Partnership is the essence of the structure of all investment banks. Generally speaking, a partnership is when three or five like-minded people get together and do something secretly, which is similar to a crime. A partnership of more than 200 people must have too many chickens to lay eggs and it is impossible to get it done. Just like a partnership law firm with hundreds of people in China, every lawyer wants to do his own private work. How do individualistic Americans partner in investment banks? Why do we still rely on shares or limited liability to carry out investment banking business after years of collectivism education? This paper decrypts the structure of a standard partnership investment bank for you, hoping to plan your life for you. This company once existed, but now it has been dissolved. It's a standard edition, with a total number of about 260 people, of which 13 is a partner, and the rest are hired backstage support and service guarantee personnel. The front desk ratio is 65,438+0: 20, which is generally accepted by Wall Street. The difference is that the expanded version, abridged version and mini version, such as Goldman Sachs, are composed of more than 1000 partners. The general meeting of all partners is the highest authority of the company. It is held once a year, which is very religious. Usually only two things are discussed. One is to discuss the dividend ratio of the year, and the other is to discuss who among the existing employees has excellent performance and can be recruited. The tax avoidance advantage of partnership enterprises is very obvious. According to the principle of tax payment, shareholders' dividends of joint-stock companies or limited liability companies can only be distributed after paying income tax, and shareholders' interests are after employees, creditors and the government. The enterprise income statement reflects this feature. First of all, the interests of employees are guaranteed by deducting wages and cost interest from the income statement. Second, before interest, tax and depreciation of EBITDA, the interests of creditors are guaranteed. Third, income tax protects the interests of the government. Fourth, the rest are shareholders' interests. From this point of view, minority shareholders are vulnerable groups, and their situation can be reflected from the gloomy expressions of retail investors in the securities trading hall. The tax avoidance advantage of a partnership is that partners pay dividends first and then pay taxes separately, so that you don't have to bear the tax burden for other partners with mediocre performance if you have excellent personal performance. The day-to-day management of the company is the responsibility of the Investment Commitment and Compliance Committee, not the board of directors. Different from limited liability, partners assume unlimited liability, and the commitment and control of investment is particularly important, which may even endanger the survival of individuals and family property. Domestic law firms and accounting firms lack this layer of monitoring procedures, and as a result, they either don't do much business or leave Germany when there are many people. Like all intermediaries, investment banks are intermediaries, and their customers are both sellers and buyers. The business structure of investment banks is centered on sellers and buyers. Investment banks are basically divided into four groups: one is for sellers' business groups, the other is for buyers' business groups, the third is for core guarantee groups serving the above two groups, and the fourth is for general business guarantee groups. In fact, your career started from the grassroots of these groups, and men are afraid of entering the wrong line. If you are lucky or unlucky to step into one of these groups, the future promotion channel will be basically clear. Basically, there are four different occupations, just like working in the aviation industry. Being a flight attendant and being a ground worker are two completely different occupations, which is exactly the same as the old saying. A, the seller's customer group, investment banks, enterprises, local governments, there are only two kinds of seller's customers, need to sell their own equity, creditor's rights or franchise to obtain funds. Sometimes it can be subdivided into retail, science and technology, media and so on. According to the development status, it can be divided into A round, B round and IPO stage. , and can be divided into eastern, western and overseas markets by region. The seller is the starting point of investment banking. Only when the seller agrees to transfer certain rights and interests will there be a series of business follow-up. No more than five people decide their own destiny regardless of the size of the seller's enterprise, namely, chairman, director, CEO and chief financial officer. Knowing this, we can understand some hidden rules of Wall Street. Only the senior partner of the investment bank can contact the seller as the managing director, and other low-level personnel can't disturb the seller's customers. Think about it. The CEO of a Fortune 500 company has been working in this industry for decades. These companies have their own powerful intelligence analysis and information management departments. You can ask for an interview 15 minutes, take out the materials collected from the internet (some of which have his signature) and analyze the company for him. In the huge presidential office decorated with famous paintings, oak and leather, you will find those ten minutes as funny as clowns. In view of this, the first contact with the new president of the target company must be the managing director with the highest position in the investment bank. The meeting place seems random, but in fact it is carefully arranged. You can't be the other party or your own office, and you will be at a disadvantage in momentum. Generally, you will choose a luxurious financier club. The standing board of