Big Dog job alert in Tech I-Banking
There’s a big job about to be filled on Bay Street, but there is still be time for you to get your candidacy considered.
On three different occassions over the past seven days I’ve been told of an active headhunter search currently underway for the Head of a Technology Investment Banking group. Managing Director would be the title. And, with the right credentials, you’ll probably be named the Head of Techonolgy, Media and Telecom group!
My guess is that if you are currently well-ensconced at a good firm, you should be able to negotiate yourself a “lumber contract” to give you some protection as you rebuild the coverage model and get to know the sales desk. (For those unfamiliar with the term, a lumber contract is the number of millions you are guaranteed to be paid for a certain number of years. As in 1×3, 2×2, 2×3 or 3×3. One million a year for three years, Two million a year for two years, etc.)
There are some catches, of course. Few jobs that pay $1 – $1.5 million a year come without any strings whatsoever.
Catch #1: “Face Time” is very important at this firm. Face Time is that classic i-banking reference to the need for people to see you in the office at all hours of the day and night. Actually, you shouldn’t be in the office during business hours, as that’s when you’re expected to be pitching. But for the morning meeting and over the dinner hour, you’ve got to show your face. Otherwise, the Head of Investment Banking will assume that you’re not trying very hard to fatten the coffers. And he gets paid $3 – $4 million a year (salary, bonus, MTIP, LTIP and options) for his effort, so you’ve got to do your part.
You can expect to work at least 48 weekends each year, even if some of the work consists of sitting on the dock at the cottage reviewing pitches that have been emailed to you by hard-working Analysts and Associates back at the shop. (Here’s a hint. Focus on font choices, semi-colons, hash marks and typos; that’s what drives the Head of Investment Banking crazy. Sloppy periods and semi-colons. But he’s a good guy nevertheless.)
Some of the most successful upwardly mobile players at this firm figured out long ago that you didn’t actually need to be at your desk to get full marks for Face Time. The trick is to leave your suit coat on the back of your chair. Do not hang it in a closet. When they see the jacket, people will assume you are somewhere on the floor attending an important meeting, a bought deal committee, a beat-up session, whatever. (Whenever you see men in the Toronto PATH network walking in shirtsleeves to get a coffee or their drycleaning, it’s not that they don’t own a suit jacket, it’s just that they left it hanging on the back of their chair).
If a senior partner comes looking for you, and finds neither you nor your suit jacket, he’ll (and every senior partner at this firm’s main office is a he btw) assume you’ve left early to see your family for dinner and question your commitment to the new role.
This “coat on the chair” trick is perfect for squeezing in a game of squash, a “gentlemen’s workout” (which is a visit to the steam room), buying a gift for your spouse (as a make-up for not being home for a weeknight dinner for the past 6 weeks) or grabbing Taco Bell for lunch at 3 p.m. No one will know your secret except for me; and, of course, the other “coat on the chair” practitioners at your new shop.
Catch #2: Being good internally is more important than being good with clients. Oddly, this firm values your ability to fit in with them more than the depth and breadth of your client relationships, your not-for-profit work or your political connections. They do not want different personalities to round out the team – they want folks that fit a mold and bite their tongue when problems arise.
If you are one of the gang, your chances of success will be substantially higher. And by gang I don’t mean that you get along with the Analysts and Associates. They are cannon fodder; treat them as such. That approach has worked for many an i-banker on the rise.
To succeed you must get along with the other Group Heads, the Head of I-Banking, the Vice-Chairs and the CEO of the firm. Don’t come across as threatening, and be sure to laugh at their jokes – particularly the sexist ones. There will be a few attractive female Analysts and Associates in the firm, and don’t demonstrate a glimmer of discomfort if a Vice-Chairman comments on the bust of a young team member. That’s just the way it is there.
Oh, and if you really want to get tight with the I-Bank’s CEO — focus on golf. If your handicap is 5 or better, get it down to 3. You will be idolized and sent hither and yon to help the firm cover its top golfing clients. Florida, Palm Springs, Pebble Beach. Even if they aren’t Tech CEOs.
If you are a star golfer, the CEO will admire you and there’s a good chance that you can truly succeed there. If your handicap is 20 or higher, don’t mention the golf thing, even if you belong to The Toronto Golf Club and there’s a risk that you might be seen by your new colleagues out on the course. 20+ handicaps are just so not good for the firm’s image.
Catch #3: The firm has never been comfortable with financing technology companies. They once turned down a fast-growing tech client as the software engineers had all been recruited from the Russian Military. Something about that gave them butterflies. Even though the CFO of the company was well known and trusted by the institution. The stock is up about 8x since that fateful meeting. Easy come, easy go.
It is hard to believe that serious and experienced people are being recruited for the job, given the absolute lack of commitment to the sector. That’s not to say they don’t have technology research analysts, as they do. And the guys are experienced fellows. They are ranked, “on the grid”, and get trades sent their way from the large institutional investors. But for a variety of reasons, the firm just has little interest in the space.
Although the sales and trading desk have no problem working their magic with small and mid cap Oil & Gas and Mining plays, there’s a strong aversion to Tech firms that don’t fall into the category of RIM, Cognos, Open Text, MDA, etc. And since those firms don’t need any capital, you’ll be hard pressed to lead any financings.
Which leaves M&A as your only avenue for generating revenue. But that’s a very competitive market, and you’ve also got to contend with the likes of Lazard, Merril Lynch, Goldman and Lehman. They don’t need trading and sales coverage to win Canadian mandates, either. Even if you win the beauty contest, you’ll have all of these internal M&A practitioners “helping” you on the file and you’ll be forced to split the points on the deal come bonus time should there be a fee-paying event.
Catch #4: There’s nowhere to go from here when things don’t work out. And, despite your best efforts, they won’t work out for the firm on the revenue front. Every firm on Bay Street needs the entire team to be behind a sector for you to be able to win financing mandates. You’ll need trading, you’ll need institutional sales desk coverage, you’ll need a Research team that covers stories with market caps of less than $500 million. That’s how you win leads, which is where the real fee juice is — and the commensurate bragging rights for the firm.
Once your lumber contract expires in two or three years, you’ll be on the street with your career in tatters. Everyone will know that things didn’t work out, and the fact that you had a lumber contract at your prior job will make it hard for the smaller brokerage firms to find a chair for you. To make matters worse, you’ll have been forced to cease covering the small cap issuers during this odyessy, so when you try to rebuild your tech i-banking career at the next firm, you may well suffer from many an unreturned voicemail.
My advice is this: if you fear you’re about to be pushed out of your current role, take this job. You are buying yourself at least two more years on Bay Street, and that’s a smart move given the alternatives. There is a chance that if you are a scratch golfer you can use this job to cozy up to the CEO and then transition away from the Tech team to a sector that’s more viable – a high risk move, but possibly a viable strategy.
If you take this job you’ll just wind up being miserable, and so will your family. What could be better than being a highly paid Head of Technology Investment Banking at this particular dealer, you ask? Just about anything, and that certainly includes your current gig.
Trust me on this.