the appropriate regions. “Wow, now we’re at seven-point-six percent.”
“Perfect,” says Ted. “Do the same for the other markets so they come out between six and eight percent.”
“How do we know about those percentages though?” I ask.
“We don’t—all about optics though. Just footnote the fuck out of it and chalk it up to ‘DB estimates.’” Ted pokes his head behind the partition wearing a wry smile. “That’s investment banking.”
John Bukowski: Do you add restricted cash to cash balance in cap table?
William Keenan: think so
John Bukowski: you have no clue
William Keenan: don’t ask me then. Just footnote it
Jack, my buddy from training who now works in the Power and Utilities group, is also on the forty-fourth floor.
“I also couldn’t find that page Ethan wants from the M&A target section. He said it was in a prior PolyOne deck. I searched—”
“Check the June 1892 CFO meeting deck?” says Ted.
“June 1892?” I say.
“Joking,” says Ted. “But that page Ethan wants doesn’t exist,” he continues. “MDs’ll say they saw some page in a deck and we should re-purpose it, but nine times out of ten, the page doesn’t exist. They just have no fuckin’ clue what they want, and since they know we can’t question them, they’ll just say it exists and we’ll have to come up with something.”
“That blows,” I say.
“Unless we can quickly Inception into the head of the Weston CFO and see what he dreams about, we’ll have to come up with our own shit.”
“I think the comps page is done too,” I say, pulling up the chart that shows the trading multiples over the last five years of Weston and its set of eight comparable companies.
“Is that Calibri? So help me God!” he says with a smile. “We can worry about the font later. More importantly, see this?” Ted taps my screen where the line of one of the companies plummets before quickly returning to the cluster of the other companies. “If that was Weston’s multiple, we’d have to dig in and figure out exactly what happened—maybe something weird with broker estimates, or a piece of bad news was released. The client is going to know exactly what happened there, so we would need to tell Ethan what the deal was. Good news, though, is that it’s just one of the comps, so the Weston guys probably won’t know.” Ted pauses as I nod slowly, trying to register the rationale. “Having said that, what do you think—maybe a plant shutdown or soft-earnings release,” says Ted.
“Are you asking me?” I say.
“You choose,” he says. “My recommendation is we say they had shitty earnings due to a delayed product launch from a manufacturing issue. Sounds specific and believable.”
I smile and make a note.
“Honestly, the key with these books is knowing what’s important. I’ve been to a bunch of these meetings, and they’re all the same—first, the banker and the corporate guy measure dicks, talk about vacations, kids, that type of stuff. Then they do some shitty self-deprecating stuff. Then, if and when they finally open the pitch book, the conversation revolves around one page, usually just one number on one page—a growth rate, a margin, a trading multiple. The important thing for us is to make sure we at least have an answer for where every number came from and identify the key ones. This multiple thing,” says Ted tapping my screen again, “isn’t that important since it was like two years ago and is of a comp.”
“You ever see companies follow through on stuff bankers have pitched them?” I ask.
“Occasionally, but the utility of the meeting for MDs is to just get information from companies. Then, when they meet with one of that company’s competitors a few weeks later, the banker has some good information to pass along. Most of these big companies know what deals they’re gonna do, at least the big ones. Getting tidbits of info to spread around is how these MDs stay relevant. Once the company decides to do a deal, they just choose the bankers they like, usually the ones who gave them the best info, to lead the deal and get the fee.”
“You tug me off, I’ll tug you,” I say.
“Bingo,” says Ted.
“How are we looking?” says Gareth as he walks up to my cube.
“In good shape,” says Ted as he stands. I stand too and nod.
“Splendid,” says Gareth. “Ted, why don’t you take a crack at page eight—punchy bullets. I can provide further color on the next turn. And I know Ethan asked to see the deck sometime Wednesday, but let’s get him a draft by tomorrow, first thing. You know how he can be with his turns.” Gareth exchanges a knowing glance with Ted. “I’ll be on my BlackBerry until midnight or so. Feel free to ping me with any questions. Have an early flight tomorrow, so will be out of pocket until ’round about noontime.” Gareth looks at me then at Ted. “Sound good?”
“All good,” says Ted.
“And Ted, for Project Mercury, can you rerun the model with L+325 on the TLB? Decrease in twenty-five bp increments until pay down is roughly fifty-eight percent on credit case. And do a quick sanity check to ensure those figures align. Then send a bilateral note with updated figures, including lev fin and the senior team. They should provide a little more color around assumptions. If not, please chase the folks in DCM.” Gareth takes a sip of the cardboard box of water he’s holding, “Boxed Water Is Better—Sustainability” in large black font on it. Then he tosses it and returns to his cube.
“What’s Project Mercury?” I ask Ted.
“We’re doing the refinancing of one of the biggest plastic manufacturers in the world. We ambulance-chase these guys a bunch.”
“What do you mean?”
“We advised on an acquisition they did a few years back. The company went to shit, then we did their restructuring. Then took ’em public about a year ago, now doing their debt.”
Ted and I watch as Gareth puts on a dark-blue quilted vest in his cube across the floor.
“He knows his shit, huh?” I say to Ted.
“Early promote to associate, early promote to VP. Probably early promote to director,” says Ted. “Which means he’ll most likely be gone the year he becomes a director.”
“Why?”
“As a VP, he still works for the MDs. He tags along to meetings and stuff and is on accounts, but he’s not bringing in clients. When he’s a director, he’ll be competing with the other MDs, like Ethan, for business. Once he’s a threat to take Ethan’s clients, Ethan will make sure he’s gone. Saw it happen with this other VP we had who was really good a couple years back.”
“What’ll happen to him?”
“Probably end up at some other bank where they need a new young MD to cover industrial companies. It’s revolving doors with these guys.”
“Make sense, I guess. Use ’em till they’re a threat, then kick ’em to the curb.”
“Check this out,” says Ted tapping my arm. Gareth slips of out his immaculately polished, black dress shoes and into a different pair. “His casual shoes are Ferragamos.” Within seconds, Gareth disappears down the hallway.
“Joel should be able to take care of the rest of the stuff. We’ll send to Ethan tonight and probably go over tomorrow at some point with him,” says Ted. Ten minutes later, he slips out of his beat-up brown loafers. “See you tomorrow, man,” he says as he leaves in a pair of New Balance 407s.