• Goldman Sachs is the most prestigious investment bank.
• We asked its head of human resources and career experts how to land a job as a midlevel investment banker.
• Candidates should flaunt their domain expertise and be prepared to talk in detail about each item on their résumé.
• Click here for more BI Prime stories.

Goldman Sachs receives 1 million applications for midlevel jobs each year. About 0.5% of those hopefuls — just 5,000 people — get hired. That makes the bank nearly 10 times as selective as Harvard.

Many applicants in that pool are vying for a spot in the firm's prestigious investment-banking division. The positions are lucrative. According to Glassdoor, average annual base pay for Goldman Sachs' vice presidents and managing directors in the US is $162,000 and $423,000, respectively. And those figures bump up to $198,000 and $588,000 if you include bonus pay and profit sharing.

While there's no single formula for standing out, job candidates can help themselves by knowing what Goldman is looking for in new talent and how they evaluate an individual's potential.

Goldman hires candidates across a range of age and experience levels, starting with college interns and going up to established professionals. While hiring out of college is an established process understood by career-services staff at dozens of colleges, knowing how to navigate the hiring process as a mid-career professional can be harder. (A midlevel professional is someone who's about 10 years out of college and already has a banking job or recently graduated from business school.)

Your best bet is to find out what's worked for previous applicants. To that end, Business Insider spoke with a series of experts about Goldman Sachs' hiring practices. They included Dane Holmes, the head of human resources and an 18-year company veteran, Wall Street recruiters, executive coaches, and current and former employees, several of whom asked to speak on condition of anonymity to avoid jeopardizing their relationship with the bank.

The way Holmes sees it, Goldman Sachs approaches hiring like a "balanced conversation of two people meeting, sitting down together at a table, and deciding whether they want to partner together." Holmes said Goldman's approach is different than the past, when companies seemed more like fortresses that candidates needed to find a way to get into.

Here's what we learned about maximizing your chances of getting that coveted offer letter.

Know what Goldman Sachs values in candidates

It doesn't matter whether you're applying to be a summer analyst or a full-time investment banker. Goldman Sachs looks for the same two traits in all job candidates: curiosity and drive.

That's what Holmes had previously told Business Insider. He wrote in an email, "We need people who are committed to growing and learning, and curiosity is critical to that."

Holmes shared a specific formula that every applicant should keep top of mind.

"Effort can't overcome anything, but effort + talent = excellence," he wrote. "These characteristics maximize our impact for our clients, our communities, and our people."

Read more: POWER BROKERS OF FINANCE: HR chiefs from Goldman Sachs, Citi, and BlackRock reveal how to get hired on Wall Street

Just as important, Goldman Sachs wants candidates who can bring something new to the table, said Michael Nelson, who has placed five people at Goldman Sachs in his role as head of the fixed-income area at the executive-search firm Quest Group LLC. For example, Nelson said, you might add "a skill set or client list or trading DNA that the firm doesn't already have."

For seasoned hires, experience matters more than academic credentials

Academic performance isn't the be-all and end-all for midlevel hires at Goldman Sachs. In fact, said Erica Keswin, workplace strategist and a former executive coach at New York University's Stern School of Business, "the more experience you have, the less where you went to school and your extracurriculars and your GPA matter" if you're applying for a job at Goldman Sachs.

That said, Goldman Sachs' employees tend to come from top-ranked schools. According to LinkedIn data, the five schools with the most alumni at Goldman Sachs are the London School of Economics, Columbia, New York University, Harvard, and Oxford.

The bank recruits on business-school campuses, even though it has stopped conducting first-round interviews for undergraduate students at schools. As Holmes wrote in the Harvard Business Review, interviewing undergraduates on campus meant that Goldman Sachs tended to focus on exclusively on top-ranked schools.

Emphasize how your personal passions make you a stronger candidate

"They like you to be interesting," said one independent recruiter who works with the bank a lot. It helps to have interests outside work or to be able to show that you created a nonprofit or are active outside the office. More than other companies, they put stock in your full self, the person said.

