Fifteen Minutes: The Boys In the Bank

The hardwood floors are the clincher. Looking around Yadin Shemmer's apartment, I can handle the fax machine in the kitchen, the antique-looking toy cars, the huge red leather couch in the living room. But hardwood floors? In a spacious two-bedroom apartment, in a swanky building on the Upper West Side? A building with a doorman? For a 24-year-old?

Maybe there's something to this investment banker business.

Yadin Shemmer is sprawled on the couch with his morning orange juice, looking crisp in a blue dress shirt, khakis and slicked-back hair. After graduating from the University of Pennsylvania in 1998, Yadin moved to the city to work as an analyst for Broadview, a boutique investment bank specializing in high-tech firms. There are thousands of young people like him in New York, working a two-year stint in finance, sporting dress shoes and bulging billfolds. From the outside it looks like the lifestyle of a GAP ad--urban excitement plus youth plus heaps of money.

But what do investment bankers do, anyway? The long hours and fat paychecks are legendary. But the vast majority of seniors who wander into the recruitment fair each fall probably have no idea how they'll actually end up spending all those hours. Is this productive, meaningful work, as exciting and intriguing as the brochures claim? Or just old-fashioned drudgery at a hundred hours a week? Is the young analyst an empowered executive or simply a glorified wage slave?

We haven't even left Shemmer's apartment yet, but it looks good so far.

BUSINESS CASUAL

"I never wanted to be a banker," Shemmer says. "But I thought they were the nicest people."

Shemmer lived in New York growing up, but was born in Tel Aviv--there's an Israeli flag in his bedroom and a military uniform in his closet. A psychology major at Penn, his only real business experience in college came almost by chance: one summer he found a job at an Israeli Internet start-up, as a secretary, but the strapped company promoted him on the second day. Shemmer's job at Broadview was equally unplanned. Unlike better-known investment banks, Broadview limits its business to the high-tech sector--Internet start-ups, Web-based companies, computer firms. Broadview's partners and analysts advise those tech companies on mergers and acquisitions, from finding potential targets for mergers to negotiations to finessing the final deals. It's definitely a niche market, where experience in the computer world is more important than test scores or grades. Shemmer never intended to find a job in the technology sector but was impressed by the company's casual style.

All the analysts I meet emphasize how laid-back Broadview is. "My hours are better than my friends at any other bank," Shemmer says--a mere 75 or 80 hours a week, compared to as much as 100 at larger banks. At the biggest firms, the partners conduct "bed checks"--stopping by each cubicle at 9 p.m. to make sure analysts are still at work. At Broadview, I'm assured, you might even get out the door by 7 on a good day. The style is strictly "business casual," which means no one under 30 wears a tie. Shemmer stresses how friendly the senior partners are, how receptive they are to analysts. It sounds suspiciously like a PR presentation for a hapless recruit. (Of course you'll have access to your professors! The dining hall food is delicious!)

The money can't hurt either. Shemmer earns $45,000 a year plus $20,000 to $25,000 in annual bonuses, which are based on evaluations from higher-ups. (The median income of American households was $38,885 last year, by the way.) At that salary, Shemmer can afford his portion of the $2,400-a-month apartment he shares with a college friend. Still, everything's relative. Although Shemmer invests his annual bonus, he spends the rest. "I break even every month," he confesses. His three main expenses: rent, alcohol and cabs. Shemmer spends most Friday and Saturday nights partying with friends at "dives" in the East Village, a welcome change from the weekday grind. It's a pleasant lifestyle, but very different from college, Shemmer says. "I'm working, I'm supporting myself, I feel productive," he says. "Do a good job at work, bust ass, pay rent--you feel like a grown-up."

