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One-stop shopping The investment banking and securities arm of Canada's largest bank, the Canadian Imperial Bank of Commerce (CIBC), CIBC World Markets brings a twist to the idea of the one-stop financial supermarket for companies. As Paul Rogers, the head of the firm's U.S. operations puts it, "we believe that there's a big chunk of companies that aren't served well by bulge-bracket firms." Thus, CIBC looks to be able to offer these mid-sized companies whatever they need: credit, asset securitization, public equity offerings, high-yield offerings, M&A advisory, and so on. In doing so, they look to develop relationships with these growth companies to the extent that, as Rogers says, "We're their bank. We're their financial institution." This strategy has been a long time in developing, as CIBC has gradually acquired investment banking capabilities, first acquiring leading I-bank Wood Gundy in Canada in 1988, and then the New York-based Argosy High Yield Group in 1995. (The Argosy Group was run by veterans of the junk bond king of the Street in the 1980s, Drexel Burnham Lambert.) In 1997, the firm acquired New York-based Oppenheimer & Co. for $525 million. Oppenheimer, which was founded in 1950 and had been shopping itself around for a few years, added equity underwriting capabilities to the mix. Lateral growth Since the Oppenheimer acquisition, the firm has aggressively grown its I-banking business through lateral hiring. For example, the firm hired the former co-head of M&A at Salomon Smith Barney, Conrad Bringsjord in July 1998; Bringsjord has built a dedicated M&A product group that now has more than 20 professionals. From June 1998 to June 1999, the firm added more than 200 I-banking professionals, including several high-level hires who, like Bringsjord, were brought in as group heads. At the same time, the firm has scaled back its efforts in non-core businesses. In September 1998, for example, the firm closed down its mortgage-backed securities and emerging markets trading desks, stating an intention to abandon those risky businesses. The one-stop shop is humming along nicely thus far. For example, in a span from December 1998 to July 1999, the firm took Internet company AboveNet public with a $75 million offering (December 1998), managed a $400 million follow-on equity offering for the company (April 1999), advised AboveNet on the acqusition of an Internet service provider (June 1999), and then advised the company in its sale to MetroMedia Fiber Networks for $1.75 billion (July 1999). Let's simplify Until recently, the I-banking operations of CIBC had gone by a confusing mix of names. For example, in Canada, CIBC's I-banking operations went by the name of CIBC Wood Gundy; in America, the firm operated under CIBC Oppenheimer; in Australia, the firm was CIBC Eyers Reed. In May 1999, the firm put an end to this confusion by integrating the I-banking practices under a single brand name: CIBC World Markets. The firm's private client businesses will continue to go by multiple names: in Canada, the business will be known as Wood Gundy Private Client Investments; in the U.S. the private client business will go by CIBC Oppenheimer. The reason for the previous confusing name game was that the bank had largely kept the names of firms it had acquired. Things might have gotten more complicated had the Canadian government permitted it. In 1998, CIBC announced a $14.3 billion merger with Toronto-Dominion (TD), which would have created North America's ninth-largest bank. However, in December 1998, the Canadian government blocked the proposed deal. I-banking future CIBC World Markets is poised to aggressively pursue investment banking markets both in the U.S. and elsewhere outside of Canada. In April 1999, CIBC elected John Hunkin, who was formerly president of CIBC World Markets, to serve as CEO and chairman of the entire bank. Hunkin, a longtime investment banker, was voted in over Holger Kluge, who had headed up CIBC's retail arm. Hunkin intends to reintegrate the firm's I-banking and retail divisions. In Canada, the firm ranks No. 1 in underwriting IPOs, corporate debt, public debt, and advising on M&A transactions. Recent M&A deals have included advising Newcourt Credit in its pending $4.2 billion acquisition of CIT Group, AT&T in its C$5.8 billion takeover of Metronet, and JDS Fitel in its C$5 billion merger with Uniphase. A fortuitous $750 million financing of now-telecom giant Global Crossing in the early 1990s has become a boon for the company; funds associated with the bank now own more than $5.5 billion of the company. In the U.S., CIBC World Markets ranks among the top 20 in all major investment banking product areas, such as high-yield, equity, and M&A. The firm usually ranks No. 1 or No. 2 in asset securitization in the U.S.
