MBA Advisor: Best Investment Banks To Work For In 2019

They’re getting closer. You can hear their steps, see their shadows, and feel their breaths. Slowly, these upstarts have been closing in on you. You wonder: How long can I hold them off?

Goldman Sachs knows that feeling all too well. For years, Evercore has been inching nearer-and-nearer to Goldman Sachs in the Vault Banking 50 ranking – the industry benchmark for banking reputation and quality of life in this rough-and-tumble industry. Would this be the year when Evercore finally arrived as the best North American investment bank to work for?

PRESTIGE IS THE CORNERSTONE OF THE RANKING

Well, Evercore will need to wait another year. In the 2019 Vault Banking 50 ranking released today (August 8th), Goldman Sachs retained the top spot for the third consecutive year – matching Blackstone’s 2014-2016 run in the Banking 50. It was hardly an easy run for the firm derided as “Government Sachs” and a “Great Vampire Squid.” Five years ago, .587 of a point separated the firm from Evercore in the ranking. Two years ago, that gap had shrunk to .201. Now, the firms are nearly even – 8.431 vs. 8.372 – easily the smallest margin since JP Morgan edged out Goldman Sachs by .07 of a point in the 2012 Banking 50 ranking.

What was the defining difference? To understand that, it helps to look at the methodology behind the Banking 50, which began in 2007. Developed by Vault, a leading collector of market intelligence for employer ratings and reviews, the Banking 50 starts with a survey to banking professionals in two key areas. First, bankers evaluate their peer firms on “prestige” – which measures perception and reputation as much as performance and personal experience. In addition, respondents score their own employers in 19 satisfaction-related categories, including pay, training, leadership, corporate culture, upward mobility, long-term outlook, and work-life balance. Every question is answered using a 10-point scale (with 10 being the highest score).

Overall, 2,800 professionals completed this year’s survey, up from 2,400 who participated in the 2018 ranking. To formulate a firm’s score, each response – or cluster of responses – receive a certain weight. Considering the value placed on stature and influence in banking, prestige is stressed the most in the Banking 50 formula, receiving a 40% weight. Firm culture accounted for 20% of the ranking, with compensation, business outlook, and overall satisfaction each pegged at 10%. Work-life balance and training (5% each) round out the formula – with 2019 weights remaining the same as those used in the 2018 ranking.

STRONG IN PRESTIGE – AVERAGE EVERYWHERE ELSE

Like previous years, prestige was the factor that separated Goldman Sachs from the pack. 150 years old, Goldman Sachs is draped in myth and steeped with authority. The brand conveys merit, wealth, and global reach – dealmakers par excellence, so to speak. The training ground for the 1%, Goldman Sachs alumni rolls boast stars who’ve gone on to serve as government leaders, chief economists, CEOs, and media mavens. They include expected names like Treasury Secretary Steve Mnuchin and CNBC’s Jim Cramer, along with unexpected additions such as Australian Prime Minister Malcolm Turnbull and CNN Host Erin Burnett. For many, Goldman puts the “gold” in gold standard – with a work hard-play hard ethos that draws many of the brightest and most ambitious talent. To hopefuls, it offers unmatched training and exposure, which serve as an exit ramp to the leadership roles in nearly any field.

Not surprisingly, Goldman Sachs notched an 8.898 score in prestige, nearly .75 of a point above runner-up Morgan Stanley in this category – and nearly 1.8 points above Evercore. Technically, Goldman Sachs’ prestige score represents a .06 of a point drop over the previous year. That said, it is also the firm’s second-highest score in this category over the past seven years – with the firm’s high water mark coming with the 2009 Banking 50 at 9.131 (a score it attained just weeks before the economic downturn). That’s an impressive score regardless of category, but one that’s inflated by the methodology’s 40% weight. Beyond prestige, Goldman Sachs often finds itself as an also-ran.

