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A focused approach SG Cowen is an investment banking firm known for its work with growth companies. Formed in July 1998 through the purchase by French commercial banking giant Societe Generale of I-bank Cowen & Co., the firm combines the global banking franchise of SG (founded in 1864) with the equity underwriting, distribution, research, and advisory capabilities of Cowen and Co. (established in 1918). A leading full-service securities firm, SG Cowen perennially receives top rankings in certain markets, most notably health care and high tech. The firm has the largest health care research team, with 25 analysts covering more than 100 companies. With the purchase by Societe Generale, SG Cowen is focusing almost entirely on investment banking businesses. Previous to its acquisition, Cowen had close to $6 billion under management by its subsidiary, SG Cowen Asset Management, and managed six mutual funds with about $1.8 billion in assets, but decided not to pursue growth in this area. While cutting back its asset management business, the firm is looking to expand in I-banking. In the first half of 1999, SG Cowen hired 20 managing directors from bulge bracket firms to expand its investment banking franchise. And in 1998, the firm acquired Bannon & Co., a Los Angeles-based investment banking and strategic advisory boutique. Ch-ch-ch-changes Since its acquisition by Societe Generale, the firm has extended its banking coverage to cover other industries such as financial services, gaming, lodging and leisure, and utlilities (the firm covers utilities through its SG Barr Devlin subsidiary). Observers speculate the firm hopes to conquer the media and entertainment industry, after poaching all-star analyst Edward Hatch from Warburg Dillon Read in October 1998. Not that the firm is straying from its traditional strengths in health care and tech. In June 1999, the firm bolstered its health care corporate finance practice by recruiting veteran banker Peter Reikes from PaineWebber to head the industry group. Recent tech deals include announced IPOs for mail.com and hotjobs.com, and the IPO of pcOrder.com, completed in February 1999. In the media field, the firm advised Canadian live theater group Livent (the producer of Broadway hits such as Phantom of the Opera and Ragtime) in its sale to SFX Entertainment, announced in June 1999. On the downside, the firm has also lost some big-name research analysts, including Daniel Lemaitre in the medical technology field. When Lemaitre left in April 1999, he took several other med-tech analysts with him, leaving only one covering the industry at SG Cowen at the time. Other prominent analysts who have left since the takeover by Societe Generale include David Stone, formerly the head of biotech research, and Hal Vogel, a top analyst in the entertainment industry. Unit acquired by Lehman In July 2000 rival Lehman Brothers acquired the private client services unit of SG Cowen. The deal included 130 SG Cowen brokers with 60,000 clients and assets worth about $10 billion.
SG Cowen looks for accomplished and motivated individuals with strong academic backgrounds, and analytical, computer, and communication skills. Visit the investment banking section of SG Cowen's web site, at www.sgcowen.com, for job descriptions and contact information. For analyst positions (entry-level investment banking positions), the firm recruits on-campus at select schools in October, November, and January. For associates (MBA-level positions), responsibilities include financial and strategic analyses such as structuring and executing equity and debt financing and identifying, evaluating and implementing mergers and acquisitions in SG Cowen specialty areas. One recent associate hire explains her interview process: "I did a two-on-one for the first round. The second round was a round robin of one-on-ones. I interviewed with four people, each interview was 30 to 45 minutes." That contact reports that SG Cowen lobs finance questions at associate candidates if they do not have a particularly strong banking background. "Because it's small, you need to hit the ground running, because they don't have the resources to train people - they will give you the time, but they would rather not." Because of its focus on industries, analysts and associates at SG Cowen are placed into specific groups at the end of their respective training programs. While a deep knowledge of an industry isn't necessary, "what's important to them is that you have a thirst to learn. In underwriting you have to write documents describing the company, and its products and strategy, so you have to exhibit that interest." While in past the firm has promoted analysts to associates without requiring an MBA, it is selective in such promotions. The firm promoted five third-year analysts to associate in 1998, and five more in 1999.
Friendly culture With a small- to medium-size company atmosphere, insiders note that each department and office at SG Cowen has its own distinct culture. The firm's technology group, for example, has reportedly been more fractious than its healthcare group in the past. However, insiders agree that bankers are in general closer to each other at SG Cowen than at bulge-bracket firms. One source praises relationships with upper management, saying upper management is interested in developing the abilities of their staff, and are "even willing to make themselves available to anyone who needs them." Others "manage to get together outside the office, which is nice." Says one associate in the firm's San Francisco office: "It's a friendly, family-like environment. I think the lines between professional and personal relationships get crossed. People know when someone's been on a date, and people celebrate birthdays a lot." Reports a former analyst in New York: "The MDs take people out once a month to have a big event, whether it's bowling, or out for drinks, or whatever, just to keep morale high. They did a good job bringing people to travel." Because of the firm's size, entry-level bankers are given high levels of responsibility from the start. "In your first year here," say analysts, "you will get to work with CEO clients, something that would not happen in a larger firm." But even though employees are proud that "Cowen is a company with a history of success," they acknowledge that "there are drawbacks. You will also perform the mundane tasks that would not be required of you in a larger company. You will do copying, filing - whatever needs to be done." The SG acquisition Reports one insider about the acquisition of Cowen & Company by Societe Generale: "There were the cosmetic changes - new business cards, new stationary, new logos and everything. Templates for producing pitchbooks changed." That contact continues: "The policies changed a bit, there were more people were added to committees. One of the things that SG did was actually reduce the number of steps that had to be taken before deciding to take on a deal." More important than cosmetic or policy changes, however, is a generally change in name recognition and identity. "From a marketing standpoint, it changes somewhat," explains one insider. "You now have a parent company that's a French bank, and you try to offer more products for clients, you're able to do debt and equity. But some people don't understand what SG means, whereas NationsBank or Bank of America is more recognizable." And more important than prestige and name recognition has been cultural change and turnover, most notably at the firm's NY headquarters. Reports one associate: "Some of the SG people are coming in and taking over more, the head of I-banking is an SG person, where it used to be all Cowen." Another insider reports: "Basically the tech group got decimated, a lot of them didn't stick around to see how it would work out. Also, a lot of the dead wood got fired." Research-oriented SG Cowen has grown rapidly into a full-service bank from a research firm. For one, the firm is moving into industries outside of its traditional focus. "It was health care and technology, now it's everything from retail, media - they're trying to be cross all industries," says one insider, who notes that SG Cowen has been unsuccessful thus far in duplicating the success that it has enjoyed in its original industries. Still, the emphasis on research distinguishes the firm from others where research analysts may be pressured to work in ways that will promote banking work, insiders say. "The research people don't take any shit from the bankers," explains one insider. "Those guys have built enough power, since they were there first. They never felt any pressure from the bankers to do anything more than they wanted to do."
Margaret Garriques Recruiting Financial Sq.1 8th Floor New York NY 10005
Research;Investment banking;Institutional Sales and Trading;Asset Management;Private Client Services;Inter-Dealer Bond Brokerage;Fixed Income Services;Correspondent Services
Robertson Stephens;Deutsche Banc Alex. Brown;Hambrecht & Quist;Banc of America Securities;Volpe Brown Whelan More Company Profiles For more career information, go to Vault.com ©2000, Vault.com Inc
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