Morning Coffee: The Moelis & Co bankers who had 10 mad days. Hedge fund head said to make an analyst cry
In the days of yore, Moelis & Co., the boutique investment bank founded by legendary banker Ken Moelis, had a reputation for working people hard. This was supposed to change with the arrival of its new CEO, Navid Mahmoodzadegan who'd witnessed his own daughter's exhaustion in a banking job, but after the past month, one team at Moelis & Co. is almost certainly feeling the burn.
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Moelis & Co. was the lead financial advisor in Netflix's $72bn acquisition of Warner Bros, and the Financial Times suggests it was a heavy grind. Warner Brothers was sold in an auction that followed an "extraordinarily compressed timetable," says the FT. Within this timetable, the Netflix bankers worked the hardest.
Bloomberg reports that the sale of Warner Brothers kicked off in mid-October. Paramount made two bids that were both rejected as too low. By November 20th, Warner Brothers had three bids - from Paramount, Netflix and Comcast. Warner Bros then asked for binding offers by December 1st - the Monday after Thanksgiving.
Between November 20th and December 1st, the Moelis & Co. bankers seem unlikely to have either slept or to celebrated Thanksgiving. When their bid came in, the FT reports that it was unusually detailed. Those 10 days were spent "addressing every request, tightening covenants and agreeing a $5.8bn break fee, among the largest on record," says the FT. By comparison, Comcast and Paramount emerged from Thanksgiving with items they still needed to negotiate.
The all-nighters continued last week. Bloomberg says the 'Netflix team' stayed up on Thursday, finalizing their plans for announcing the deal on Friday. That team includes Spencer Wang, who was once the head of media research at Credit Suisse, but who's occupied the hypothetically more restful role of head of corporate development at Netflix for the past 10 years. The Moelis & Co. bankers aren't named, but seem likely to include John Momtazee, Moelis' global head of media in LA, and his acolytes.
John at Moelis wasn't Netflix' only advisor. Wells Fargo was also present after providing a $59bn bridging loan following the lifting of its seven-year asset cap in June. Allen & Co. is said to have done the modelling for the deal. Large fees will be earned, but not in time for this year's bonuses. The deal isn't expected to close for 12-18 months. Paramount may yet submit another offer. It could be a busy Christmas, too.
Separately, being an analyst at a hedge fund isn't always easy. Much depends upon the portfolio manager(s) you work with, and whether they a) listen to your ideas and b) pay you for them.
The Wall Street Journal suggests that being an analyst at hedge fund Sequoia Capital Global Equities may have been particularly painful. Jeff Wang, the fund's head, stepped down in February, and the WSJ alleges that this follows complaints from his team about their treatment. Wang allegedly shouted at them and made one analyst cry. This has not been confirmed, however, and Wang has not commented for this article.
Meanwhile...
Marc Nachmann, Goldman Sachs' head of asset and wealth management, was behind last week's $2bn acquisition of Innovator Capital Management. “Wherever you put Nachmann he makes things better,” said a Goldman veteran. “He’s unemotional and gets stuff done, which is why Solomon loves him.” (Financial Times)
Inigo Fraser Jenkins, the London-based co-head of Institutional Solutions at Alliance Bernstein, says passive funds have created a "dystopian symbiosis" and feedback loop between index funds and platform giants like Apple Inc., Microsoft Corp. and Nvidia Corp. that concentrates power, stifles competition, and gives the illusion of safety. (Bloomberg)
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More than 1 in 10 private credit borrowers are deferring cash interest payments and at least 45 firms have been taken over by their lenders, the most in six years. (Bloomberg)
Citigroup is now worth the sum of its parts. (Bloomberg)
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Jeremy Hunt made £50k in a week by making speeches to banks. (Financial News)
Citi hired Jillian Snyder from Bank of America as its head of capital introductions for North America. (Reuters)
David Kostin, chief US equity strategist at Goldman Sachs, says young people need to: "Think about one's role and how that fits into the broader business environment. If you understand where you sit and your contributions to the commercial process, then you can see how that changes over time." (Business Insider)
UK graduate Rose was one 2,700 applicants when she tried to get a job in the City of London. She moved to Singapore instead and is now a consultant with a higher salary, a lower tax bill and is saying things like: “I feel like my trajectory is completely exponential and it’s accelerated by being here, it would all be wasted if I went back to London.” (The Times)
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