As Shemmer sings the praises of the investment banker's life, we're speeding in a cab across the George Washington Bridge into New Jersey. Broadview's "New York" office is actually in Fort Lee, N.J.--not exactly Wall Street. One analyst tells me later that "it's nice to be in a suburban area. It has its advantages--it makes a more relaxed attitude at work." "Relaxed" isn't the first word that springs to mind, though. The office is in a bland white building overlooking the interstate on one side and a busy street lined with fast-food restaurants on another. At least the view of Manhattan is magnificent--as Shemmer leads me on a tour of the office I take in the architecture of the bridge and an unobstructed view of the city, all the way to the Empire State Building. The interior look is upscale "Dilbert"--partners' offices surrounding rows of cubicles done up in a tasteful grey.

The youthful nature of the office quickly becomes obvious. I spot one refrigerator filled with nothing but V-8--30 or 40 bottles. (Drinks are free and apparently unlimited in the multiple kitchens.) Everybody we meet in the halls looks just like Shemmer--twenty-something guys in blue shirts, khakis, dress shoes. With all the backslapping and put-downs, we could be in the MAC as easily as a corporate headquarters. We meet a temp in the kitchen and the talk inevitably drifts to fraternity life at college.

But despite appearances, this is a workplace, and after a quick tour of the halls it's time to get down to business. I immediately learn where these investment bankers spend their 80-hour weeks: in cubicles, in front of a computer monitor. This is an Internet economy, and Shemmer conducts the vast majority of his business online--trading e-mail messages, surfing the Web, with an occasional phone call to lighten the glow of the screen. Shemmer writes a report the way Harvard students write papers, stopping every 10 minutes to check his e-mail. He estimates that he gets between 50 and 100 e-mails a day.

I sense trouble when Shemmer checks his overnight voice mail. There's a message from one of his superiors, and he sounds "mildly pissed." Apparently a report that Shemmer sent over yesterday contained a single incorrect figure about revenue growth, the result of a minor mathematical error. ("Banking is like that--we're detail, detail, detail oriented," Shemmer explains. "No spelling errors, no errors in numbers. It has to look professional.") Shemmer dials the boss on speakerphone. "Dino, babe," says the senior staffer caustically. Without a beat, Shemmer explains the error and tells him it's been corrected. "I apologize for the oversight," he says. (The lesson seems to be, never mention a problem to your boss without fixing it first.) The edgy reply: "Good. Don't do it again."

The crisis defused, Shemmer turns to one of his personal tasks, maintaining Broadview's restricted list of stocks. If any employee gains inside information about a stock, no one at Broadview can trade it. Shemmer is responsible for maintaining the restricted list, which changes hourly. The list reads like a who's-who of the technology industry. (Insider information could be a significant problem for an investment bank: Even in the course of researching this article, I learned about several upcoming mergers that could have netted a well-timed profit on the market.)

The list matters because the stock market is every analyst's favorite hobby. Shemmer and the other analysts trade stock prices like sports scores, bragging loudly about their stocks from their desks. Shemmer has more than $11,000 of his own money invested in the market, mostly in risky, especially volatile "penny stocks" that can be bought in huge quantities. "Make your fucking move!" he shouts at one dawdling stock. But he's proud of a company called Zamba, which started out in the morning at $5 a share. It's up to $5.50 by the time he settles down at his desk. "Look at Zamba! I'm making a slow killing!" Shemmer shouts. The other analysts grumble.

A WELL-DRESSED LOCKER ROOM

The analyst's job is all about research, and we quickly settle into the morning routine. The high-tech world at the end of the millennium is a vast free-for-all, with companies scrambling to acquire one another and grow exponentially. Shemmer's job is to sift through thousands of unknown firms and select likely acquisitions for his client, a software company. The client is looking to expand its operations in the Northeast and Shemmer wants to present them with as broad a menu as possible.

Shemmer already has a list of potential targets this morning, compiled from every possible source--ads, word-of-mouth from friends, industry newsletters, random searches on the Web, even advice from competitors. Creativity pays off. One analyst hunts down computer science majors at MIT to find out where graduates are headed. As we browse one start-up's Web site, Shemmer notices that its on-line customer response forms are maintained by a company he's never heard of. That company immediately goes on the list.