As CIBC World Markets increases its investment banking presence in the U.S., it is increasing its profile on campus. "I've seen the transition that we have made in recruiting from an interviewing side," reports one associate who came from Oppenheimer and has taken part in some talent-finding missions. Put simply, says that insider, "At Oppenheimer, we didn't have MBA recruiting. With CIBC it became a larger effort. A lot of changes were made to create an image of a firm that didn't exist before. A lot of steps were taken from a promotional standpoint with really competitive salaries and on-campus promotions." In investment banking, the firm had 10 associates, and 32 analysts in the U.S. in its 1999 class. About a third of the associates came to the firm through the summer associate program. Those interested in financial services but unsure in what specialty should be happy to know that they can interview for as many of the firm's departments as they like (merchant banking, equity research, etc). "People come back with more than one offer [from the firm]," reports one contact. Those going through on-campus interviews participate in the "super day" affairs common on Wall Street. "They have a dinner and a cocktail with all analysts and some associates the evening before," reports one recent analyst hire. "On the interview day, it's a half-day, with five or six interviews. The interviews are 30 minutes, one-on-one with senior-level people." As for the questions, says that contact, "some people go straight for finance and technical, and some people go for 'Do you have any sort of life?" Insiders agree that because the firm doesn't have the same cachet as those in the bulge bracket, interviewers are impressed by candidates who can express a specific interest in the firm. "I think they're looking for people who have a strong interest in the firm," says one insider. "[CIBC is] a relative unknown, so they're looking for someone who, if they can extend an offer, is going to take it. It matters how strong your interest is."
Work hard, but not as a slave "I'm working just as many hours, if not more hours as my peers at other banks," reports one CIBC World Markets insider. Contacts at the firm agree that CIBC World Markets employees definitely work normal I-banking hours. However, they express less burnout than their peers at other firms. "The firm is very generous about benefits," reports one contact. "There's good sick time, vacation - basically good HR policies." Says another, "The A-No. 1 reason I chose this place was the emphasis on lifestyle. Don't get me wrong, there have been times when I've killed myself, and I'm busting my ass for six months." However, that insider emphasizes that the firm pays attention to its employee happiness. "It's all about keeping the best people in the firm, so they are really good about making sure you're happy. If that means switching to another group or another location, or whatever, that's fine." Another insider agrees, saying: "I think typically people come here and stay for a long time. They try to nurture people, and keep the good people here." The firm wins praise not just for management's emphasis on lifestyle and retention, but for an overall more laid-back and down-to-earth attitude. Says one insider who has worked at bulge-bracket Wall Street firms: "[At other firms], the attitude is win-win-win, get your deals, where the attitude here is a lot more team-oriented, more 'win on our principles.'" "It's a friendlier place," says one contact. That insider continues: "[CIBC World Markets is] a pretty hardworking place, but they're not up there managing their league table status, whereas at larger banks, I know they're managing their status. They don't pursue the large Fortune 500 companies. They stick with, not the middle market, but middle-sized larger companies." Insiders say this mid-sized role leads to a less snobby atmosphere than other Wall Street firms. "You're not judged by a piece of paper, and your school means nothing - it's what you do at work," says one insider. "You get people from all types of schools, from Harvard to wherever." Another agrees, saying "because we don't chase after the highest profile clients, we don't have to have this highfalutin attitude that we're better than everyone else." This slightly more laid-back atmosphere is played out in the firm's dress code. "At Oppenheimer, we didn't even have casual Friday in the summer," reports one insider. "And then CIBC came and it was casual Fridays all year-round." In June 1999, the firm also decided to go business casual for the entire summer. However, insiders say, "certain MDs still require their juniors to dress up all the time." Insiders also report a healthy amount of camaraderie at CIBC World Markets. Reports one associate who joined the firm from a large Wall Street firm, "I don't think I was ever invited over to a senior guy's house there. Here, the head guy of M&A has an outing every year, and some of the other guys have had us over. It's a better working environment." The merger and growth Insiders seem happy with the growth at CIBC World Markets and the acquisition of Oppenheimer. "It was a lot more dynamic, I thought it was a better place than before," says one insider from the CIBC side. "Oppenheimer people were definitely excited about it. What was constraining to them was the capital. They didn't have the capital to grow, and CIBC has a ton of capital, which helped underwriting capability." One of those "Oppenheimer people" agrees. "It's clearly enhanced the platform," says that contact. "You can feel much more confident going out and pitching other products. So now, instead of getting good experience in a smaller bank that's capital-constrained, I'm getting good