Our annual schlep around town to hear bankers pitch their deals is always insightful, and not just in considering the eventual winners. There are few better ways to fully appreciate the kind of year the street has had than to go ask the street itself — and this year was no different.
To most outsiders, 2011 was a full-blown annus horribilis for the investment banking industry. But the general rule in awards pitches is to minimise the negative and, as such, many of our meetings this year followed a familiar pattern. “We made our own luck,” bankers told us over and again, while maintaining that the rest of the street was falling apart, doing deals for free, parking risk on their balance sheet, manipulating league tables and living off old mandates. A variation on the same theme is the perennial favourite: “We had some bad luck in backing the wrong horse.”
And, of course, when rival banks worked with non-Asian clients they did so out of their offices in London or New York (which deserves little credit), while their own bank was given non-Asian mandates because of their skills and relationships in Asia and relied on the Asian team to deliver the best cross-border M&A solution possible.
When deal lists didn’t quite support the story, the liberal use of footnotes and asterisks often helped to conjure a league table that gave us a “more accurate reflection of the market”. Thanks.
But it would be unfair not to mention that we also got a fair dose of realism, once the bluster had subsided, as well as an appreciation of the difficulty we faced in making a decision in a year when many deals have lost money for investors. And our job wasn’t made any easier by the growing number of banks attached to most deals.
Indeed, with issuance down and aftermarket performance so poor across the board, bankers had to work harder than usual to differentiate their deal lists, which often meant enlightening us as to who did the real work. The most modest line of the year award goes to the person who said: “We did the negotiating. The other banks just sat in the war room and observed the process.”
Ouch. Although the runner-up line wasn’t bad either. “I love seeing deals where X is sole books,” said one banker. Why is that, we asked? “Because we can get on the deal so easily. It’s like taking candy from a baby.” Ah, the respect.
But the winner for the most extraordinary claim in a pitch book has to go to the firm that assured us it was “the most loved bank”. Needless to say, we didn’t feel much love towards that bank from any of its rivals — many of whom said it was in freefall.
The pitch books this year also demonstrated some rather dubious map skills. One bank impressively appeared to have extended its bond roadshow to the Ukraine and Kazakhstan, until it became clear that this particular dot on the map was meant to mark London. Another bank trying to show off its extensive reach across the globe placed its Scandinavian offices in a part of Sweden that is most commonly associated with Rudolf and his relatives.
The award for dedication to the job goes to the banker who ended up spending six hours on the bathroom floor in a London hotel room, in his boxer shorts, pitching for and executing a rather crucial block trade. Why he was in London? To celebrate his 40th birthday.
Aside from creative pitch books, bankers didn’t bring any props this year to explain the business of their M&A clients. Well, with one exception. Although we must confess that showing us a golf ball didn’t result in quite the same “aha!” moment as when we were shown a flash memory chip or a Kindle at past pitches.
Otherwise, after three weeks of meetings and several trips across the harbour, we can report that banks’ conference call skills are improving, but their dress sense is not. One bank that prides itself on its brains trust filled a conference room with 10 bankers all wearing plain white shirts, which might have been unexceptional in the Mad Men era but in 2011 is just a little scary.
However, we can understand why some banks prefer to err on the side of modesty — letting bankers dress themselves is often a recipe for over-aggressive pinstripes, watches the size of dinner plates and novelty cufflinks.
And since the origin of this “pitch roundup” story was the discussion we ended up having among ourselves about the types of cufflinks worn by bankers one year, we would be amiss not to mention our favourite this year — a pair of sharks that could be made to wiggle their heads as if swimming. Or mauling a woman in a bikini.
On a positive note, some of our team appreciated that your coffee is getting better, so that’s something.