The hot technology deal market is driving demand for sector-focused investment bankers. Raymond James is taking a long-term approach to hiring practices, regardless of market cycle. “We’ve been around long enough to see hot markets followed by downturns, so we’re trying to be careful not to over hire or just hire bodies to execute on deals in hand,” says Brendan Ryan, co-head of technology and services at Raymond James, in this Q&A with Mergers & Acquisitions. Jim Bunn, president of Raymond James global equities and investment banking, also spoke to us about the firm’s diversity, equity and inclusion hiring initiatives.
What’s driving the uptick in tech deals?
There are several factors contributing to the uptick in technology deals. First, both strategics and PE firms are flush with cash which had been building pre- and during Covid, so when Covid slowed/halted deal activity, there was pent-up demand that we started to see come back in Q4 of 2020 and has continued into 2021. Early in the pandemic, the uncertainty of the market forced many to hold off making major decisions. In tech specifically, so many companies caught tailwinds from Covid and have flourished as the flip to virtual quickly advanced many years of digital/e-commerce/software adoption in a compressed amount of time, fueling a big acceleration in growth which has piqued the interest of buyers across the board. We’re seeing PE firms that have only dabbled in tech launch tech-specific funds and aggressively pursue these companies for their portfolios. We’re also hearing about companies exploring a sale given the recent activity in the SPAC market driving lofty valuations as well as others trying to front run any upcoming change in tax policy.
How is the uptick in tech deals affecting investment banks and your hiring practices in 2021?
We aim to keep a long-term perspective on the market when building out our recruiting strategy. To be honest, it has been really hard with all the deal activity and our strategy is challenged every day, as we try to balance reacting to an awesome amount of high-quality companies approaching us to pitch our services with what we can take on realistically as a cohesive team and still deliver the best outcomes possible for our clients. Our goal is always to be the leading investment banking platform in the Middle Market Technology & Services space. We hire people that are passionate about getting results for our clients and who want to be a part of our growth momentum and help us reach our long-term goals. We’ve been around long enough to see hot markets followed by downturns, so we’re trying to be careful not to over hire or just hire bodies to execute on deals in hand. It’s no fun to have to cut solid people from a team because of an economic dip, so we’re careful to bring people on board that we see will fit with our strategic goals.
That said, we’ve made several strategic hires this year that have helped us ensure we can maintain the right level of client service and also focus on winning new business opportunities, but we were already on a growth trajectory so we had planned for those hires pre-pandemic. We’ve also seen some of what has occurred across all industries during Covid and have experienced some unexpected attrition as folks leave banking for other pursuits or relocate to different cities where we are not focused on building a presence, so of course we’ve been replacing those bankers and are fortunate to have been able to hire some awesome talent.
What skills and backgrounds are you looking for in tech bankers?
We offer a platform that is client-focused, results-oriented, collaborative and supportive of individuals’ development. While sell-side M&A experience and industry expertise are useful evaluation metrics for us when considering a senior banker addition, we also look for people who are driven to succeed, entrepreneurial, collaborative and maintain our same client-first mentality.
A large foundation to our group’s success has been mentorship – we are proud that a good number of our senior bankers have been with us for quite some time – so we also seek individuals who are committed to mentoring the next generation of investment bankers.
For our junior bankers, it’s all about the attitude, energy and professionalism they bring to the job each day. Of course, it will serve them well to have an interest in capital markets and the technology industry, but the most successful bankers on our team have a tremendous work ethic and maintain a positive outlook each day, even when those days seem to blend into each other. We are so proud of our team and how they have performed during such a challenging environment, and the ones who pick their head up to remember RJTS’ long-term goal and reach out to their colleagues to “show up” whether virtually or in person for their team, are really just lifting us all up one day at a time. We want to hire more people who will add to our culture in that way.
Walk us through your hiring/recruiting process.
We’ll always take a look at inbound interest in our roles across all levels, but we also try to do regular outreach to identify and attract talent to our team. On the tech and services team, we have dedicated team members with banking experience that support RJ Corporate recruiting to ensure an efficient hiring process. They are both tremendously valuable in ensuring our candidates talk to the right people at the right time and make decisions to that keep the hiring process moving in a timely manner.
How do you attract tech bankers to Raymond James?
We are fortunate that the continued growth and success of our platform has driven a lot of great talent to explore opportunities at RJTS. We push ourselves to be on the leading edge of how we do business, have an open-door policy and want to hear regularly from bankers of all levels on how we’re doing. That hunger for innovation and collaboration often attracts people who are looking for a platform where they can actively contribute to the success of our team fairly immediately – they’re usually working on a live deal pretty much on day one! – so we offer some great deal experience.
We also encourage our junior bankers to step up, take ownership and really be closely involved with our clients and promote a culture that is incredibly supportive of our bankers during their time at RJ. For our junior bankers who are looking to gain great skills and experience that they may want to transfer to other opportunities outside of M&A, we offer terrific exit opportunities, mentorship and introductions and have helped place analysts and associates in some great roles after their time with us. Of course, we’d love for many of them to stay on and grow into senior bankers, but we recognize that this lifestyle is not for everyone so try to be supportive however we can. Regarding that banker lifestyle, we’re also committed to finding solutions that promote a greater work life balance compared to what the industry typically offers and, for example, have truly protected weekends – which are not every weekend – and vacation weeks, which offer a real chance to unplug.
Bunn on the firm’s DEI hiring initiatives:
What efforts does Raymond James make to hire diverse candidates for tech banker openings?
We firmly believe in building a diverse workforce and creating an inclusive work environment. Our global equities and investment Banking (GEIB) group has a diversity and inclusion committee that is actively working towards making this happen, and we’re proud to have a technology and services banker, who has a hand in the recruiting of tech bankers at all levels, as the co-chair of the council. This summer and fall, we intend to roll out training on unconscious bias to our full tech and services team. Many of our GEIB hiring managers have already taken the training, which is an important part in having an inclusive hiring process. In addition to our traditional recruitment efforts, we have created our own talent pipelines for emerging and second-career professionals, and avenues for support staff members to grow into new roles within the firm such as our global equities and investment banking internship initiatives. We also have partnerships with outstanding organizations that foster diversity and are working on some exciting initiatives to support diverse employees once they join our team.