experience in a smaller bank that's not capital constrained. This means I'm working on lots of other types of deals - I'm doing a lot of M&A, and I did an LBO, which I wouldn't have done at the old Oppenheimer." Contacts are also pleased at how the integration has proceeded culturally. "People-wise I think it was OK," reports one associate insider who was originally hired by Oppenheimer. "It's not like a commercial bank without any introduction to investment banking acquired us. They had already done that when they had acquired Argosy Group. So in the U.S., their presence was largely from an I-banking perspective anyway. Their culture was not a 9-to-5 bank culture." Says an analyst, with friends whose mid-sized firms have also undergone recent acquisitions, "My friends complain that it's a pain to work for the commercial banks, and that 'They handcuff us.' I'm grateful that that hasn't been the case here." Of course growth through acquisition is bound to create some discomforts. "There was the added bureaucracy, in the form of weekly meetings, because the groups were now larger, and there was bureaucracy in terms of getting certain things approved internally," reports one insider. "It adds another layer in that things that were dealt with simply with a phone call are now a memo, but I guess that's to be expected." All in all, however, the combination has proved fruitful, insiders say. "There has been more work, more marketing, and things are busier, as we have more products to offer. I think the bar was raised as far as expectations for group heads to generate revenue. At the same time, there is more opportunity to close transactions as we have deeper resources." Still separate, sort of Although CIBC and Oppenheimer have merged, operations in New York are still "split between [CIBC's] 425 Lexington, and the Oppenheimer space in the World Financial Tower." "All the infrastructure from the technology standpoint is pretty good, as far as shared files and e-mail," reports one insider about maintaining two main offices. Says another contact, "There has been talk of slamming the two groups together, so that investment banking will be all together, but they haven't figured out how yet." Another source points out that "CIBC got their headquarters at the top of the market, so if they sublet right now, they take a huge negative cashflow." Bankers haven't much had to move offices between the two locations, either. "Oppenheimer and CIBC had pretty distinct groups. Oppenheimer mostly covered equity and M&A, while CIBC was mostly debt-oriented, so there wasn't a lot of overlap," explains one insider. "Where there was overlap was in client executives, or origination. The ones that remained were mostly Oppenheimer." One associate who works Downtown in the old Oppenheimer headquarters reports traveling to Midtown about once a month. "The senior guys are there a lot more," reports that contact. "There's a car chain between 425 Lex to 200 Liberty [the World Financial Tower]. All the car service guys know." Those who have a choice between the two locations should know that the "Midtown location has the nicest cubicles." Early opportunity Like their peers at other mid-sized firms, CIBC World Markets insiders enjoy early responsibility and client contact, as they work on thinner deal teams and with growth companies. Reports one analyst about his first assignment: "I was at the pitch, and I was there all the way to the IPO. I got to know the CEO of the company, and developed even more than an investment banking relationship, a personal relationship. I went to Hawaii with the CEO's kids, and [the CEO] e-mails me." Another insider tells a similar story. "I have friends that are analysts at other banks, and they don't do the same type of work that we do here. Because we are smaller, you are afforded more responsibility, and I think associates would feel the same. I have some friends at [a bulge bracket firm], and they don't have buyer contacts. If we're on the sell-side, we are calling [potential buyers], answering questions." Associates agree with this assessment. One contact, who came to the firm from one of the bulge bracket firms says his previous employer "had way too many people on a deal team, and you didn't get to learn as much. You didn't get to take as much of an active role as at CIBC. Here you actually get to run transactions sometimes." Some extra benefits After being acquired by CIBC, Oppenheimer veterans say, "now you've got great HR, and great benefits, and it's very organized." Explains one contact, "Say I decide, 'Oh I need my direct deposit changed to another account.' If I had to do that at Oppenheimer it would have taken six weeks just to figure out who was the right person to contact. Now it's really simple. We didn't have this kind of infrastructure." Other support has improved as well. For example, one insider who, while working with Oppenheimer, put together pitchbooks himself, reports that the firm hired production staff for its Midtown and Downtown locations in the beginning of 1999. And the firm is planning to add a potentially lucrative benefit by the end of 1999: Certain professionals will be able to take part in a leveraged investment fund that invests employee money (leveraged with matching company funds) into the firm's merchant banking deals.
Carol Trezza Human Resources CIBC World Markets Tower1 200 Liberty Street New York NY 10281
Asset securitization;Equity underwriting;High yield underwriting;M&A advisory;Equity research;Merchant banking
Banc of America Securities;Deutsche Banc Alex. Brown;Robertson Stephens;SG Cowen;Warburg Dillon Read More Company Profiles For more career information, go to Vault.com ©2000, Vault.com Inc
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