In light of recent events and mass layoffs, do you guys think that IB’s will start to charge less for their services? Deal flow must be extremely limited right now and so you would think competition for transactions would be higher. As a buy-sider, I always cringe at the amount we have to pay our advisers for their seemingly limited services. Granted if they can get us more $$ for an asset we are selling or an asset for a cheaper price if we are buying then sure its worth it. But from my experience so far it seems like my group does the majority of the work on a deal and the bankers reap the majority of the benefits. Thoughts?
Yes. And bonuses, if there are any, will also be down. It’s all down hill from here. Party’s over. Move along, nothing to see here…
I-banks won’t be using the balance sheet like they used to, so likely the risk premium will reduce. That said, I-banking fees have been remarkably resiliant over the years, should be interesting.