The search is efficient, even brutal. If Shemmer can't deduce what a company's Web address might be, it's history. "That's it," he says. "I might ask someone, but..." One target's Web site is unattractive and poorly designed, lacking basic information about management and investors. Shemmer sends them a curt e-mail telling them to shape up, then moves on. With practice, the culling goes quickly, Shemmer says. "There's a ton of shitty companies out there. It's like 80-20." Once he identifies a likely prospect, Shemmer places a call to the CEO for more information, then drafts a one-page summary of the company for his client, a time-consuming prospect. "It takes a while," he says. "You have to dissect a company in an hour so the buyer can figure out, 'Do we want this?'"

A friend from Penn calls. A senior, he's considering taking a job with one of the big downtown banks. Shemmer is indignant. "Ninety percent of the analysts hate it," he tells his friend, a fraternity buddy. "There's no guarantee you're going to make more money." His friend wavers, and Shemmer hones in. Shemmer instinctively organizes his pitch into bullets and subpoints, neatly lining up Broadview's advantages and the competitor's downsides like he might at a client presentation. It's a habit of the analyst mind. Later, when a new co-worker asks how to do a particular task, Shemmer responds, "Walk me through it. Why would you do that?"

At lunchtime I discover one of the particular perks of working at Broadview. Most days, analysts prefer to grab fast food lunches or order in to their desks--the world of the two-martini lunch is long gone. But twice a week, the company caters a meal for all its employees. And it's a good one: salmon filets, roasted asparagus, rice and potatoes, with cheesecake for dessert. The staff gathers around black tables in the conference room, and for half an hour the office feels like a dining hall. Cliques form in different corners--secretaries over here, a small group of partners towards the back, and two big tables of analysts and associates. The stock talk continues: "Did you see Zamba? Good call, man." A group gathers around Shemmer, who's animatedly describing the movie he saw last weekend.

Hanging out around the table, the analysts look like a bunch of fraternity brothers in dress shirts. Of the dozen recent college graduates who work in the New York office, only two are women. With almost all males, the office has a rambunctious feel--Shemmer slaps his friends on the back and calls them "boys"; another recruit is a "stud." Several of the analysts' cubicles sport posters of scantily clad women, advertisements for a Web site called Bikini.com. "You get a bunch of 22, 23-year old alpha males, you're going to get a certain environment," an analyst tells me. "It's a well-dressed locker room."

The lack of women in the office is especially mysterious since Broadview seems committed to other kinds of diversity--several of the analysts are Indian or East Asian or Middle Eastern (although I don't notice any black analysts). So why the gender imbalance? Analysts speculate that most women are turned off by the aggressive, combative nature of investment banking. "The environment can be a little crass, but it's fun," one analyst tells me. "There's a certain type of woman who can work here, and a certain type who can't." Shemmer echoes that sentiment: "In general I-banking is more male-oriented. There's a lot of testosterone, it's considered the old Wall Street--maybe they shy away from that." Broadview has more women than many banks, but it's still jarring.

The lunch tables disperse quickly--everyone's too busy to hang around--and Shemmer heads back to the same Web research he did this morning. I wander around the office to see what the other analysts do. I spend time with one employee who specializes in writing fairness opinions--reports outlining for shareholders whether they're getting a fair deal in a merger. The number crunching and boilerplate legal writing seem dull, but it's still a high-wire act--shareholders who feel cheated can sue Broadview. "It's a pretty amazing responsibility for someone my age," the analyst says.

His cubicle looks identical to Shemmer's--the same L-shaped desk, same chair, same color scheme, even the same boxes scattered on the floor. On the filing cabinet is the same row of tombstones (the Plexiglas trophies awarded when a deal is successfully completed). The uniformity seems depressing, but this analyst says he likes working at Broadview because it's actually more exciting than most jobs. He left a computer programming position at Merrill Lynch because the projects were too long-term and slow-paced. What's more, he thinks the variable nature of his job at Broadview will make his resume far more attractive to future recruiters.