In particular, Goldman Sachs looks for evidence of an entrepreneurial mindset in job candidates. If you can articulate to an interviewer why you started or joined a particular organization, and how that experience will help you with the job at hand, that's impressive.

Read more: The CEO of Canada Goose gives job applicants a stark warning about the company, then hires them based on their reaction

Keep in mind the bank's diversity goals

Being a woman or an underrepresented minority may make you a stronger candidate for a midlevel position at Goldman Sachs. Right now, the bank is aiming for gender parity among its staff. To that end, it is interviewing at least two diverse candidates for every role. Diversity refers to race, ethnicity, gender, sexual orientation, and disability, Holmes said.

But historically, Goldman Sachs has been male-dominated. To achieve gender parity in mid- and senior-level roles, the bank has to recruit women from outside the organization, as opposed to promoting from within.

What's more, Holmes said, lateral hiring (which usually means hiring a midlevel professional from another company) "has generally been a dilution to our diversity," so the bank looks explicitly for candidates with different backgrounds.

"Gender is one of many factors" that Goldman Sachs is recruiting for, said Andrea Dine, executive director of the Hiatt Career Center at Brandeis University, which helps students and alumni with job opportunities. (Hiatt places about eight Brandeis students and young alumni at Goldman Sachs each year.) But for an individual applicant in the investment-banking division, Dine said, being a woman "would be an attribute."

Get into a recruiter's database

It's unlikely you'll see an opening for a midlevel investment-banking position at Goldman Sachs posted on a job board. Experienced hires typically hear about openings through recruiters. Usually these recruiters work for Goldman Sachs, though sometimes they work for a talent agency.

If you're looking to make a career move, Keswin said, make sure you have an updated LinkedIn profile and a network of people to recommend you. That way, when the recruiter asks about your experience, you can fill them in right away.

And while it's hard to get a recruiter to take your call, Keswin added, you can ask around to see if anyone can introduce you to a recruiter they know. Your goal here is to get into recruiters' databases, so that when an appropriate role becomes available, your name will pop up.

Prepare for your interview

It's impossible to anticipate every question you'll be asked in a Goldman Sachs job interview, but you'll still want to prepare so that you have at least a general idea of how the conversation will go.

Linda Kreitzman, assistant dean and executive director of the master of financial engineering program at the Haas School of Business at the University of California Berkeley, recommends "Heard on the Street: Quantitative Questions from Wall Street Job Interviews" by Timothy Crack. The book includes questions from real job interviews in investment banking, investment management, and options trading.

You may also want to pair up with a colleague or classmate and practice the technical questions aloud.

And remember: You can use your responses to nontechnical interview questions to stand out from the candidate pool, one former employee said. For example, if your interviewer prompts you to "tell me about yourself," you might explain why Goldman Sachs is critical to your career at that moment, and how you can stand out.

Read more: The head of recruiting at a $3.2 billion health startup says the most impressive thing a job candidate can do is make the interviewer think. Here's how.

Make sure you have your references in order too. Goldman will want to know the names of people who can vouch for your character. Depending on your experience level, Goldman Sachs will get in touch with your clients and ask them about you, said Oliver Rolfe, CEO of the executive-search firm Spartan International.

Flaunt your industry knowledge and domain expertise

For recent college graduates, Keswin said, Goldman Sachs is often "just a name," something impressive to add to your résumé.

Professionals who have been out of school for a decade or so tend to be less "brand-conscious." Typically, Keswin said, working at Goldman Sachs is better for their career because a particular division is stronger than the same group at another bank.

Goldman Sachs expects lateral hires to have more specific expertise than recent college or business-school grads. Interviewers will ask lateral hires highly technical questions to make sure they're familiar with specific products, said one employee. Essentially, that person said, Goldman Sachs wants to know that midlevel hires will start adding value from their very first day at the bank.

In addition to industry knowledge, Goldman Sachs often expects experienced hires to bring a book of business (a list of clients you've worked with before) with them.