Goldman Sachs employees conversing in the New York cafeteria

How far down is Goldman Sachs? In fairness, Goldman Sachs placed among the top 15 firms in 18 of 19 satisfaction categories. That said, the firm’s average placement was 10.3, a number buoyed by CSR (3rd), International Opportunities (6th), Benefits (8th), and Internal Mobility (9th). More notably, however, Goldman Sachs finished 13th in compensation, 15th in culture, and 14th in both leadership and long-term business outlook. Such numbers belie a workforce that feels underpaid, marginalized, and dubious of leadership and direction – an observation that is reinforced by a 12th place finish in overall satisfaction. Compare that to Evercore, which ranked among the Top 10 firms in 17 of 19 categories (5.84 average), or Centerview Partners, the Banking 50’s 3rd-ranked program which only ranked outside the Top 10 in one category (with a 5.15 average, no less).

WHY LEAVE THE OFFICE? GOLDMAN SACHS SUPPLIES EVERYTHING

This reflects an ongoing trend in the banking industry says Derek Loosvelt, senior finance editor at Vault, in a press release. “This year’s rankings again show that although Goldman is in a class by itself when it comes to prestige, boutiques like Evercore and Centerview continue to close the gap between the big firms and boutiques when it comes to being a top banking employer. Typically, the boutiques offer healthier work environments, with more forgiving cultures and much better hours.”

Does that mean the rankings are rigged towards Goldman Sachs, with the firm’s forte – prestige – receiving double the weight of the next highest category? Hardly, says Loosvelt in a statement to Poets&Quants. Instead, the Banking 50 weights mirror what bankers have told Vault about what is crucial to practitioners in the field.

“We base our ranking methodology on what insiders tell us are the most important factors when it comes to deciding which firm to join,” Loosvelt notes. “We don’t ask them why prestige is important, though. My opinion on why it’s so important for banking professionals is that prestige carries weight when it comes to getting into grad schools and getting other jobs at other firms (exit opportunities). Prestige typically translates into working on larger, more high-profile assignments, which can make for a better learning experience (if professionals are very involved in those deals) and thus help advance professionals’ careers.”

Still, Goldman Sachs possesses that allure – and delivers on it according to employees who completed Vault’s spring survey. The firm was described as “energetic,” “innovative,” “teamwork-minded,” and “client-centric” by staffers – a place filled with “supportive people who are smart and focused on career development” according to one member of the firm’s private equity practice in New York City. Other execs touted perks like on-site child care, gym, and even food – meaning most people stay in the office because they have everything they need on-site. In fact, one Seattle staffer even describes Goldman Sachs as “home.”

To see 5 pages worth of ranking and satisfaction data on the Vault Banking 50 ranking, go to page 4.

Goldman Sachs staffers in New York. Courtesy photo

A MERITOCRACY THAT VALUES “THE HUSTLER”

“It is a place you come every day to see and work with the people that fill your life with great substance and intellectual curiosity. It is place where you not only start a career, but you grow and nurture a career. And it is a place that greatly values its employees equally, if not more than, its own clients and business; a place where people value each other with the highest degree of respect and trust.”

It’s certainly not for everyone. Some survey respondents describe the firm as a “risk averse” enterprise slowed by “red tape.” However, that’s part of the bargain with any big firm, as one New York staffer calls the firm “demanding and stressful but rewarding and fun.” That may have to do with the culture, with one member of the sales and trading desk feting the company as “meritocratic,” a firm for “self-starters” who thrive in flat structures and possess an entrepreneurial spirit.

“Goldman Sachs culture values the hustler,” opines one wealth manager in the San Francisco office. “You have to be willing to come in and get the job done every day. Everyone around you is working to maximum capacity and expects you to do the same.”

Better yet, it is a firm with something for everyone, whether they are seeking a stepping stone or a platform to rise in the ranks internally. “This is the best possible place to start a career,” adds a San Francisco partner in the 2018 survey, “because it provides a great training ground, a wonderful network, and it opens so many doors. And if you stick with it, it’s a great place to build a career.”