A sterling resume is as important as a generous salary. Analysts just out of college sign up for two-year contracts, and it's understood that most will move on after the contract is up. After that, there are four main routes: An analyst can stay in investment banking and seek a promotion, go to a venture capital firm, to private industry, or to business school. Industry is the most popular choice, especially with 25-year-old Internet millionaires cropping up everywhere--some analysts even leave early for Silicon Valley. And more and more graduates are skipping finance altogether to found their own Internet companies; some college students try to found start-ups while taking semesters off.

Shemmer's eventual goal is to found his own company as well. But he keeps a laser-like focus on planning. "Am I envious?" he says. "Of course I'm envious--you can't help but be when you see kids making billions." Nevertheless, most Internet startups fail, especially when founders lack business sense. "I've learned so much in this year and a half," Shemmer says. "I'm maximizing, A, my probability of getting to one of those startups, and B, being of value to those startups."

Of course, despite the popularity of the straight-to-startup route, investment banks are still deluged with applications from eager college seniors. Analysts spend several hours a week interviewing and reading resumes, mostly from their own schools. Today Shemmer spends three hours in the late afternoon interviewing candidates--this week it's Yale.

When the interviewers gather with the candidates for a 4 p.m. briefing session, you can tell at a glance who's who. The half-dozen Yalies sit stiffly in black suits and red ties. "No one told you guys it was business casual?" one interviewer says. Shemmer tries gamely to strike up conversation. "So what do you guys do at Yale for fun?" he asks. "Math club? Chess club?" Another analyst rolls her eyes. "It's the same jokes every year," she complains. Shemmer is unbowed: "Seen any good movies lately?" Murmurs. "Quiet crowd here." Just before the presentation starts he manages to pique their interest with a discussion of video games. When everyone quiets down, Broadview's recruiting director enthusiastically describes the company's mounting prestige and "explosive growth mode." "We're very, very excited," he beams.

NINE TO FIVE (AND BEYOND)

The interviews end at 7 p.m., but work won't be over for two more hours. While partners and senior staffers tend to leave the office early to rejoin their families, young analysts burn the midnight oil. The hours are enormously variable, they say. "You're here as late as you want to be--you work until you're done, basically," one associate says. Some night analysts leave early enough to see the sun go down, but at other times they must stay until 2 or 3 a.m. Shemmer says he sleeps about six or seven hours a night--far less than he was used to in college. But the pace is slower when it's so spread out, an employee tells me. "Work is work," he says. "You think about the long hours--but they're long. Things are relaxed. I thought it would be the biggest drag in the world even to work 60 hours a week, but when it's crunch time you don't realize it until the day's over."

For recent Ivy League grads, what could be more natural than pouring their lives into their work? The investment bank rush shows no sign of slowing down--Broadview plans to hire more analysts than ever this year. But is the grind worth the money? All the analysts say their jobs are exciting and worthwhile, though "exciting" might be a stretch. The grueling hours and often repetitive work would discourage all but the most enthusiastic economics concentrator, although for $150,000, a two-year commitment might not be so bad.

As the twilight looms over New Jersey, Shemmer is still hard at work at his desk. It's late, and he won't go home until it's totally dark, but the atmosphere in the office is more casual than during the day. And Shemmer has another reason to be happy. "You see Zamba?" he yells over the walls of his cubicle. "It's at 8!"

BROADVIEW

One Bridge Plaza

Fort Lee, N.J. 07024

Telephone: (201) 346-9000

Web site: www.broadview.com

Broadview is a leading global investment bank focused on the information technology, communications and media industries worldwide. The firm assists clients with mergers and acquisitions, restructurings and private financings. It is also a private equity investor in these industries in the U.S. and Europe. Over the last 25 years, Broadview has grown to become the world's largest mergers and acquisitions investment bank of its kind, operating across the United States, Europe and Asia.