Fall of William Blair
Need to start a thread on this. Just saw another tech MD left for BGL, which is clearly saying something. ~3 MDs left for Gugg in the last 2 years, Baird took their head of MedTech, and that’s just the churn at the senior level. The junior level is just as bad. They laid off ~30% of all IBD, including first year analysts. They gave 65% return rates to the interns this summer. Feel free to add to this list if I missed anything, but seems like Blair is a violently sinking ship. Can anyone comment on deal flow?
Any insight on what set this off? Blair was heralded as the greatest thing since sliced bread 12-24 months ago on the forums. The partnership model, hours, WLB and comp were all supposedly top notch.
What changed? Just lost a few good MDs to EBs? Were they not comping the guys at the top enough? Maybe they've been hit extra hard or had an extra wind at their back for a while because their core strength was Tech?
Not throwing blame, but the downfall started like literally 3 months after the head of IB because CEO and they got a new head of IB. Obviously market took a turn for the worst around then, but timing seems too perfect to call it a coincidence.
Also not like they lost MDs to Moelis or GS. They lost them to Gugg MM, Baird, and fucking BGL lmao. The BGL poach can say enough.
Guy became head of their group. But further, there’s more to the story.
Separately, What do you think pays better becoming head of a mm group or being a number at Evercore?
MD economics aren’t analyst economics. Often taking “downgrades” are how MD’s actually make money. Either starting your own firm or going to a less well known practice with better economics are how MD’s make more. Otherwise mms wouldn’t be able to attract the best talent. Just use a little common sense, please.
But going deeper, analyst layoffs are cyclically the right thing to do and many other firms are doing the same. PE firms and banks are all slowing hiring and cutting heads, we were in an expansion, now it’s slowing. This isn’t WB specific.
Firm is fine, but much like other banks, their volume and transaction size in tech is going to be much lower for the next several years than the last several years. Smart bank ceos are slowing hiring/ cutting in those areas otherwise they will have too large a team for too little deal flow.
Just because someone moves to a lower tier group, doesn't mean that wasn't a preferred outcome for both sides. Often, groups like BGL pick off the mediocre performers.
Congrats on Moelis
Congrats on Baird.
Baird was imho always better
The attitude of any current or former Baird Analyst/Associate that I have ever dealt with leads me to believe those guys' bosses beat them with telephones and staplers all day.
WSO always has flavors of the month. A few years ago it was RBC, then recently Gugg, then Blair. Goes to show that you can't take one or two years of reportedly good comp / culture and then proclaim them as the second coming.
This is driven by how many interns/analysts post here to hype up their own banks.
Always have to take these things with a grain of salt. Most of the people shitting on banks on this site are college kids who got rejected from their SA program.
Lol I remember when Allen & Co. was the old Centerview Partners
I remember when Tobin & Co. was supposed to be the next top EB alongside PJT and Evercore
I just lol’ed. anyone who works at Blair, especially in tech, knows exactly why he’s not at Blair anymore
what happened?
Former Blair analyst here. At least from the tech side, Blair was crushing it over the past few years with a lot of $100 - $500M software deals fueled by sponsor buy & build rush. Bias aside, I really doubt that they are in a massive decline. My PE fund is still seeing decent amount of deals from them but no one is really lining up to buy burning hairy businesses for 10x+ ARR. I don't really know the politics of the firm but the economic climate isn't really kind to them and bankers moving from one place to another isn't that big of a deal. 10 years ago, Blair really built out their tech group by poaching folks from Jefferies and the likes.
It's their comp / partnership structure. Basically because of the way they hired in the last two years their MDs won't be making that much for at least the next 5 years due to the way their payouts work. They told the senior MDs this and they've been leaving since then.
Do you know how that comp/partnership structure works? I'm considering WB and interested in knowing about it.
How many MDs have left?
5
They will be fine in the long-run. Their business model (high volume, sponsor-focused deals) is at a cyclical trough right now as it is still very hard to get financing and sponsors are hesitant to exit at lower values.
IMO, there is already a backlog of 2018/2019 vintage businesses growing and once the COVID-acquired businesses start to enter year 3+ next year there will be a massive spike in deal activity again.
.. or BK lmao.
*buys at 20x ARR*
*buys industrial biz at 14x+* "trust me guys its non-cyclical, we've transformed the biz"
PE in particular (as well as non long duration fixed rate CRE) better PRAY we are not higher for longer. But if the Fed cuts, many portcos will have declining rev/EBITDA at that point (recession). Maybe M&A will heat up (for the wrong reasons) but Fund returns will suck.
PE PortCo's are already cash flow negative in many cases - fuck your "PF Adj EBITDA" - "Real cash flow" is negative and sponsors are SWEATING. Two options: inject equity / find some dumbass PC lender willing to essentially fund your burn, or take out a NAV loan against your fund's equity investments....
Blair did exactly what they wanted to do in 2021 (capture bull market upswing but hiring like mad) and partners were clipping $20M+ checks in 2021. Markets gone down and now they’re laying off the bottom of the totem poll. Like others have said, cyclical industry and at the end of they day they’re looking to make partners rich vs protect junior talent.
Should someone take a Baird offer over WB because of this? I would argue they’re the same at the end of the day, no huge difference in junior experience so prioritize group / location / etc.
Good example of how a bank isn’t you friend - they’ll use you in good times and cut you loose as soon as you’re no longer needed
30% of the IBD is "bottom of the totem poll" ?
It’s theoretically bottom 30% so it is literally the bottom of the totem pole…
In the last few weeks...Citi is dead (thanks Fraser), GS is dead (thanks DSol), WB is dead, Barc is dead. Anything I've missed?
Y'all are so dramatic.
Lol. I get a laugh whenever the bi-monthly "What's the most toxic IB group" thread gets posted again by a new user and within 2 hours every bank on Wall Street has been called out.
Maybe we're all just over caffeinated assholes lol.
Former analyst here. I think it would be impossible to truly impress upon you all how much over-hiring went on at Blair, even through mid-2022. I’m talking doubling analyst sizes / hiring do-nothing MDs, etc.
The layoffs were really done in a callous way and I know some people who had their lives messed up / offers revoked because they didn’t let their manager know that they were leaving.
That said — I think the core business is fine. They have some really sharp partners running Healthcare and Tech.
What do you mean by offers revoked, like they rescinded incoming analysts’ offers?
The person who this thread is about hadn't done a deal in YEARS...WB is fine. Fun fact he wasn't even a Tech MD at Blair when he left.
if every employee at Blair was as dedicated as I am to the job, Blair would be the modern day Roman Empire
I for one am looking forward to 10% bonuses
Layoff % in original post is incorrect. Was not 30% of IBD. More like 5-6% of total headcount, with some groups (HC & Tech who massively overhired) facing cuts upwards of 30%.
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