Bulge Bracket: All That?
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Bulge-bracket investment banks are the luxury brands of the industry, the ones everybody wants to work for. Does the imminent demise of Lehman change this view?
When I started working in the City, it was a fairly interesting entry role at a top institution, which, although not being amongst the top three, was considered a bulge bracket employer. But new to the industry, I was oblivious to the differences between the Bulge Bracket, Tier 1 and the rest.
When my first job ceased to be interesting, I was offered a job at an institution outside of the Top Five, and the resignation and transition process quickly became a very interesting learning experience about how banks perceive each other in our industry.
My future employer loved hiring 'former bulge-bracket employees' since they had to be top-notch. Meanwhile, my soon-to-be former employer was trying to convince me of the mediocrity of the bank to which I was moving, and was openly doubting my intellect given the decision I had taken. Clearly, the lower ranks loved hiring from above, but you'd have to be nuts to move this direction.
Over a number of years and a number of employers, I found myself turning down jobs at institutions I deemed too small to be interesting, and refused to consider less interesting jobs at larger institutions. I also found myself developing a certain Brand Obsession, wanting to move again to one to the top institutions, if only for reasons of being able to say that I had worked there.
However, in the last year, this perception has changed. My current employer, a large but by-no-means-bulge-bracket bank, has - just like everybody else - been impacted by the credit crunch. It has however, compared to other institutions, fared relatively well and does not have to report disastrous numbers every single quarter. While it might not have been amongst market leaders, it has also managed to attract talented individuals and has continued to do good business in the areas in which it chooses to be, and in areas where the changing markets have opened up a competitive advantage.
Speaking to friends working for Lehman, whose demise seems imminent and unavoidable, I realised that for once it might pay off to be in a place that manages risk relatively prudently and is focused on growing a sustainable franchise rather than raking in money from a few high-risk businesses.
These friends will be paying the price for gung-ho management and excessive risk taking for which they are not responsible. They are good at their jobs but not involved in strategic decisions; hence they are at the mercy of those in charge and are now suffering the consequences for poor decisions.
It certainly is sexy to work for a Top Tier institution when times are good and everybody associates you with the very best of the industry. But now it seems that with Lehman, the second bulge bracket bank to disappear after Bear Stearns, there's hardly anything sexy about watching your company share price hit zero.
It's kind of like how it's sexy to drive a Ferrari until you put the Ferrari against a wall and realise that you might have been better off in a slower car.
When my first job ceased to be interesting, I was offered a job at an institution outside of the Top Five, and the resignation and transition process quickly became a very interesting learning experience about how banks perceive each other in our industry.
My future employer loved hiring 'former bulge-bracket employees' since they had to be top-notch. Meanwhile, my soon-to-be former employer was trying to convince me of the mediocrity of the bank to which I was moving, and was openly doubting my intellect given the decision I had taken. Clearly, the lower ranks loved hiring from above, but you'd have to be nuts to move this direction.
Over a number of years and a number of employers, I found myself turning down jobs at institutions I deemed too small to be interesting, and refused to consider less interesting jobs at larger institutions. I also found myself developing a certain Brand Obsession, wanting to move again to one to the top institutions, if only for reasons of being able to say that I had worked there.
However, in the last year, this perception has changed. My current employer, a large but by-no-means-bulge-bracket bank, has - just like everybody else - been impacted by the credit crunch. It has however, compared to other institutions, fared relatively well and does not have to report disastrous numbers every single quarter. While it might not have been amongst market leaders, it has also managed to attract talented individuals and has continued to do good business in the areas in which it chooses to be, and in areas where the changing markets have opened up a competitive advantage.
Speaking to friends working for Lehman, whose demise seems imminent and unavoidable, I realised that for once it might pay off to be in a place that manages risk relatively prudently and is focused on growing a sustainable franchise rather than raking in money from a few high-risk businesses.
These friends will be paying the price for gung-ho management and excessive risk taking for which they are not responsible. They are good at their jobs but not involved in strategic decisions; hence they are at the mercy of those in charge and are now suffering the consequences for poor decisions.
It certainly is sexy to work for a Top Tier institution when times are good and everybody associates you with the very best of the industry. But now it seems that with Lehman, the second bulge bracket bank to disappear after Bear Stearns, there's hardly anything sexy about watching your company share price hit zero.
It's kind of like how it's sexy to drive a Ferrari until you put the Ferrari against a wall and realise that you might have been better off in a slower car.
Here Is The Writer : Square Mylo
Square Mylo came to London with the intention of staying six months and never left. He has worked in Canary Wharf and in the Square Mile, but still maintains a clear conscience since he's never worked in Mayfair. Being a banker is his true calling. Maybe he should have listened more closely.
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