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Investment Banking Groups: The Legend Of UBS LA

Despite my best efforts to convince prospective bankers out there that it’s your team that really matters rather than whether you’re in a “prestigious” group or not, people still ask questions about the “best groups” out there.

And one name that comes up repeatedly is UBS LA. Just reading about the firm on the UBS LA Vault message board is enough to strike fear into the hearts of young wannabe bankers everywhere:

“This office is not for the light hearted. Plan on working on average about 18 hours a day, 7 days a week… If you screw up on something, you can generally expect never to be staffed with that team again unless there is really a staffing crunch. This office is not that forgiving of mistakes and once you build a bad reputation, it will always stay with you.”

People obsessed with “ranking” the bulge brackets will usually say Goldman Sachs TMT (Technology, Media & Telecom) or Morgan Stanley M&A are the “best groups.” But UBS LA has traditionally been #3. Why is it so good? Why do Analysts there work 18 hours a day, 7 days a week? Why are mistakes punished with execution?

Rainmakers Supreme

More than location, it really comes down to making rain. And specifically, the Managing Directors who led the LA office. Back in the days when LBOs were actually happening (before the dark times), Ken Moelis, head of the LA office, brought in some of the biggest deals in the industry. Univision, Harrah’s, Hilton, Adelphia, Petco, Albertsons - all giant LBOs that were among the biggest since KKR’s Nabisco buyout in 1987. And they were all UBS LA deals.

Other stars included Navid Mahmoodzadegan, Head of Media Investment Banking. Dealmaker (a private equity and deal magazine) named Navid “Top Rainmaker” in 2006 and put him on the “Top 40 Under 40″ dealmakers in 2007. He was part of many of the buyouts mentioned above, and had big name clients, including Adelphia, Clear Channel, Liberty Corp., NBC, Susquehanna Media, Univision and Westwood One.

The bottom line: UBS LA was where many of the most significant deals of the 2000’s happened, and was superb for LBO and M&A experience.  Just working there could give you a golden private equity resume.

Then There Were The Analysts

From my friends who worked at UBS LA, I can tell you that the Vault account above is no exaggeration. Their lives were pretty miserable, and they suffered worse than most investment banking analysts. Things were bad, even by banking standards. Some of the senior people were actually… crazy. As in, needed-medication-to-stay-sane-crazy. So it wasn’t a place you would want to go to for models and bottles.

The upside was that placement for UBS LA Analysts tended to be spectacular. Many of them went on to work at KKR, Blackstone, Apollo and other prestigious private equity firms and hedge funds. You suffered a lot but could get an awesome job afterward.

The Rise And Fall Of The UBS LA Empire

If you are reading carefully, you have noticed how I keep referring to UBS LA in the past tense. What happened to this empire?

Moelis, Head of Banking and the LA office, left to form his own firm, Moelis & Company. And he brought many of his stars with him, including Navid Mahmoodzadegan.

Why?

There was a deep cultural divide between the UBS LA office and the conservative Switzerland UBS. The LA office pursued every deal under the sun and always wanted to offer aggressive financing to get them done, but the parent company - conservative, European UBS - was very reluctant to use its balance sheet to get deals done.

Plus, the senior bankers realized they could make way more money on their own in this frothy market environment and saw little reason to stay there.

So Is UBS LA Still Good?

Yes, but not as “legendary” as it once was. If you have the chance to work there, by all means do so. Just don’t expect that it will be a sure-fire ticket into KKR.

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6 Comments »

Comment by Justin

Has Ken Moelis carried this rigorous environment over to his new firm?

Applying to banking is like buying a lottery ticket…

-Justin

Comment by Inquisitor

I have no idea what Moelis’ new firm is like actually… one friend had a chance to work there and turned it down because he said it would be “painful.” it’s definitely like buying a lottery ticket, though you can minimize risk if you can get into a firm like GS where they emphasize teamwork over stars.

 
 
Comment by The Prince

Moelis leaving was huge. Still a great office with a good reputation. Of the three people I know who did analyst stints there 2 ended up at KKR in Menlo and 1 ended up a Apollo in LA. Yet, we all know that going to KKR after an analyst job is a bad move, i.e. terrible work environment and advancement opps. Lots of analysts at MS and GS turned them down this last year. KKR was one of the last big name PE shops to fill their associate class.

Comment by Inquisitor

Yeah it boggles my mind why people would actually want to go to KKR, what a waste of time/life. Heard they were really behind on recruiting a year or two ago so they’re starting earlier… though I’m sure Analysts will realize how much it sucks and still turn them down.

 
 
Comment by ikemen

hi Inquisitor,

can you tell me why you’re emphatic (”what a waste of time/life”) in saying that getting a KKR gig now is bad?

i dont quite understand, i thought it’s way up there in the PE shop rankings?

thanks!

Comment by Inquisitor

Hi there,

Yes, KKR is up there in terms of PE rankings. But you also work 100 hours a week (AGAIN) and are basically an Excel jockey (again). And as Prince said above, the advancement opportunities are not too great there… they’ll generally work you as much as possible and then make you go to business school (at the minimum) to advance further.

In general I believe mid-market PE shops, hedge funds and such are better for most people unless you really have no issues with spending your whole life working until the age of 30-35.

 
 
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