Read more: The CEO of Goldman Sachs says Wall Street and the NBA are strikingly similar

Tap your network — carefully

For lateral hires, a referral (that is, having a current Goldman Sachs employee passing along your résumé) increases your chances of landing an interview, but it doesn't guarantee it.

In this way, Goldman Sachs isn't much different from other organizations: Having someone vouch for you might help you stand out from a pool of 100 candidates, but you won't get the job just because of your connections.

That said, networking can be helpful. Don't hesitate to attend industry conferences or other events for people in your area of expertise (for example, bankers in entertainment). At the very least, you'll learn more about the role you want.

Read more: How to make a drastic career change, from an executive coach who's helped countless people unhappy at work

Remember too: Investment banking is a relationship-based business. It's expected that aspiring Goldman Sachs bankers will connect with employees in that division and invite them to coffee. It shows you'd be good at the job.

Steel yourself for a rigorous and lengthy interview process

The Goldman Sachs interview process varies for each candidate. Generally, the more senior you are, the more people you'll be asked to meet with.

According to Oliver Rolfe, of Spartan International, who has a book on finance recruiting set to come out this fall with Troubador Publishing, Goldman Sachs has between six and 12 interview rounds. Another recruiter said it can sometimes be as many as 20. The more senior the candidate, the longer the interview process, Keswin said, so it can take weeks or months before hiring managers reach a decision.

Candidates meet with employees who are both junior and senior to them. A running joke at one independent firm that works with Goldman Sachs often is "you will meet everyone from the secretary to the janitor to the CEO before you get hired."

Kreitzman said some people think Goldman Sachs' interview process is hard or unfair because it's so long. But she believes it's "a very fair system" because meeting so many different people with different roles and perspectives "gives you the chance to shine." The bank doesn't want to "break" you during the interview process, she said; they want to see how you think.

Be ready to talk in detail about everything on your résumé

Goldman Sachs is notorious for drilling down on your résumé, regardless of the role you're applying for.

The worst thing you could do, Dine said, is claim or exaggerate a skill you don't have, like Excel expertise. Even saying you "led" versus "contributed to" a project is a mistake because interviewers may ask you to describe in detail what you did.

Read more: A robot will probably read your résumé before a human does. Here are 3 simple tricks to make sure they don't pass it by.

You'll also have to answer specific questions about your work history. For example, if your interviewer wants to know if you're a good collaborator, they might ask "How did you drive consensus when you were on this team?" as opposed to "Are you a good teammate?"

Show your interviewer how you think

Above all, Kreitzman said, Goldman Sachs value employees who can solve problems. Interviewers want candidates to show their thought process when they answer questions.

That said, interview questions will be very specific to the job you're applying for. For example, if you're a technical person, you should expect probability and math questions.

For investment banking roles, it's especially important to display strategic thinking, or bringing a broader view to an immediate task. For example, can you look at the transaction at hand and come up with ideas that might apply to another client?

Don't discount behavioral and situational interview questions

Aside from technical questions, interviewers will also ask you behavioral and situational questions.

Behavioral questions are used to assess your past behaviors in professional or academic settings relevant to the role. For example: "Describe a time when you used a mistake or failure as an opportunity for learning and/or development."

Situational questions are used to assess how you would respond to hypothetical job scenarios. For example: "You are working with a team member on a project that's due in two days. Unfortunately, your team member is unavailable due to an emergency he needs to attend to. What steps would you take to complete the project?"

Read more: A former Starbucks HR exec shares the single job-interview question that predicts success better than a résumé

These types of questions don't have a specific right answer, Holmes said, which presumably results in more authentic responses. Goldman recently instituted a more structured interview process that uses these question types.

Display strong communication skills

Goldman Sachs places a higher value on interpersonal skills than they did in the past. According to Mike Karp, CEO of the Wall Street headhunting firm Options Group, more than two decades ago they were focused on hiring high-IQ people. Today, they're focused on EQ — emotional intelligence — as well as IQ.