directors took several assistants and took two famous cars, one driving by itself and the other driving by an assistant. According to reports, the two sides formally know the agents of investment banks (Goldman Sachs has more than 20,000 such small and medium-sized agents, and Merrill Lynch's agent is more than 20,000 salesmen in the sales department of Tianhui Bank). If you are a newcomer to the investment bank, it will be a bit out of touch if you are lucky enough to participate as an attache for the first time. The two protagonists are talking and laughing. The smell of Havana cigars, the quality of yachts in the Caribbean islands and the affair of a senior official whom * * * knows seem to have nothing to do with the theme of corporate financing, but as soon as you go out, the managing director will tell you that it has been settled. In fact, it is difficult for outsiders to detect what the experts have done. After a few rounds, you will know how to compete. Unless you have a unique hidden weapons, the financing target of the enterprise and the price of financial products have long been known by both parties, and the rest is that you, the assistant of the seller's customer base, have supplemented it. The external name of the seller's customer base is corporate financial services department, and the promotion path of this department is analyst, administrative assistant, administrative manager, senior administrative manager and managing director. Analysts will be recruited from junior students of science and engineering or finance in famous universities, and will start working after training. The main course of training is the calculation of cash and future cash flow in finance, also known as DCF discount method of cash flow. Although the name is very big, the principle is surprisingly simple, 1, calculate the cash flow of the enterprise in the next five years, 2, convert the future money into today's money with a specific parameter, and 3, add it together to get the result. In the early days, paper, pens and calculators had to be used. Now with Excel software, it can be done in different ways. No matter what position you are promoted to, DCF is the common financial language. It is very unlikely that an analyst will be promoted directly to an administrative assistant, just as it is difficult for a nurse in a hospital to be promoted to an assistant doctor. After working for two years, most analysts will choose to leave the investment bank and go to MBA. MBA will take two years, 65,438+004 weeks, to help you understand the clients of investment banks, that is, more than 65,438+000 cases of various enterprises. The first choice for MBA graduates will return to Wall Street. In addition to the generous salary, the accumulation of contacts and experience is also an important reason. Just as the army can be appointed as a second lieutenant soon after graduating from the military academy, the starting point of MBA is an administrative assistant. It is expected to be promoted to executive manager in two or three years and senior executive manager in a few years. At this time, you will face the most important choice in your life. Of course, the highest wish is to be absorbed into the partnership. Partners will have lifelong security, much like domestic officialdom, promoted to bureau level, and enjoy lifelong medical security for cadres. If the partnership is hopeless, you should consider preparing your own small PE fund. In fact, analysts, administrative assistants, administrative managers, etc. It doesn't matter to the general manager. Your job is basically the same, just two and a half things, 1, valuation. Prove that the price reached by the two decision makers of the financier club is reasonable in many aspects, just like completing the homework assigned by the primary school teacher, explain in three ways that how many plus how many equals nine. 2. Modeling is the reverse calculation of valuation. 3, half a task, roadshow, cooperate with the buyer group to complete the sales task. None of this was done for nothing. Investment banks will charge considerable fees to customers in advance according to the standard of 5432 1 formulated by Lehman. If they can't get cash, they will convert it into equity. In China, due to the lack of investment banking skills such as valuation and modeling, intermediaries often choose to use enterprises that need financing instead of small fees for writing business plans. After a long time, this simple labor will make people feel depressed, and it will also make many people resign and flee from Wall Street. Fortunately, every enterprise's financing is staged, and every time it faces different enterprises, the usual result will be like this. After signing the enterprise financing entrustment contract, the managing director disappeared like an invisible man. In the next few months, the executive manager will lead the team to cooperate with the corresponding departments of the enterprise to complete the rest of the financing work. You will use this time to get in touch with feelings and accumulate contacts, laying the foundation for future personal entrepreneurship. Another option for the executive manager is to make use of all kinds of network resources on Wall Street in reverse, directly participate in the establishment of entrepreneurial enterprises, and be responsible for corporate finance and risk financing. After several rounds of rapid financing, he finally listed on NASDAQ. On the other hand, all kinds of domestic entrepreneurial teams are mostly technical/marketing combinations. Corporate finance is all self-taught secondary school students with suspicious academic qualifications, and few financial founders transferred from investment banks communicate with entrepreneurial teams of these technology/marketing combinations. It's more of a feeling to coach them in the introductory course of corporate finance. I believe this will be one of the best choices for domestic investment bankers to change careers in the future.
