Becoming Frank Quattrone: Investment Banking Lingo 2.0

“Hahah, oh snap! That is hot. Get this though, the other day, this MD accidentally spills coffee on this analyst’s shirt. MD doesn’t really say anything, just goes on working. The analyst is moping around all day whining about his shirt. So finally, the MD drops $100 bill on the analyst’s desk and goes ‘Quit whining and just go buy yourself a new shirt if it’s that big a deal.’ So the analyst is all happy because he got the POS at Marshalls for like $15. But then, the MD says ‘But I own that shirt now, give it to me’ and makes the analyst give him the shirt go the rest of the day with no shirt!”

–MD’s, The Leveraged Sellout

Continuing our series in Investment Banking Lingo this week, we resume today with more essential vocabulary that any good banker must know to get ahead in today’s tough market.

Even Frank Quattrone had to learn the meaning of “Alt Tab” at one point or another (ok, maybe he was born knowing that one…).

Downtime

Typical usage: “I had some downtime today so I was catching up on American Idol.”

What it means for the Analyst: You get a break from staring at Excel and instead get to stare at your web browser.  Just make sure not to do anything too naughty, or your IT department may catch on and alert the authorities.

What it really means: There’s never a constant flow of work in investment banking. Some days are nightmares and other days you don’t really do much, get to go home early and even watch low-quality made-for-TV movies. Since your workload is dependent on whenever the senior bankers get around to reviewing what you produced (general rule of thumb: “I need it by tomorrow” = “Will look at it in 2 weeks”), a lot of time is spent sitting around waiting.  And waiting.  And waiting…

Tips and tricks: The key to using downtime effectively is simple: don’t get caught. Whether it’s using Facebook 4 hours every day like a certain trader at Goldman Sachs, looking at uh, inappropriate sites, installing games or watching that episode of American Idol you missed, you must have a fast way to exit whatever it is you’re doing.  Be alert – don’t listen to blaring music – and avoid suspicion by browsing sites with mostly text.

Alt Tab

Typical usage: “I had some downtime today so I was catching up on House…  VP almost saw me but luckily I Alt Tabbed out of it really quickly!”

What it means for the Analyst: Alt Tab is your lifeline.  Bankers are pretty good at Excel, but we’re actually much better at hitting Alt Tab just before someone notices that we’ve been watching Grey’s Anatomy for the last hour.

What it really means: For those who haven’t yet entered the work world and learned the wonders of Alt Tab, it is a shortcut to quickly switch the visible program on your computer.  So if you have Excel and YouTube open at the same time, hitting the Alt and Tab keys at the same time will rapidly switch between the two.  Brilliant.

Tips and tricks: Alt Tab can be used successfully only when you have advance warning.  If someone pounces on you and sees you looking at Dealbreaker or Leveraged Sellout, it’s all over.  So make sure you don’t listen to blaring music, and try to position yourself in your cube so that you can see any incoming enemies and intercept them with Alt Tab.

Staffer

Typical usage: “Just walked by the Staffer’s office… he saw me and now my weekend is completely screwed.”

What it means for the Analyst: Let’s just say that if you were Spiderman, the Staffer would be Dr. Octopus.  The staffer is your arch-enemy.  He or she can end your life with a single sentence.  Avoid the Staffer at all costs and certainly don’t be anywhere near his/her office on Friday at 4 PM.

What it really means: The Staffer assigns work to Analysts and makes sure work is distributed evenly (theoretically, anyway).  This is one of the most un-wanted jobs at an investment bank, and usually only the most extreme sadists dream of one day becoming the Staffer.  The Staffer is usually an Associate or senior banker who handles this responsibility in his/her “spare time.”

Tips and tricks: Avoid the Staffer on Fridays.  You can try to befriend it, but such beasts are rather difficult to tame, so avoiding it and always looking busy is probably the best strategy.  Just make sure you always have a good explanation for why you’re so busy – the Staffer is a cunning demon and can see through the thin lies you tell.

Closing Dinner

Typical usage: “Sweet!  Closing dinner on Friday in Vegas.”

What it means for the Analyst: Relief.  The Closing Dinner happens after a deal closes and is a celebration for everyone involved.  Usually the finest restaurants, the finest wine, and yes, the finest models and bottles are involved.

What it really means: See above.  It’s a big celebration after a deal closes and you usually get to go to an exotic location (or it could just be Vegas), eat $1,000 dinners and drink ambrosia from the hands of the gods.  And the best part: you’re not paying for it.  It’s one of the most fun nights you’ll have as an investment banker.

Tips and tricks: DO NOT GET DRUNK.  Trust me on this one.  No matter how tempting it is, do not get drunk in front of your entire team and start telling stories of all your crazy youthful adventures.

DD

Typical usage: “Deal is taking awhile… their DD never ends.”

What it means for the Analyst: Waiting and sometimes formatting a company’s financials and other information so you can “add value” before sending them to the buyer.  But mostly waiting to see whether or not a deal is going to happen or not.  Sometimes you get to pretend you’re a consultant too, and you travel to wherever the buyer/seller are located.  Just hope it’s not Alaska in February.

What it really means: Due diligence.  Finding out everything and anything possible about a company you’re going to buy.  This is what private equity firms and VCs do all day.  This is usually a faster process if it’s a financial buyer (private equity) rather than a strategic, where they actually hold onto it for a long time and are therefore quite careful.

Tips and tricks: Remove yourself from the process as much as possible.  If there’s an issue, blame it on your client.  You can’t audit every single bit of information they send over.  Sometimes this tactic doesn’t work so be careful or you might find yourself in the conference room waiting to hear your severance number.

MD

Typical usage: “I completely messed up the numbers in front of my MD… my bonus is gone.”

What it means for the Analyst: If the Staffer is your arch-enemy, the MD is the man behind the curtain.   The Wizard of Oz.  The one giving the orders but not directly ordering the Analyst around.  He has the power to fire or hire you, and he doesn’t play nice.  Be respectful but fearful.

What it really means: The Managing Director.  The top of the heap.  The king of the castle.  He makes rain and brings in deals and revenue for the firm.  The only people higher than the MD are Group Heads and the executives of the firm.  The MD is usually a lifelong, battle-hardened banker who has been through it all.

Tips and tricks: Don’t screw up.  If you do something wrong in front of an Associate or VP, that’s one thing, but screwing up repeatedly in front of the MD is one sure-fire way to assure yourself of a bottom-bucket bonus and no recommendations for those exit opportunities you’ve been dreaming of.

Just Wait, There’s Even More (Maybe)

Lingo is one of my favorite topics so expect to hear more about this one in the future.