Incoming Goldman Sachs President David Solomon

NEW GOLDMAN SACHS PRESIDENT – A FORMER DJ – EXPECTED TO SHAKE THINGS UP

It is also a firm slated for big changes in the coming year. David Solomon – a former DJ who once had a dance single in the Top 40 – will be succeeding Lloyd Blankfein as President of Goldman Sachs come October 1st. Popularly known as “DJ D-Sol,” Solomon is hardly a financial dilettante. Instead, he spent a decade as joint head of the firm’s investment banking division before becoming co-COO in 2016. Considering Solomon’s banking background, writes Loosvelt in an August post for Vault, many expect the firm to shift further into consumer banking and away from more “volatile” and “high-risk” endeavors.

Based on Solomon’s track record, Loosvelt himself believes he’ll loosen the reins at Goldman Sachs to make it more transparent and friendly to tech-savvy Millennials. After listening to Solomon tap into his DJ background during podcasts, Loosvelt writes the firm may soon become more values-driven, socially conscious, and life friendly.

“If culture starts at the top, this could mean that outside passions will be even more welcome than they already are at Goldman. Which reminds me of that ubiquitous phrase “Bring your whole self to work.” Overused, yes, but certainly important and relevant, as it points to the growing value that young talent places on the ability to be themselves in their jobs, and to bring all of their talents and interests and passions to the workplace.”

NO BETTER PLACE THAN EVERCORE TO BEGIN A CAREER

This strategy may also help the firm distance itself from Evercore in next year’s rankings. This year, the firm was poised to unseat Goldman Sachs, but failed to make the close. On one hand, Evercore’s prestige score cracked a 7 average for the first time. Even more, it ranked among the Top 5 firms in eight workplace categories, including 2nd for Business Outlook, Firm Leadership, Formal Training, and Hiring Process – and 3rd for Compensation and Informal Training. However, Evercore’s scores dropped in 10 of 19 categories, including ranking 11th for Client Interaction and 12th for Benefits – numbers that hindered it from making up further ground on Goldman Sachs’ inherent prestige advantage.

Looking ahead, Loosvelt believes Evercore features the fundamentals necessary to continue its steady rise in the Banking 50. “Evercore was founded by two heavy hitters on Wall Street, one who came from Blackstone, another from BlackRock,” he shares. “These are very prestigious, connected, accomplished firms. Together, they’ve been able to create a firm that lands advisory deals that typically only the largest Wall Street players could land. Plus, the firm is smaller compared to the big players, meaning it has a gentler environment. You’re not just a number like you might be at a bulge bracket; at Evercore, you’ll probably get to interact with the founders and other top managers. So, the firm offers young banking professionals a chance to work on significant deals and get excellent senior banker contact in a congenial environment.”

Evercore, an investment banking advisory firm, ranked 2nd overall in Vault.com’s 2019 Banking 50 ranking

Survey respondents echo Loosvelt’s optimism in Vault’s recent employee survey. They praise the firm for its “growth trajectory,” “exceptional deal flow,” and “unparalleled quality of life.” An entry level mergers & acquisitions staffer also lauds the firm for supplying interesting work and exposure to senior management, adding “I can’t think of a better place to begin a career.”

“THE NAVY SEALS OF M&A”

That’s not to say there aren’t drawbacks. Like most investment banks, heavy workloads and unpredictable hours are the norm, with the lack of a 401K match particularly galling to survey respondents. However, such snags are easily outweighed when staffers look at the bigger picture according to another M&A staffer. “Evercore has an excellent culture, by far the best on the street. In addition, you will be compensated materially higher than your friends at bulge brackets, even at the first-year analyst level.”

Respondents also cited Evercore’s low turnover rate, one grounded on an apprenticeship model where new talent is exposed to some of the industry’s best minds.”[We’re the] market leader with small teams working on the most important transactions,” explains one of the firm’s partners. “There is a reason why the best of Wall Street continues to come and work at Evercore.”