B, the buyer's customer base, the buyer's customers of investment banks are institutions and individuals with idle funds in their hands. In addition to institutions and individuals, it can also be subdivided according to risk preference, industry category, investment scale and whether it directly participates in the supervision of the target enterprise. Some of them want to buy stocks and bonds of enterprises to get more income, while others don't expect much, that is, to change the asset allocation structure and avoid the negative interest rate of real deposits brought about by inflation. An institution set up by an investment bank for the buyer, generally called a sales department, sells stocks and bonds of enterprises/local governments to investors. The sales department has internship sales, sales assistant, sales manager and senior sales manager. Sales does not require high professional background of employees. What is needed is proper wording and natural customer affinity. Don't neglect the coal boss with a strong accent in Shanxi, just as Wall Street dare not neglect the rancher from Texas. Even if you wear a well-tailored Armani suit worth 20 thousand yuan, he can buy your whole company in a rage. Any oriental woman with a good face can quickly become a senior sales manager of a real estate company, and the promotion of investment bank sales staff is often unexpected. In fact, there are not many opportunities to directly contact the buyer's customers in investment banks. In addition to those pension institutions that are in charge of huge funds, more buyer customers are maintained by agents all over the country. When the financial department of the company develops a company stock or bond with reasonable price, the agents and investors who hear the news will snap it up quickly, and the agents can get a commission of 55% for each sale. If you call an agent to buy a stock, no matter how nervous he is at that time, he will try to persuade his clients to buy some, otherwise, the next time there is a good investment opportunity, they will say goodbye. The explanation of this phenomenon is the black hole theory of capital information. Although people are in the internet age of information explosion, all investment information is actually monopolized by financial intermediaries such as investment banks, and it is almost impossible for individual enterprises and investors to cooperate independently. In the field of investment banking, the income of salespeople is stable, but their status is not high. They are second-rate departments attached to the trading department and the company's finance department. Their most frequent job is to cooperate with the team of the company's finance department to carry out financing roadshows all over the country and arrange for entrepreneurs and investors who need financing to meet. The year-end bonus of sales staff shall be distributed by the partners after listening to the opinions of the company's finance department and trading department. If you have a family, a house and a baby, it is a good choice to work stably in the sales department for fifteen years. Core business security group C, remember the fable that the fox coaxed the crow to sing? When the crow has meat in his mouth, the fox will praise the crow's voice under the tree. As soon as the crow spoke, the fox picked up the meat and ran away. Like any seller who cashes in, enterprises will hide far away and enjoy the delicacy and pleasure brought by a large amount of funds after obtaining funds. Investors, as buyers, will instantly change from lofty investors to worried minority shareholders. Years of experience tell investors to protect themselves. One is to introduce external competition and buy the financial products of the target company from your competitor, the joint underwriter. The other is to put forward the corresponding gambling conditions for investment banks, which is the price recommendation of investment banks in a specific period of time. At the same time, you will be asked to provide liquidity protection so that he may withdraw from the investment at any time. Investment banks will set up two key departments to serve investors. One is the research department and the other is the trading department. The research department needs to track the target enterprises and target governments that try to evade the supervision of investors, but it cannot interfere with the normal operation of enterprises. Regular rating has become a good means. If the target enterprise is rated as C-level sales, the top management of this enterprise will have to consider taking the blame and resigning. The research departments of large investment banks can keep their promises. When they downgraded Greece and Spain, the two countries immediately fell into continuous turmoil. A rating company in Shanghai also tried to point fingers at the financial sector, but it attracted laughter. Employees in research departments need to have dual qualifications, one is financial analysis qualification, and the other is professional background in specific target fields such as automobile, real estate and science and technology. The research department also takes the promotion path of internship graduate student, assistant researcher, researcher and chief researcher. After being promoted to the rank of officer, you can gain fame and fortune. The so-called experts that Kan Kan talked about in various financial TV programs are mostly the chief researchers of investment banks. The trading department is another special institution that serves the buyer's investors, and it is also an important symbol that investment banks are different from fund companies. Go back and check the company you work for. If there is no trading department, it can't be regarded as an investment bank in the strict sense. The trading departments of Wall Street investment banks are all composed of Anglo-Saxon blondes, and it is difficult for colored people to integrate.