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Sometimes, we only appreciate an exceptional moment with hindsight. In 2021, investment bankers around the world might be just too exhausted to recognize this is a once-in-a-lifetime boom in their careers. But it is, and it’s not over yet.

When U.S. investment banks aligned themselves with report their results Last week, bank after bank, among them, reflected on the extraordinary increase in fees charged on M&A advice and Equity Capital Markets (ECM), and the fact that – for now – the boom shows no signs of slowing down.

TO JP Morgan, for example, CFO Jeremy Barnum noted that the bank’s M&A costs tripled in a market that doubled in a record quarter. At Morgan Stanley, CEO James Gorman said M&A bankers had their own record quarter and the pipeline remained strong. Morgan Stanley Chief Financial Officer Sharon yeshaya said the money raised earlier in the pandemic has yet to be used by financial sponsors (private equity funds), that “the pie is changing” and “businesses are looking for growth”.

For bankers hoping to rest over the holiday season, the message is clear: it won’t happen yet. The start of 2022 will not bring much respite either. The fourth trimester can be calm, noted Devin Ryan, senior research analyst at JPMorgan Securities, but this year it won’t be quiet at all. Many PSPC transactions are still running in the system and will generate M&A revenue. “Deals will close in the fourth quarter, first quarter, second quarter of next year. So that revenue line will improve, ”Ryan said. This year’s M&A announcements amount to $ 6.5 trillion in annualized volume; in the previous record year (2007), they amounted to $ 4.5 trillion.

With the boom likely to continue until 2022, banks will be reluctant to part ways with bankers and will therefore be under pressure to pay hefty premiums for 2021. However – and despite some excitement about the impact on compensation – there is little evidence that earnings are in any way keeping pace with earnings. At JPMorgan’s merchant and investment bank, compensation expense increased 11% year-to-date; Mergers and acquisitions fees collected are up 85%. At Goldman Sachs, compensation expense per employee is up 27% year-over-year, while M&A revenue is up 105%. Most US banks touted their “operational leverage” last week, with costs remaining relatively stable alongside revenue flexibility. In an industry where single-digit returns on equity had become the norm, double-digit returns are now everywhere. – The big beneficiaries of the boom are the shareholders.

If you’re an exhausted investment banker who has spent 2021 juggling multiple transactions, that doesn’t make it a bad time. – In terms of salary and bonus, it’s now about as good as it gets. However, this may mean that if you wanted to rest before the summer of 2022, the best way to achieve this would have been to change jobs in the third quarter. It made perfect sense: not only could you have negotiated a great salary in your new home, but you would have had a few months off from gardening before next year. Since the boom is expected to continue, you’ve probably also redeemed your entire bonus as the banks competed to hire you. This could explain the rush of announcements to recruit senior bankers in places like Citi recently.

Moreover, it is said that there is a certain gloom at Goldman Sachs, where senior executives have would have was forced to leave the opulent 41st-floor offices of New York headquarters on the 44th floor and hang out in a “cubicle grid” accessible via a spiral staircase from the new “Sky Lobby” on the 11th floor. The move is an initiative of CEO David Solomon, but Solomon would “travel all the time “and is therefore absent from the cabins anyway.

During this time...

Citi has hired investment bankers. It is added 200 bankers in its merchant and investment banking branches globally, including in its tech, healthcare and fintech practices. (Bloomberg)

David Solomon, CEO of Goldman Sachs, said that even when business slows down, investment bankers will still have more to do than before as the pool of fees will be larger due to “growth in the world’s market capitalization and growth in economic activity around the world. ” (Alpha Street)

The Bank of England says the crypto market could cause a financial crisis. it’s double the size of subprime debt in the United States on the eve of the 2008 financial crisis and urgently needs to be regulated, the bank said. (Bloomberg)

Citi’s top trader, Matt Zhang, has set out to create a $ 1 billion crypto fund. (Bloomberg)

Goldman’s stock price is up nearly 50% this year, but it is trading at just 10x futures earnings, compared to 14-15x for Morgan Stanley, JPMorgan and BofA. Despite the growth of Goldman’s consumer banking business, it is still viewed as a risky investment bank. (Financial Times)

There are more women than men on Goldman Sachs’ online banking team. “We often find ourselves in deal teams where the entire GS team is made up of women, and that’s something we’re proud of. It’s also something that sets our customers apart. ” (Bloomberg)

Pension funds are crammed into alternatives in search of returns. “Alternative” investments now represent 24% of public pension fund portfolios, up from 8% in 2001. (WSJ)

It’s a confusing time to be a venture capitalist with face-to-face meetings. Sometimes you need to take a COVID test first. Sometimes you hide in the elevator and unmask yourself in the meeting room. “It sounds like a bad dance in college where no one knows how close they are to the other person.” (Bloomberg)

Nik Storonsky of Revolut has opened a family office to manage his $ 7 billion fortune. (Thames)

French parliamentarians were previously known for their six-hour champagne lunches with 22-year-old “research assistants”. (Financial Times)

London taxi company Addison Lee is offering £ 5,000 ($ 6.9,000) for four weeks of work to recruit drivers amid staff shortages nationwide. (Bloomberg)

BlackRock’s Larry Fink, Blackstone’s Stephen Schwarzman and JPMorgan’s Jamie Dimon board a coach to see the Queen as Britain tries to woo billionaires in recent France style. (Bloomberg)

“I was that girl on a Friday night in London, dressed to perfection, trying to meet a banker, and I dated footballers. But I will never stop working or relying on a man to fund me and give me what I want. ” (The sun)

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Photo by Jingda Chen on Unsplash

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