It's not enough to be knowledgeable and competent, Kreitzman said. New hires at Goldman Sachs must also be able to break down complex concepts in layman's terms — as if you were explaining quantum physics to a 13-year-old — though Goldman Sachs doesn't have a specific process for assessing this ability.

You'll get an offer only after the interviewers agree they like you

Goldman Sachs tries to make sure that all members of the team are comfortable with new hires. Holmes said most employees at the bank will work in a highly collaborative environment, so it's important to solicit input from people in different roles. Junior employees are often asked for their feedback on candidates, even if they don't have the final say.

This emphasis on consensus is part of what makes Goldman Sachs' interview process "one of the most rigorous," Karp added.

If rejected, try reapplying a year later

But don't expect to get feedback on your performance or on how to improve, one of the recruiters said.

Holmes encourages candidates to reapply if they don't receive an offer the first time around.

"If we interviewed somebody for a job and ended up not hiring them, it would probably lean much more towards it not being the right opportunity than they weren't a competent candidate," he said.

In fact, Keswin said, if the company's feedback on a candidate was generally positive, a recruiter might call that person again when another job opens up.

Consider the caliber of your prospective coworkers

Will you really thrive in Goldman Sachs' investment-banking division? Ultimately, that depends on the people you're working with.

Holmes told a group of summer 2018 interns that the single most underrated thing people fail to account for when they're choosing a job is how much they like their prospective coworkers.

It's likely that any big bank will demand long hours and the job will be mentally taxing. But Holmes shared with the interns a maxim that applies just as well to midlevel employees: "Working hard feels very different when you like the people around you and when you don't."

SEE ALSO: Goldman Sachs CEO David Solomon shares his best leadership advice

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• Landing a job at Goldman Sachs is tough but not impossible.
• We talked to a number of experts about the bank's hiring practices for investment bankers, including the head of human resources Dane Holmes, Wall Street recruiters, executive coaches, and current and former employees.
• You can read our full guide to landing a job at Goldman here.

Goldman Sachs receives 1 million applications for midlevel jobs each year. About 0.5% of those hopefuls — just 5,000 people — get hired. That makes the bank nearly 10 times as selective as Harvard.

Many applicants in that pool are vying for a spot in the firm's prestigious investment-banking division.

The positions are lucrative.

According to Glassdoor, average annual base pay for Goldman Sachs' vice presidents and managing directors in the US is $162,000 and $423,000, respectively. And those figures bump up to $198,000 and $588,000 if you include bonus pay and profit sharing.

While there's no single formula for standing out, job candidates can help themselves by knowing what Goldman is looking for in new talent and how they evaluate an individual's potential.

Your best bet is to find out what's worked for previous applicants. To that end, Business Insider spoke with a series of experts about Goldman Sachs' hiring practices. They included Dane Holmes, the head of human resources and an 18-year company veteran, Wall Street recruiters, executive coaches, and current and former employees.

You can read our full guide to landing a job at Goldman here through BI Prime.

Join the conversation about this story »

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• Bank of America is chasing smaller deals and expanding its investment bank to far-flung American locations that it had previously ignored, adding San Diego, Nashville, and Salt Lake City to its roster this year.
• BofA's regional and middle-market push, feeding off the bank's vast commercial banking and wealth management footprint, has helped the firm rebound from a difficult 2018. It's clawing back market share and rising up the league tables.
• Now it's doubling down on this strategy, announcing new teams and key hires this summer in a quest to dominate middle-market investment banking. 
• Click here for more BI Prime stories.

To rev up investment banking fees and reclaim market share, Bank of America is chasing smaller deals — and that's taken it to far-flung American locations it had previously ignored. 

 The firm's US dealmaking unit has opened shop in six new cities this year — including San Diego, Nashville, and Salt Lake City — as part of an aggressive push to bolster its regional and middle-market coverage. It's also made key hires, including Rolando Pozos from Wells Fargo earlier this month, who will join a new mid-market M&A team led by Andrew Martin called Private Sales and Divestitures that the bank expects to grow to 30 bankers from 17 by the middle of next year.

