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West Coast Investment Banking Market Update

Posted on December 2020 By James Lee

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In 2020, financial markets saw explosive growth early on, entering the year very bullish. However, as the events of 2020 unfolded, we entered March already haven given back all of last year’s gains. It was clear 2020 would be one for the records. The Investment Banking market has been consistent with market performance taking a hit in the first half of the year, but recovering in the second. Recovery was driven by some large acquisitions, including AMD acquiring Xilinx and Salesforce acquiring Slack, as well as an active capital market with some high-profile IPO’s such as Snowflake, ZoomInfo, DoorDash, and AirBNB.

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However, on the West Coast, the global hub for the Tech industry, the banking world remained relatively resilient. There were fewer layoffs, and those who were let go, quickly found employment at tech-focused boutiques with strong deal flows. These boutique investment banks were not only closing deals through the toughest days of the pandemic, but they were hiring throughout as well. Though it may not seem like it now, everything in 2020 is temporary, including the hiring freeze at bulge bracket firms, most of which are back in full swing hiring.

Unfortunately, the West Coast is not called home for tech-focused banks only. Several firms that cover industries such as Consumer & Retail or Industrials also struggled in Q2. But given the “boutique-y” nature of their platforms they utilized furloughs and salary cuts in lieu of layoffs. The lack of deal flow, however, caused many bankers to consider moving into the already attractive Tech space.

We remain cautiously optimistic for 2021 in the West Coast Investment Banking sector. Historically low interest rates, excessive corporate balance sheets (in tandem with other factors) and large amounts of dry powder at PE funds, name just a few factors driving the potential bounce-back expected in 2021. With strong vaccine data and the masses expected to be largely inoculated by May/June of 2021, there are high hopes that we will return to a new sense of normalcy in 2021 across all industries hit by the pandemic.

To learn how Selby Jennings can support your Investment Banking hiring needs on the West Coast in 2021, or to learn more about the market trends, get in touch with the Selby Jennings team.