That reason is clear to one New York staffer: “If you join Evercore, you will join the Navy Seals of M&A entry level mergers and acquisitions.”

Metaphors aside, does Evercore have the abilty to overtake Goldman Sachs? Loosvelt doesn’t rule it out, but isn’t shy about listing the hurdles that Evercore will face in clawing to that last .06 of a point. “Goldman Sachs has a history and brand name and client relationships that are very tough to beat,” he admits. “It also provides so many more different types of products and operates across the world – it has a larger footprint. So its name recognition and ability to offer international opportunities are also hard to beat. That said, if Evercore keeps doing what it’s doing, landing large deals, and its name gets more widely recognized outside of financial circles, and it continues to offer a congenial working environment, sure, it could gain some ground on Goldman in prestige.”

To see 5 pages worth of ranking and satisfaction data on the Vault Banking 50 ranking, go to page 4.

BOUTIQUES INCREASINGLY REPLACING BIG BANKS IN THE BANKING 50

Centerview Partners and Greenhill & Company continued last year’s momentum, where three boutique banks held Top 5 spots in the Banking 50. The former held onto the #3 spot, increasing its distance over Morgan Stanley to .272 of a point. By the same token, the latter knocked fellow boutique Moelis & Company out of the Top 5. In fact, boutiques now represent 7 of the 10 firms in the Banking 50, a select group that also includes Guggenheim Securities, Lazard, and Perella Weinberg Partners. This recent ascension of boutique firms is hardly an anomaly, says Loosvelt.

“They’re now landing the type of large and high-profile deals that once only the bulge bracket banks landed, and smaller firms are typically able to be more nimble and forgiving when it comes to workplace culture; it’s much harder for larger firms to change workplace policies and the way things have historically been done.”

At 300 employees, Centerview Partners could comprise less than 1% of Morgan Stanley’s 58,000 employees. Despite this, the firm has emerged as a juggernaut, advising on pending deals like Sprint-T-Mobile and 21st Century Fox-Disney – not to mention running point on deals involving Cisco, Conagra, and Avaya. It has also emerged as a beloved firm, ranking atop the Banking 50 for Compensation, Firm Leadership and Hiring Process – along with finishing in the Top 3 for Promotion Policies, Ability to Challenge, Business Outlook, Culture, and Relationship with Managers. Despite this, the firm’s overall score dipped by .022 of a point. With that came greater separation between Evercore and Centerview, with the difference growing from .003 to .086 of a point.

CENTERVIEW DESCRIBED AS THE “TALENT FACTORY FOR THE NEXT DECADE”

A harbinger of things to come? You won’t hear Centerview staffers complaining. One M&A executive tags the firm as “the talent factory for the next decade.” Another New York staffer commends the “high-profile, complex, and diverse deal experience” at the firm, while another takes direct aim at a competitor. “At Centerview, you work on the same quality of deals you see at Goldman Sachs,” writes one Palo Alto exec, “except with significantly better client exposure and comp.”

Blair Effron, co-founder of Centerview Partners

It hasn’t been difficult for the firm to recruit talent. Aside from high pay and opportunity, Centerview Partners differentiates itself with a mentorship culture geared towards developing junior bankers. “Centerview takes a long term perspective in what it does,” adds one employee from the 2018 survey, “and prefers candidates who are open to the possibilities of a long term career with the firm.”

Centerview respondents also described the firm as “collegial” and “fun,” a place where management respects personal lives and root for each other’s success. Those same terms were also bandied about by survey respondents for another upstart: Greenhill & Company. Despite being a public firm with 340 employees and 16 locations worldwide, the firm has maintained a consistent culture grounded in teamwork and humility.

