Venue: Covent Garden rooftop bar
I just arrived on the scene in Covent Garden. My line manager’s plane took off for Qatar an hour ago and I was finally free. So I decided to meet up with an old friend from grad school who organized a casual get-together. Alex, a German coworker joined me – self invitation.
As soon as we stepped out of Covent Garden station I felt that sweet weekend buzz, not least fuelled by rumours that salaries were going to be increased soon. Plus, I knew I wouldn’t be going in to the office this weekend so I was feeling doubly chirpy.
Walking through the cobbled marketplace square wearing a suit with strong winds blowing in my face made me feel like I was in an Armani ad. Hey, 12 hours of staring at computer screens does strange things to a person…
We walked up a set of stairs leading onto the rooftop and I noticed my buddy Max in a corner. He was chatting to appeared to me as a friendly-looking group of people.
I walked right up to my Max, gave him a light slap in the back and followed up with a hug.
Max: “Hey ibanker, good to see you.”
The ibanker: “Good to see you too, bro. It’s been a while.”
Max: mindful of the others in the circle “ibanker, meet Stephen, Marc and Aurelia.”
I went through the motions, said hello, shook hands and gave a kiss on one cheek to the lady in the group. Though it (kiss) merits a slap in some parts of the world, thankfully, you can do it in London without fear.
I quickly introduced Alex and he went through his motions before swiftly heading to the bar.
Max: “ibanker studied with me at LSE. Yes. But he went on to bigger and better things.”
The ibanker: with a disapproving smile “Ah, cut the bullshit Max. If I could have, I’d have gone for a PhD.”
Max: jokingly, “ibanker always liked the idea of being called a Dr.”
The ibanker: “And Max teaching a class full of carefully chosen young women. Desperate for grades.”
Max giggled. We all laughed.
Alex returned with two Peroni’s from the bar and handed me one.
Max: “Actually, Stephen here is an entrepreneur and he was just telling us about his business he’s selling to an…an…American buyer, right?” looking at Stephen for acknowledgement and receiving it, “yeah that’s right.”
That was one of the quickest ways of getting a banker’s attention. I turned up the concentration dial in my brain from 39.4% (suitable for small talk and general banter) to 77% (apt for general business conversation).
Stephen: “Everything is moving fast. The guy wants to buy our business but he’s very aggressive. We’ve gone back and forth so many times I feel I need a damn holiday.”
Max: “Just sell it and then take a bloody two-month holiday in the Greek Isles.”
Stephen: “Hmmm. Yeah but three long years have gone into this. Three years. It’s literally been non-stop. We didn’t make a pence until the end of our first year. And we’re finally, just now, beginning to see steady cash flows. The price has to be right.”
I was intrigued. What are the numbers? Turnover? Profit?
Max: still addressing Stephen “You think his offer is too low?”
Just as I moved in closer to hear Stephen’s answer my Blackberry went off. Ringer volume on full blast got everyone’s attention and disrupted the conversation. I looked at my handheld. It was a pain-in-the-butt colleague from Legal. Lawyers are generally some of the most difficult people to handle in an investment bank. Can’t blame them really. How can you expect any human to remain sane after writing and editing buy-side M&A, sell-side M&A, non-disclosure and mandate agreements day after day ad nauseum. The fuss these guys made for spotting a missing comma in a draft agreement was the sort of protest you’d expect to hear if a pilot forgets to deploy the landing gear on time. My heart went out to them. Then again, somebody had to do it.
The lawyer was in fact trying to get hold of Alex, who just noticed he had two missed calls. I handed him my phone and he began chatting with Captain Comma. Thirty seconds passed and Alex handed me back my phone. We return to the group.
Max: “Everything cool?”
Alex: “Yes. It’s the office. Nothing important. We just closed a deal and there’s some follow up to do.”
FYI, Alex is one of the most arrogant bankers you can come across in the business. The poster banker everyone demonizes. When chatting with the rest of us in the team, he’s fairly normal. But as soon as he steps out of the building and runs into non-bankers he takes on a condescending attitude and an authoritative tone. Secretly wished he had been named Cesar. The irony was that he was tiny and had the facial expressions of a cartoon character so people didn’t take him seriously.
Max: “They have you guys by the balls over there.”
I smiled. If he only knew.
Aurelia: “My flatmate is a banker and every time there’s a deal, I barely see her. She gets stressed to the max.”
The ibanker: “It’s often like that. A curse of the job really. But this wasn’t a big transaction. Just a small liability management deal.”
I quickly realised nobody understood what the hell a liability management deal was.
The ibanker: “Basically a type of financial transaction where a client buys back debt.”
I’m fully aware that most non-finance people prefer to watch a knitting contest than to hear about finance deals so I attempted to throw the discussion back on Stephen’s company. However, I dug myself a massive hole I could only get out of with the help of a Sherpa.
The ibanker: “Anyway, it was a small $150 million deal with little revenues earned so not even worth describing. We didn’t even circulate a notice on the intranet.”
Nobody says a word. Shit. Sometimes you forget that what constitutes a small deal for the bank is unfathomable for some. I generally made a conscious effort to take this into consideration but…well…it had been a long day and even longer week.
Alex: “So does the American want to acquire the whole company? 100%?”
Stephen: “Yes, all of it. But it’s just a–”
Alex: cutting off Stephen and jumping to the next question, “Is his offer significant below your desired target?”
Stephen: “It was initially, but we’re getting closer to an agreement. I want him to give me 15,000 more. He has offered 70,000. This isn’t a”, making a finger quotes gesture, “mega deal.”
Alex: “70,000. Interesting. Pounds?”
Alex: “Dollars. Interesting. Well, I wouldn’t fuss over that sum but good luck.”
Alex immediately took out his blackberry and started going through messages. It was clear by his reaction that he had lost all interest. 70,000 was peanuts. What’s worse, everyone around could tell he was now indifferent to the conversation. I was embarrassed.
The ibanker: “What kind of business do you run?
Stephen: “It’s a lifestyle slash productivity blog.”
The ibanker: “I see. I’m no expert but I know that blogs can grow very big and become quite profitable, like the Huffington Post. Why don’t you continue to grow it, especially now that you’re generating good cash flows?”
Stephen: “I’ve thought about it but just prefer to sell. I’m not longer motivated by the work. The next person can grow it much bigger I’m sure but I’m done with this chapter. Besides, I’m going to launch a collaboration website later this year so I prefer to focus on that going forward.”
The ibanker: raising my Peroni bottle in the air, “To your imminent sale and to your next venture.”
As we toasted, I turned around to make eye contact with Alex and noticed he was scanning the area in search of other interest points. Alex had lost touch with reality.
Issue: Bankers can live in a bubble.
Note to self: must remain grounded and in touch with reality.