Bank of America launched its regional investment banking group three years ago to tap into the roughly 50% of overall advisory deal fees that stem from a bevvy of mid-size companies, as opposed to the megadeals that provide juicy but more sporadic paydays. 

Expanding to untilled US territory beyond New York and San Francisco is hardly a new strategy. Goldman Sachs and JPMorgan Chase have touted similar regional efforts in recent years. Bank of America mothballed its middle-market operation in 2012, only to dust it off again several years later. 

But Bank of America's regional group, now with 18 locations around the country that also include Portland, Minneapolis, and Denver, has come into sharper focus and garnered more investment in the past year as the firm regroups from a dismal investment-banking performance in 2018 that saw the firm cede market share to rivals.

Buoyed by strong results so far in 2019, the bank has been doubling down on the strategy, hiring a slew of bankers and establishing a new group this summer to focus their efforts.

A post-mortem reveals missed opportunities 

Bank of America's investment-banking pain last year was especially acute in the US, where its mergers-and-acquisitions ranking had slipped to 9th from 4th by this point last year before clawing its way up to 6th by year-end, according to Dealogic. Global corporate and investment banking chief Christian Meissner's departure was announced almost exactly one year ago as the firm grappled with the problem, and other execs followed. 

While the factors contributing to a decline at such a large, global operation can be varied and complex, a post-mortem by executives, including Meissner successor Matthew Koder, revealed a couple glaring issues and missed opportunities from a strategic perspective.

Read more: These are the 30 most powerful people in Bank of America Merrill Lynch's $8 billion bond-trading division

In at least two key scenarios, the company was aiming so high that it was turning its nose up at business it was in prime position to handle.

Intense competition for industry-defining megadeals is a hallmark of all top-tier investment banks. But in Bank of America's case, the opportunity in the middle market was getting short shrift, the company realized, and it was outsourcing to boutique investment-banking shops mandates for smaller companies that could add up to serious cash.

"We thought about why we weren't as good as we wanted to be or should be," chief operating officer Tom Montag said at a financial conference last week. "And one reason was we were cutting off what trades we would do or M&A we would do and working with outsiders to execute some of them instead of doing it ourselves."

Bank of America has one the largest networks of both private wealth managers and commercial bankers, who provide more routine banking and lending services to companies ranging from $5 million to $2 billion in revenues.

The company has significantly grown its local ranks since 2014, adding roughly 700 sales staff and 560 bankers for small and mid-size companies, and expanding to nearly 50 new markets.

The firm also has its "thundering herd" of nearly 18,000 wealth managers handling investments for business owners across the country. 

These existing, ready-made local relationships would in theory give BofA an edge when these comparatively smaller companies want to cash out.

But instead, the firm, which has a group within the investment bank called Private Sales Referral Network, was outsourcing most deals between $10 million and $250 million to a roster of roughly 30 boutiques focused more squarely on the middle market. 

The company has since lowered the threshold of deals it will pursue, and is deploying more calvary to hubs in major cities across the country so that investment bankers are primed to jump in when such mandates arise. 

"We didn't want to introduce those people and their companies to somebody else. We're going to help them and assist them in selling their company," Montag said at the conference. 

The bank said despite the strategic shift, its private sales group remains active given the breadth of referrals and overall activity in the mid market.

Courting more private-equity shops

Similarly, the bank was too choosy about the so-called financial sponsors — private equity shops, family offices, and other private capital investors — it would do business with. It had focused on advising the top 50-100 sponsors.

In an era where capital has been abundant and investors are flush with liquidity to orchestrate deals, that meant a lot left on the table that the company was ignoring. It ranked 7th in fees from US sponsors last year, down from 4th in 2017.

The bank has widened its scope to chase business from the top-400 private-equity and investment firms. 

"Our current expanded footprint allows us to spend more time with more clients, many of whom we were already doing business with in other parts of the bank," Kevin Brunner, co-head of M&A in the Americas, told Business Insider. 

The bank is stilling pursuing megadeals like the $56 billion Occidental Petroleum-Anadarko Petroleum and the $48 billion Fiserv-First Data tie-up, which Brunner advised on.

