You might think that a market downturn and an all-but-frozen dealmaking environment would mean that the young employees of Wall Street known for working gruelingly long hours might get a reprieve.
Think again.
Fewer deals does not mean fewer hours, said Eric Stetler, the head of M&A at the boutique advisory firm D.A. Davidson.
“It’s generally about the same,” he said about the length of their days at the desk. “Your activities just shift.”
The White House’s slew of unpredictable trade policies have put investment banking clients in “wait-and-see mode,” as bank execs put it in company earnings calls this week. Indeed, investment banking fees for the first quarter of the year were down by 18% at Goldman Sachs from the previous quarter, for example.
When live deals are flowing, young analysts and associates are known to sometimes clock in 100-hour work weeks. That’s because they’re the direct support staff to senior bankers, whose jobs are to serve and please corporate clients immediately, and at almost any cost. They help their bosses in pitching, due diligence, and deal execution and are often tasked with the more tedious parts of the job like summarizing industry research, formatting financial models, and editing presentation materials.
When deals aren’t flowing, junior bankers don’t suddenly start going home for dinner. They become master marketers.
“For a junior banker that environment’s a little more frustrating I think,” Stetler told BI. “For someone that’s been in it a while, you understand the ups and downs.”
His approach to leading and motivating young employees at his firm has had to adapt with the shifting market.
“Working on business development and marketing skills as someone in their mid-twenties is not a bad thing,” he said, “even though it may not be exactly what you want to do at that time.”
In an interview with Business Insider, Stetler shared how bankers’ roles shift during a slowdown, what juniors should do to make the most of it, and how he motivates his own employees to stay driven.
Related stories
Business Insider tells the innovative stories you want to know
Business Insider tells the innovative stories you want to know
Making lemonade
Though hours don’t change much for junior bankers, activities and tasks do. Analysts and associates go from working on deals to focusing most of their time on involvement in business development and marketing.
“A lot of the administrative stuff that falls behind when the deal markets are crazy, you end up catching up on,” Stetler said.
With little control over the fact that deals are lulled, how exactly can junior bankers make the most of a slow period?
“Having a bit of downtime may give them the chance to work with senior bankers on the items that are important, but get deprioritized when the market is hot,” he said, like industry content, newsletters, and updating transaction databases.
These skills might sound drab to a person who signed up to advise companies and CEOs on multi-million dollar investments. But Stetler said these skills can actually help advance young people’s careers later on.
“Slower periods present openings for junior bankers to think beyond models, data rooms,” he said. “They may be able to learn more about a specific industry through research and content creation or help identify opportunities for senior banker tracking.”
One idea Stetler said juniors can do to impress their bosses: “Outline an idea for a new piece of industry content, get the theme approved by the senior banker, and contribute to the research and drafting of the piece.”
They might also “help review a space adjacent to current sector coverage” to identify opportunities for the team to track going forward.
Overall, it’s important to remain driven and optimistic to make an impression with senior bankers.
“Showing interest in marketing and business development topics as a junior banker as well as keeping a positive attitude really helps,” he said.
Leading through a downturn
Stetler knows a thing or two about beginning a career in a tough market. He graduated from college in 2008, and shortly after started as an analyst at Baird, where he worked for nearly 13 years before joining D.A. Davidson.
“Back then, it was demoralizing. You get into the office, you knew deals weren’t happening, and you still had to be there,” he said of the global financial crisis.
To be sure, he said he doesn’t think we’re currently in a comparable situation.
“I still think where we are with this is, it isn’t permanent. There are things being worked through, but there hasn’t been a slowdown in work.”
To that end, he says he knows it can be challenging for young people to see the forest through the trees. Many junior bankers haven’t seen market slowdowns, and COVID was unique.
“Most junior bankers got into investment banking for the deal experience, and the activities that take place during a slower period don’t necessarily show the same way on a resume. Junior bankers also put in a tremendous amount of work to support transactions — when transactions are delayed or paused, this can impact morale in a potentially negative way.”
But ups and downs are a natural part of a career in finance. Stetler said he and his team are “educating our own people about how this happens, how it works, what comp might look like. There are a lot of things involved with managing.”
The way you respond and handle work during a period like this may even help you get promoted — or not.
“The junior banker experience is about developing various skills, and while deal execution is a big part of it, we want to see they can be a well-rounded associate or even a VP down the line. At D.A. Davidson, we want to promote from within and have a bias for it,” he said.