GREENHILL EARNS HIGHEST MARKS IN WORKPLACE SATISFACTION

How well does the firm follow its principles? Among Vault’s 19 quality of life survey measures, the firm ranked #1 as the best company to work for in 10 of them: Ability to Challenge, Client Interaction, Culture, Hours, Internal Mobility, International Opportunities, Promotion Policies, Relationships with Managers, Satisfaction, and Work-Life Balance. And Greenhill ranked among the Top 5 in four other categories. So why wasn’t the firm a shoo-in for the top spot? Simple: Greenhill’s Achilles heel is prestige, the most heavily weighed factor in the Banking 50.

Here, the firm scores a 5.748, good for 12th overall but a .406 of a point drop over the previous year – a score that could stem from an unexpected $26.65 million dollar loss in the 2017 fiscal year (though Greenhill’s bullish first quarter should boost its prestige for the 2020 ranking). Still, survey respondents remained relatively upbeat, with 93.7% of respondents giving the firm four stars or more on a five star scale. While below Centerview’s 96.1% pacesetter, Greenhill’s satisfaction rate still beats out fellow boutiques like Evercore (92.8%), Perella Weinberg (85.4%), Moelis (81.8%), and Lazard (56.6%) – not to mention Goldman Sachs (77.6%) and Morgan Stanley (74.3%).

“The business outlook [at Greenhill] is very positive,” writes one mid-level M&A staffer there. “Great place for someone who is a solid team player, doesn’t want to get burned out, and is keen and ready to take responsibility early.”

HOW DO YOU SPELL DIVERSITY: BofA

Overall, Guggenheim Securities made the biggest jump in the 2019 Banking 50, climbing from 20th to 8th, an improvement driven by Top 5 finishes in 11 workplace categories, including ranking 2nd in Benefits, Compensation, CSR Initiatives, and Employee Satisfaction. In contrast, PJT Partners, the spinoff of Blackstone’s banking unit, tumbled from 10th to 21st – the result of declining to participate in Vault’s employee survey.

PJT Partners wasn’t alone in that regard. Among major banking players, JP Morgan and Credit Suisse also opted out, adding an asterisk to Top 10 finishes for several so-called “elite boutiques.”

Vault Finance Editor Derek Loosvelt

Along with prestige and workplace categories, Vault also queried banking professionals on their diversity efforts. In this area, Bank of America shined, ranking 1st overall, including top diversity scores for women and LGBT, along with placing for 2nd with minorities. The reason was simple, says Loosvelt. The firm gave far more than lip service to diversity initiatives.

BOUTIQUES EXPECTED TO GROW EVEN MORE

“Bank of America truly focuses on diversity and inclusion, and insiders tell us as much,” Loosvelt observes. “The firm has internal groups and affinity networks for LGBTQ employees, women, minorities, disabled individuals, and veterans. It has a global diversity council that’s chaired by the firm’s CEO. Among other things, it supports Pride month and was the first financial services firm to offer domestic partner benefits (dating back 20 years now, I believe). A lot of firms say they support diversity and inclusion, but it’s all window dressing. BofA seems to really follow-through.”

What should banking professionals look for in the year ahead? Loosvelt, for one, expects boutique banks to rise in prestige. Translation: the status quo could be upended soon enough in areas far beyond industry perception.

Keep an eye on Evercore, Centerview, and Moelis,” he advises. “Evercore and Moelis rose in our Prestige Rankings, and Centerview is a solid top 6 firm in Prestige. If you look at the 2017 M&A league tables, you’ll see that these three firms made pretty big leaps vs. 2016, meaning they’re landing more deals and bigger deals. Thus, they’re offering great deal experience for young bankers, maybe just as good as the bulge bracket banks. If this trend continues, which seems likely, they should rise in prestige and rise in the Banking 50 rankings.”

Click on the following links for detailed ranking and satisfaction data on the Vault Banking 50.

Overall Ranking – Vault 50 Ranking

Prestige Ranking – Vault 50 Banking

Satisfaction Rates (Benefits, Compensation, Culture, Leadership, Training)

Satisfaction Rates (Hours, Internal Mobility, Overall Satisfaction, Work-Life Balance)

Diversity Scores (Overall, Women, Minorities, LGBT)
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