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.

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