But it's also advising more companies like AxleTech, a Troy, Michigan-based company backed by Carlyle Group that designs and manufactures auto parts and was sold earlier this year to Meritor for $175 million.

The effort is bearing fruit: US middle-market investment-banking revenues are up 17%, and the company's pipeline for such deals is 30% greater than in 2018, the bank says. 

Through the first half of 2019, sore spots like US M&A and financial-sponsor fees have made dramatic improvements. The bank leapt to 6th from 9th in US M&A, and to 2nd from 7th in US fees from private equity shops, according to Dealogic. 

M&A referrals from the wealth management division have risen 67%. 

And more broadly, Bank of America has moved back up to third in overall investment banking fees, both globally and in the US, trailing JPMorgan and Goldman Sachs, according to Dealogic. 

Doubling down

With these promising results, the bank, which has been on a dealmaking hiring blitz more broadly the past year, is further ramping up regional investments. It rolled out a new Emerging Growth and Regional Coverage group in July, hiring Samardh Kumar from Citigroup last month to co-head the operation alongside Brendan Hanley. 

The group houses its regional investment banking effort but also caters to young but rapidly growing companies, especially those in the burgeoning sectors like financial technology, biotech, and ecommerce. 

They're also building out a US private sales and divestitures group within the middle-market M&A unit, which has grown from four to 17 bankers over the past year and is expected to reach a headcount of 30 by mid-2020, the bank said. The bank earlier this month tapped Andrew Martin to lead that team and hired Rolando Pozos, a 20-year veteran, from Wells Fargo, as a managing director earlier this month to bolster the team, according to an internal memo seen by Business Insider and confirmed by a company spokesman. 

While the company will face competition to win these deals and grow middle-market revenues, Brunner called it an "endless" opportunity and said the competition will primarily be over hiring and retaining talented bankers in these regions. 

Montag has declared in no uncertain terms his ambitions to win this business, and he's been ponying up the money to make it happen. 

"This is a market we will and want to be No. 1 in," Montag said. "We had fallen too far, but we think our advantage of having literally 200 different locations in the U.S., where we have commercial and business banking, and building out the 18 locations for investment banking from both a coverage and a product perspective will let us get there."

• Read more:
• Bank of America's investment-banking hiring blitz continues with several more star dealmakers — including a Lazard veteran who worked on a $100 billion beer merger
• These are the 30 most powerful people in Bank of America Merrill Lynch's $8 billion bond-trading division
• Merrill Lynch's 'thundering herd' of advisers are winning over troves of new millionaires, and the growth is coming from a surprising place
• 'The team knows they can do a better job': Bank of America's investment banking chief's out after a tumultuous year

Join the conversation about this story »

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Business Insider recently published the ultimate guide to landing a mid-level job in banking at Goldman Sachs. We shared advice from a range of career experts, including Wall Street recruiters, business-school professors, and the head of Goldman HR himself.

Now, we're offering another opportunity to learn how to position yourself for a role like vice president or managing director at the world's most prestigious investment bank.

On Thursday, October 10 at 1 pm ET, we'll have three experts share their tips on navigating Goldman's application and interview processes.

Business Insider correspondent Shana Lebowitz will moderate a discussion between Erica Keswin, a workplace strategist and a former executive coach at New York University's Stern School of Business; Linda Kreitzman, assistant dean and executive director of the master of financial engineering program at the Haas School of Business at the University of California Berkeley; and Oliver Rolfe, CEO of the executive-search firm Spartan International.

We'll also be taking questions from attendees.

This webinar is a must-see for ambitious professionals in the finance industry.

You can sign up here.

Join the conversation about this story »

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• Investment bankers have been making big money on cannabis-related deals, as cannabis companies race to go public and pursue splashy acquisitions.
• Business Insider compiled a list of the top dealmakers in the cannabis industry, based on data from Dealogic as well as our own reporting.
• Click here for more BI Prime stories, and subscribe to Business Insider's weekly cannabis newsletter, Cultivated. 

