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Meet the Happiest Investment Bank on the Street – No It’s Not Goldman Sachs

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In investment banking, names matter. Large bulge-bracket banks work on the biggest deals, create all headlines and have the most gravitas. But that doesn’t mean they employ the happiest, most satisfied employees. No, those folks appear to work at 1,000-person firm Houlihan Lokey.

This year’s Vault Banking 50, which identifies the best investment banks in which to work based on employee surveys, leads off with three familiar names: Blackstone Group, Goldman Sachs and J.P. Morgan. The most dominant factor in the rankings is prestige, or how others in the industry view the firm in question. It’s essentially a jealousy rating, and it accounts for 40% of the overall rankings. Houlihan Lokey didn’t crack the top 20 when it comes to prestige.

Quality of life is a different story. The 41-year-old middle-market advisor ranked first in an unprecedented 18 of 24 workplace categories, including employee satisfaction, firm culture, work/life balance and benefits.

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“Houlihan Lokey has notoriously been a caring firm,” Derek Loosvelt, Vault’s senior finance editor, told eFinancialCareers. “As opposed to some large investment banks, which operate [more generic] programs for childcare, Houlihan Lokey offers a more personal approach.”

A company insider said Houlihan Lokey goes “out of its way” to mentor, train and retain talent. The New York-based firm is known for promoting from within to build its executive ranks, rather than poaching from more high-profile investment banks. “Senior members of the deal team have great respect for junior members’ lives outside of work and understand that a happy employee is a productive employee,” said another insider. The firm also took the top spot in categories such as supervisor relationships, work hours and diversity.

While not well-known to all of Wall Street, Houlihan Lokey is a powerhouse in its own realm: the mid-market. In 2012, the firm ranked first in announced U.S. M&A deal volume for deals under $3 billion, according to Vault.com. It’s held the top ranking for U.S. M&A deal volume for deals under $1 billion for seven years running, specializing mainly in restructuring and bankruptcy proceedings.

Houlihan Lokey shows 34 openings for experienced hires on its website, including roles in New York, Los Angeles, London and Hong Kong.

Scandals Matter

Overall, the three highest-ranked firms in 2012 – J.P. Morgan, Goldman Sachs and Blackstone – remained the same this year, although the order has changed. Blackstone unseated J.P. Morgan to take the top overall spot while Goldman Sachs moved from third to second. Houlihan Lokey finished fourth, based mainly on the quality of life it provides employees.

2014 Rank 2013 Rank Change Company
1 2 The Blackstone Group
2 3 Goldman Sachs
3 1 J.P. Morgan
4 4 Houlihan Lokey
5 7 Evercore Partners
6 5 Morgan Stanley
7 9 Centerview Partners
8 6 Greenhill and Co.
9 8 Perella Weinburg Partners
10 10 Credit Suisse

For J.P. Morgan, the drop from first to third had a lot to do with one event: the “London Whale” trading fiasco that tarnished the bank’s reputation as the best risk manager on the Street. The scandal affected both the manner in which outsiders view the bank – prestige – and the way current employees view their own firm, according to Loosvelt.

Still, most Wall Streeters believe J.P. Morgan’s recent issues are more hiccups than permanent cultural problems. It’s the “only real competitor for Goldman,” said one company insider, adding that oft-maligned Chief Executive Jamie Dimon “is still the best CEO” on Wall Street.

Blackstone edged out Goldman due to higher rankings in a number of workplace categories: hours, work-life balance, supervisor relationships, firm culture and satisfaction, among others. However, Goldman was ranked the most prestigious firm to work for by a considerable margin in both the U.S. and in Europe. Goldman is “still a golden standard in i-banking” said one insider.

Other movers in this year’s survey include Centerview Partners, which jumped from ninth to seventh, as well William Blair (three places to No. 12); Baird (four places to No. 13); and RBC Capital Markets (three places to No. 15). Banks that moved down the rankings include Morgan Stanley, Greenhill, Perella Weinberg and Lazard.

Click here for the complete rankings.

Comments (7)

Comments
  1. I’m an ex-Houlihan banker and I can say with great conviction that this is all nonsense. There is one person at Houlihan who decides who fills out the Vault surveys and who doesn’t. She chooses very carefully who to pick to fill out the survey. She chooses only happy people who were at the top of their class and were well paid and who she can trust to fill out the surveys in a positive light. Disgruntled bankers (of which there are plenty at Houlihan) are never asked to fill out the surveys.

