Jim Armitage: The generation of bankers who have never done a deal

It’s been a listless summer for bankers, advisers and lawyers reliant on fees from mega British takeovers.

As this week’s earnings from Wall Street banks will show, big UK mergers and acquisitions have been thin on the ground bar the odd £11 billion elephant such as Standard Life-Aberdeen.

That’s bad for the City, but worse for the 20-somethings starting out at one of the Wall Street giants.

With so little action in the multi-billion-pound market these guys specialise in, some say the young generation of bankers are finding it ever harder to get experience of actually completing a transaction.

One M&A veteran says he recently interviewed a competent woman who’d been at a megabank for three years but had never actually completed a deal. Hardly the biggest come-on for would-be employers.

Such starvation rations are not the case at the smaller boutique advisory firms, where deals may be less valuable, but come along far more often, meaning young bankers get decent experience.

Fenchurch Advisory is a case in point. It has done three deals in the past fortnight, including the £467 million takeover of Lloyd’s insurer Novae. It is ranked number one by Mergermarket for the volume of financial services deals completed since January last year. Its score of 16 deals is followed by another boutique, Evercore, with 15.

They’re relatively small shops, so everyone gets their hands dirty, and progress rapidly up the career ladder if they’re any good.

Ambitious young interns spending their summers in London’s Wall Street behemoths might bear that in mind.

Takeover activity may be quiet, but at least activist investors are making work for City advisers. Nelson Peltz is the latest, shaking the tree at Procter & Gamble.

In his personal life, Peltz, formerly known for throwing topless tennis parties, is one of a kind. But his demands on P&G are wearyingly familiar: criticise the target’s overheads and demand more cost-cutting. Unilever and Nestlé have both faced identical showdowns in recent months.

Analysis from consultants Alvarez & Marsal today finds 52 British companies are vulnerable to activist attack — more than in any other European country. Consumer companies, whose share prices have lagged lately, are most at risk, but materials and industrial firms are also highly vulnerable, it says.

Some doubtless deserve a kicking but, for most, the raiders will be a damaging distraction for management and force them to make hasty actions that will hurt their businesses. Only the activists, and the advisers, will benefit.