Why Some Investment Bankers Stay on Wall Street
By: HEIDI N. MOORE
Reuters
February 10, 2009

There is Wall Street, and then there is Wall Street.

NEW YORK, Feb 10 (Wall Street Journal) - As hard as it may be to believe in this era of cacophonous bailouts and Treasury Secretary grillings, some bankers still want to work on Wall Street, advising chief executives on mergers and acquisitions and the hard work of restructuring companies. But, to hear some bankers tell it, it has to be the Wall Street of their choosing, Wall Street as it used to be: the small, old partnerships that lack big management teams or depend on the capital markets.

In the past week, senior investment bankers with 20 years or more of experience at three big firms — UBS, Morgan Stanley and J.P. Morgan — have started new lives at smaller rivals. And they draw sharp distinctions between the Wall Street they know — that of personal relationships and client service — and the one that has been surrounded by populist outrage.

“We weren’t ever part of that particular cabal that has besmirched the name of investment banking,” said Marshall Sonenshine, a former Wolfensohn & Co. and Deutsche Bank Securities banker, who founded his own advisory firm. Mr. Sonenshine recently hired David Haase, a restructuring specialist from Wachovia Securities, and Grant Tolson, a former J.P. Morgan banker who specialized in advising financial institutions. “I actually like my profession. And I’m proud of it.”

The Wall Street of big bonuses or $35,000 commodes doesn’t apply to everyone, bankers protest. Robert Gillespie, a vice chairman of UBS Investment Bank, joined Evercore Partners last week as a senior managing director in London. Gillespie ran parts of UBS’s investment bank for nine years until he became a vice-chairman in 2005. Gillespie predicts that many more bankers will follow in his footsteps and rediscover the old partnerships. “The idea of offering objective independent advce, which is what Evercore is doing, has been around for a couple of hundred years, and what’s going on doesn’t change that.”

Wall Street, Gillespie told us, “is a sadder and smaller place. It’s going to be under a lot more media scrutiny and political scrutiny on both sides of the Atlantic….For most of the big firms, I would imagine one of their number one strategic priorities is to get out of the newspapers.”

Gillespie, a U.K. native, started his life as an investment banker in 1981 at S.G. Warburg, which was acquired by UBS. Although Gillespie advised on some high-profile assignments — including the landmark Vodafone-Mannesman deal — he often protested to big-bank methods. In 2004 and 2005, Gillespie held a strong line against so-called “stapled financing,” a favorite tool of big banks that allowed them to offer financing to a company’s buyer even if the bank itself was providing merger advice to the seller.

Media and communications investment banker Richard Brail was with Morgan Stanley for nearly 20 years until he joined advisory firm Peter J. Solomon on Monday. His expertise is in satellite companies, including PanAmSat and Sirius XM, which he advised on its merger last year. As a former philosophy and finance major — he notes his “dichotomy of finance and introspection” — Brail senses injustice in the way all of Wall Street has been demonized by everyone from Congress to the President. “Most people on Wall Street are serving their clients. It’s unfortunate that everyone gets painted with the same brush,” Brail told Deal Journal.

To be sure, going small is not the only way to keep working on Wall Street. Bankers at big firms maintain that the world is getting more complex — particularly as companies restructure to avoid bankruptcy — and that corporate chief executives will look for more services, including lending and trading, from their bankers.

Oppenheimer & Co. analyst Meredith Whitney famously said that “no one goes into Wall Street to save the world,” but Mr. Gillespie, 53, advocates a kind of purge of those who are in banking purely for the paycheck. “At my age, when you’ve been in an industry for so long, you don’t do it unless it’s going to be fun. If all you want to do is get very rich very quickly, nowadays you should probably do something else.”