Hi, Aaron Weinman here. Allow me to introduce you to the "sponsor banker," Wall Street's quintessential relationship manager. These savvy folks sit in the trenches with private-equity firms, one of banks' most generous (and demanding) fee-paying clients.
Before we get into that, however, a kind reminder that nominations are open for Insider's next class of Wall Street rising stars. Here's how you can spotlight the standouts in investment banking, sales and trading, and investing.
Without further ado, here are 10 bankers who can be the first call for top execs at investment firms like Thoma Bravo and Apollo.
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1. Sponsor bankers could rake in hundreds of millions of dollars in fees this year as company valuations slide and private-equity sizes up opportunistic acquisitions. But who is a sponsor banker, and what do they do, you ask?
They're Wall Street rainmakers who work exclusively with private-equity firms (sponsors). These bankers are in the trenches with these firms when their sponsor clients are bidding on assets. And they're often the banker criss-crossing between different asset classes — like leveraged-finance departments — depending on what their client wants.
Does KKR want to spin off a portfolio company through an IPO? Call the sponsor banker. Thoma Bravo wants to take the hottest public tech company private? Hit up the sponsor banker. Or does a private-equity client want to raise debt for an existing portfolio company? Ping the sponsor banker. They'll hook you up with almost any part of an investment bank or capital-markets department.
It's a fruitful, yet sometimes thankless job given the demanding nature of private equity. These cashed-up investment firms, after all, are one of Wall Street banks' best sources of income.
"Private-equity clients aren't the easiest. They can be difficult when it comes to negotiating deal terms. But because they're such big fee payers, they know banks will agree to work with them," one senior banker told Insider.
At the end of the day, it's all about the Benjamins. And private-equity firms have an estimated $2.5 trillion in cash that they need to deploy. And once stock markets settle, these firms are expected to put their money to work on a bevy of acquisitions.
Here's 10 sponsor bankers who have forged long-lasting relationships with some of the biggest private investors.
In other news:
2. Klarna's cofounders are no longer billionaires after a devastating down round. Here's how the downfall of the BNPL phenomena has slashed the net worths of three other fintech founders.
3. Financial advisors are rethinking the tools they want to keep in their tech stack. As the market navigates a downturn, here's the fintechs they're most likely to cut loose.
4. Wall Street firms like JPMorgan are getting some help as they wade into the digital-assets space. TRM Labs, a crypto compliance provider, is fielding increased interest in its back-end tools that help firms tackle risk management.
5. Celsius files for Chapter 11 bankruptcy. Celsius said the decision would provide an opportunity to stabilize its business. Former staff told the Financial Times about how the company's pursuit of high returns left it victim to market turbulence. Here's how Celsius, one of crypto's biggest lenders, ground to a halt.
6. Twitter said it had "very real concerns" about Musk's data requests. Some feared he'd use the massive information dump to build a competing app.
7. Musk's decision to back out of his Twitter buy could help banks avoid steep losses, according to Bloomberg. Losses could top $150 million on one part of the debt financing as weak credit markets have made it harder to sell riskier deals in the capital markets.
8. Uprise, a personal-finance app, just raised $1.4 million in pre-seed funding. Here's the 14-page pitch deck that helped the company get support from the cofounders of SoFi and Gusto.
9. Everyone, including Wall Streeters, are talking about their relocation to Florida. But the high prices and hot weather are pushing some residents out of the Sunshine State.
10. Generation Z actually hates working from home. You'd think most of the younger brigade would love working from anywhere in the country, but some miss the camaraderie and the water-cooler banter.
Done deals:
- TA Associates-backed software company Compusoft + 2020 has acquired business-management software provider Resource and Financial Management Systems.
- Private investment firm Sun Capital Partners has bought Andersen Commercial Plumbing.
Curated by Aaron Weinman in New York. Tips? Email [email protected] or tweet @aaronw11. Edited by Hallam Bullock (tweet @hallam_bullock) in London.