As we all know, 2023 has been tough for IPOs and M&A, although there seems to have been a small uptick in the latter. It’s been a hard time to run an investment bank and to be an investment banker. Though we have seen some activity in areas such as debt advisory, it is generally quiet. So what can Investment Bankers do to add value in a quiet markets? Certainly, the hiring frenzy of 2021 has disappeared. Banks are no longer fighting PE for top talent, as the private equity market has also slowed. It can be a challenging time as a leader.

Firstly, bankers can use quieter periods to strengthen client relationships. They can reach out and reevaluate client needs and provide broader advisory services, even if not related to IPOs. It’s a great time to conduct market analysis to identify emerging trends, which may be valuable to clients when markets improve. As mentioned, debt advisory maybe a service to focus on, or private placements.  Of course, you can’t network enough, and those in infrastructure roles should be reviewing costs across the business and using the time to complete projects, which may have slipped during busier times. Essentially, the business needs to be in great shape for the inevitable upturn. It may also be a good time to explore new business lines such as wealth or asset management. Whilst diversification takes time, the challenging conditions of sideways markets and margin compression in these industries will present banks with opportunities to recruit top people able to set up a new business, and for disaffected relationship managers to bring clients over time. It’s also a time to step back and also review the talent in your business.

It can be challenging leading teams through downturns. People who choose a career in investment banking are often driven and conscientious. They like to be busy and to be challenged. Many can feel insecure about their position when deals are in short supply. It’s really for senior leaders to step up and to communicate the long-term vision of the business, and to invest in the emerging talent in the business. Setting up mentor groups, increasing training, or giving exposure to new business lines can be a great way to keep colleagues engaged and motivated. Having a development plan for your talent in a downturn increased loyalty when markets recover and you will start the new cycle with a more motivated workforce.

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