Cannabis companies have been going public, merging, and acquiring competitors in a race for a competitive edge as cannabis legalization continues to sweep the globe. 

According to a report from the cannabis accounting and advisory firm MGO|Ello, there were 300 strategic acquisitions worth $8.4 billion in the cannabis space in 2018, up from just $54 million in 2013. All that jockeying within the industry has led to a boom for investment bankers, who help companies raise money, go public, and pursue M&A. 

Under its former CEO, Bruce Linton, Canopy Growth was perhaps the most active of publicly-traded cannabis companies, as it landed a $4 billion investment from the beer giant Constellation Brands, and orchestrated the first Canada-to-US cannabis acquisition with its complex deal to acquire Acreage Holdings.

Read more: Meet the bigshot lawyers who are turning weed into a $194 billion industry

US cannabis company Curaleaf is hot on its heels, having closed two near-billion-dollar acquisitions in the past six months. Because most cannabis startups can't access traditional venture capital, many raced to go public through a process known as a reverse merger last year on the Canadian Securities Exchange to fund their growth — providing a windfall for the bankers who orchestrated these deals. 

Most of the fees from these and similar deals are flowing to boutique and midsize Canadian investment banks (cannabis is federally legal in Canada) that took the initial risk of working in an industry with a hazy regulatory structure in the US. Federal illegality has frozen the biggest US banks from competing on these deals, and most still remain on the sidelines.

Canaccord Genuity, a midsize Canadian investment bank headquartered in Toronto and Vancouver, has grabbed the largest share of fees from the cannabis industry, according to data from Dealogic. As of September 23, Canaccord has netted $122 million in fees from cannabis deals across equity capital markets, M&A, debt capital markets, and loans, amounting to an 18% share of all fees generated from cannabis deals.

Read more: The top 12 venture-capital firms making deals in the booming cannabis industry that's set to skyrocket to $75 billion

While the top-tier US banks are mostly sitting on the sidelines for now, some, like Goldman Sachs, have advised existing clients on cannabis deals.

In an effort to figure out who's making money on these deals, Business Insider put together a list of the top dealmakers in the cannabis industry, based on Dealogic data. We then conducted additional reporting to identify the top cannabis bankers at those firms.

This chart is up-to-date as of September 23. It shows the top ten banks working on cannabis deals and an estimate of how much money they've made in cannabis since 2015, primarily from deals and stock offerings.

Here's the list, organized in order of the league table:

Canaccord Genuity Corp: $122 million

Location: Toronto and Vancouver, Canada 

The bankers: Dan Daviau, Steve Winokur, Tom Pollard, Graham Saunders, Jamie Nagy, Len Sauer, and Jennifer Pardi

Representative transactions: Represented Acreage Holdings on its $3.2 billion acquisition by Canopy Growth, MedReleaf on its $2.3 billion acquisition by Aurora, and Grassroots Cannabis on its $875 million acquisition by Curaleaf, among many others. 

Mid-size Canadian investment bank Canaccord Genuity has grabbed the largest share of cannabis deals so far and has represented some of the largest industry players on marquee, multi-billion transactions. The bank, which leads the cannabis league table, has raised over $3 billion for cannabis companies and has advised on over $12 billion worth of major cannabis M&A transactions across 15 deals.

Canaccord has a large presence in Toronto — what many in the industry consider the center of the cannabis financial world — as well as in New York and Boston. 

GMP Securities: $52 million

Location: Toronto, Canada 

The bankers: Steve Ottaway, managing director of investment banking; Kyle Gould, director, investment banking

Representative transactions: Advised iAnthus on its $640 million acquisition of MPX Bioceutical, advised Curaleaf on its $949 acquisition of Cura Partners 

GMP Securities is behind only Canaccord in cannabis transactions. GMP touts its work in the cannabis sector on its website and says it helped raise $2.8 billion for cannabis clients in 2018. 

GMP sold its capital markets business to St. Louis-based Stifel in June.  

