UBS is on the lookout for the next generation of dealmakers in the US.
Business Insider recently sat down with Andrea Orcel, the head of UBS’ investment bank, and asked about the firm’s plans for its US business.
The bank finished 2016 ranked 10th globally for investment banking fees, according to Dealogic, 10th for mergers and acquisitions fees and 9th for equity capital markets revenues.
The bank has historically been strong in Asia and in its home continent of Europe, but the US is a tough market to crack.
Orcel said that while the firm had made quick progress in equities and fixed income in the US, it was going to take a while for investments in traditional investment banking to show up. Still, the bank plans to hire 40 of “the right bankers each year.”
Orcel said (emphasis ours):
Where it’s most difficult, and there isn’t a platform effect, is investment banking. You need to attract the right people, give them time to embed with the culture and the place, give them time with the client to get them to agree they can deliver for them, and then get them to deliver. That takes time. It’s not something you can do by saying “I’m hiring 300 people.” It’s one at a time. It is slow but critical because it impacts so many of the other businesses.
The fact that you see us emerging with roles on Walgreens and Molson Coors shows momentum. We are not in every sector; we don’t have the coverage breadth of some of our competitors. So for us to be successful, we really need to get everything right. The sector needs to do well and the banker needs to do well. We have to bring the best ideas and best execution to the table to emerge with a role. This can mean that, by definition, a lot of things can happen away from us.So what are we doing? It’s not about the next quarter. It is about the next five to 10 years. It is by hiring 20, 30, 40 of the right bankers each year. When you hire that number, normally 25% don’t work out; the other ones do.
So, how does UBS identify the “right bankers” each year? Orcel said:
Usually, it’s word of mouth from clients, where you’re told that so-and-so banker is excellent. The difficult thing with the next generation is that you need to find a rationale for them to move, so you also need to be patient.