The helpful, team-focused investment bank is a complete fantasy
What makes a good investment banker? Is it, as the clichés would suggest, an aggressive, deal-focused mentality and ruthless streak? Or, perhaps, a high level of numeracy coupled with stamina and patience to work through the night producing financial models in Excel?
Talk to any investment banker or bank recruiter willing to go on record and there’s one, slightly cheesy, trait that always comes up – teamwork. If you’re applying for a graduate position, a spell in the university rowing club, football team or investment society can add as much sparkle to your CV as numerous internships and a mathematical-focused degree from an Ivy League school.
Senior bankers often condemn arrogance as a personality trait because any trace of narcissism (prevalent in financial services by the way) suggests that you can’t be a team player – and this is a big no-no. Goldman Sachs, in particular, espouses a “collegiate” working environment. But what happens when it really hits the fan?
One thing to take from Fabrice Tourre’s unsuccessful case against Goldman Sachs is that when things go wrong, you’re well and truly on your own. Tourre’s defence rested on the fact that his role in creating the $1bn sub-prime mortgage deal, known as Abacus, was one of many in a team.
While Goldman tried to paint him as a calculating, highly-paid and highly-specialist banker who wilfully deceived investors, Tourre claimed that he was one small cog in the vast collaterized debt obligation machine at the bank, and could not possibly have been solely responsible for Abacus.
The jury didn’t buy it; it found that he committed fraud “while acting within the scope of his or her employment”. As Tom Gorman, a former lawyer with the Securities and Exchange Commission’s Enforcement Division told Bloomberg: “Being 28 years old and one of several employees of Goldman Sachs isn’t a defense.”
When wronged, Goldman can be ruthless. According to a new Michael Lewis article in Vanity Fair, it coached witnesses in the case against Sergey Aleynikov, a “softly-spoken” former star programmer who stole computer code from the bank, to the point where they “behaved more like salesmen for the prosecution than citizens of the state.”
The reality is that, at 28, Tourre would have been working under his own steam for a number of years. Even at a junior level, where a team-based approach is encouraged to ensure a harmonious working environment as analysts burn the midnight oil, you’re given a lot of individual responsibility early on. This means if you mess up, you’re going to take the blame.
At the senior level, the ideal of team-work is in the realms of fantasy. As Heather Katsonga-Woodward, an entrepreneur and former IBD analyst at Goldman, told us previously: "Competition is higher at senior levels at Goldman. It's pretty subtle, but you get MDs fighting over who works on a particular deal."