    I believe Houlihan also pays to advertise with these Vault people, so it’s not exactly an unbiased source.

    I fully anticipate that this comment will be deleted by the powers that be. Just need to speak the truth. Houlihan is not utopia. Particularly for those unfortunate souls who work in any group other than restructuring. FAS at Houlihan is a glorified accounting practice. Restructuring bankers there at least get paid. Mentored, not exactly. Have their personal lives respected? Not in the least. Diversity? Really really bad.

    Don’t believe this stuff.

  2. I’m also an ex-Houlihan banker, and I can say with great conviction that that girl’s previous comment is garbage. I knew her and she was lousy. No work ethic, no friends, and no intelligence. She could work in a candy and puppy factory and make it sound like the holocaust. Don’t be jealous that we all made more money than you, Surbhi. BELIEVE THE HYPE!!!! H-L-4-LYFE!!!!

  3. The two comments above just reinforce the bad reputation of investment banking and the people working there. I think it makes no difference if it is a big bank or a small boutique. HLMPLS, your reaction to ex-houlihan comments and the language you use, only speaks worst of your firm and the people who actually succed there. Sad world that values so much ruthlessness, mindless risk taking an the love of money above all. These are still the “wild wild west” days of banking. …i-banking (and bankers) are the cancer of today’s society. I wonder which government will finally rein on this non sense

  4. That’s hilarious that you called out some chick you used to work with.

    I’m actually a man and I did not work in the Mpls office.

    Houlihan is very good at managing their reputation via things like Vault and silly online ranking things. I remember the person who manages these things sending out emails to the whole company telling everyone to vote for our firm in these silly “This is the street” (or whatever that uk-based site was) popularity face-offs between banks. They’re aware of the value of increasing their presitge and perception however they can. (I would bet that Ms. B is reading this.)

    The fact of the matter is that Houlihan started as a glorified accounting firm. They found a real niche with their restructuring practice and created a franchise that is hugely profitable. But the white shoe wall street world doesn’t view restructuring shops (particularly creditor side shops, which is the business that Houlihan essentially created) as all that respectable. So Houlihan decided to build out a big M&A practice, but they were too cheap to hire some real heavy hitters so they basically created a big bucket shop that does tons and tons of small, private deals. Those league tables saying they’re #1 in sub $3bn deals are totally misleading. The average HL M&A deal is about $100mm. They almost never get any publicly traded companies. They just do lots and lots of small deals. They are a bucket shop.

    The idea was to create an M&A practice that would complement the restructuring practice, a la Blackstone. But they did it wrong. The restructuring bankers look down on the M&A bankers and when a restructuring deal turns into an M&A situation they don’t bother to call in the M&A guys, they just do it themselves. The restructuring bankers are paid WAY more than the M&A guys. And the M&A guys resent it. And FAS is paid but a fraction of what the restructuring guys get paid.

    Houlihan is really 3 firms. Restructuring makes big $, but isn’t utopia. The rest is underpaid and miserable.

  5. Agree with ex-houlihan comments. During the financial crisis they laid off lots of bankers, just like every other bank, no special loyalty to employees.

    Anyone who got an offer from Houlihan and a bulge-bracket bank would be a fool to go to Houlihan. Over the past 10 years their growth has been very low compared to other mid-market firms. They have a couple of niches, fairness opinions and restructuring, and yes they do middle-market M&A but their share of the market is shrinking from what I hear.

  6. They did indeed lay off lots of M&A bankers during the recession.

    What was really nasty was that a lot of M&A bankers got laid off on bonus day instead of receiving a bonus. Do you think that makes for happy employees? Happiest bank on the street indeed.

    Imagine working your tail off all year for some schmuck who decides to fire you rather than pay you just so he can save a little more money for his own bonus.

    Back when I went through the recruiting process (pre-recession) they used to tout their “balanced business model” and how in good times M&A does well and in bad times Restructuring does well, and how in the last recession they didn’t lay off any bankers (in sharp contrast to the rest of the street). Well, they don’t say that stuff anymore. They screwed a lot of people.

  7. Bottom line is… Banking industry is modern day slavery…

    SHAME ON YOU… Sr. BANKERS and HR people and even the Associates / Analyst for not raising your voice…

    If everyone behaved like you all… Slavery will still be there in USA

    The least you can do is to create a portal just to shame these companies and Sr. Bankers by name for this mordern day slavery

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