Eight Capital Corp: $44 million

Location: Toronto, Canada

The bankers: Patrick McBride, principal and head of origination; Elizabeth Staltari, principal and managing director, healthcare

Representative transactions: Advised Curaleaf on its $875 million acquisition of Grassroots Cannabis, advised Harvest on its $850 million acquisition of Verano, advised MXY Holdings on its $310 million acquisition by Green Growth Brands. 

Cowen & Company: $38 million

Location: New York

The bankers: Gavin O'Reilly, managing director consumer investment banking and head of cannabis practice; Townsend Ziebold, managing director, consumer investment banking; Dan Schnurman managing director, consumer investment banking

Representative transactions: Joint bookrunner on Tilray's US IPO, joint bookrunner on Greenlane Holdings IPO

Cowen is one of the few US investment banks that have cracked the cannabis top 10. The bank made an aggressive push into cannabis by hiring Ziebold and Schnurman in June to beef up its cannabis banking team.

On the equity research side, Cowen's cannabis analyst Vivien Azer is widely cited in the media and considered a leader in the field. She covers the major Canadian cannabis companies, and recently initiated coverage on five US cannabis companies.

Cowen didn't provide a comment for this story.

BMO Capital Markets: $37 million

Location: Toronto, Canada

The bankers: Dan Barclay, CEO, BMO Capital Markets; Andrew Warkentin, managing director, diversified industries

Representative transactions: Advised Auxly on strategic investment by Imperial Brands, joint bookrunner on Tilray's IPO and $475mm convertible note raise. 

The Bank of Montreal's capital markets group was one of the first of the "Big Five" Canadian banks to initiate coverage of cannabis companies and advise on deals. 

Mackie Research Financial Corp: $33 million

Location: Toronto, Canada

The bankers: Jeff Reymer, managing director investment banking and special situations

Representative transactions: Co-led Aleafia Health's $40.3 million public offering, co-led Flower One's $50 million public offering, among others.

Goldman Sachs: $32 million

Location: New York and global 

Representative transactions: Advised Constellation Brands on its $4 billion equity investment into Canopy Growth

Bulge bracket investment banks have been reticent to underwrite or advise on cannabis transactions as THC is federally illegal in the US. The walls are slowly crumbling, however: by advising an existing client, Constellation Brands, on a cannabis deal, the bank could get some exposure and start learning about the industry while it waits for federal rules to change.

Goldman is also working with GenCanna, a hemp-and-CBD company, on a potential public offering. Hemp was legalized in the US in December through the Farm Bill.

Goldman Sachs declined to comment to Business Insider. 

Cormark Securities: $32 million

Location: Toronto, Canada

The bankers: Alfred Avanessy, managing director, cannabis team lead; Chris Shaw, managing director, head of investment banking

Representative transactions: Advised Cresco Labs on its $300 million acquisition of Tryke, advised Cannimed Therapeutics on its $1.1 billion acquisition by Aurora Cannabis, advised Origin House on its $825 million acquisition by Cresco Labs

Cormark Securities has built out a specialized cannabis team that has been active in both large M&A transactions and financings. 

Shaw told Business Insider to highlight that these deals were a result of a "team effort" on the part of Cormark's cannabis team, which is led by Avanessy. 

Greenhill & Co: $26 million

Location: New York and Toronto

The bankers: Michael Nessim, managing director 

Representative transactions: Advised Canopy Growth on its $4 billion investment from Constellation Brands, advised Canopy Growth on its $3.2 billion acquisition of Acreage Holdings, advised Canopy Growth on its $160 million acquisition of Storz & Bickel. 

Greenhill & Co has benefitted from a longstanding relationship with Canopy Growth — particularly as the company pursued lots of acquisitions under its previous CEO, Bruce Linton.

Clarus Securities: $22 million

Location: Toronto

The bankers: Robert Orviss, managing director; April Cuadra, equity capital markets; Edward Drake, VP of investment banking 

Representative transactions: Co-led Slang Worldwide's IPO, advised Scythian Biosciences on its $300 million sale of its Latin American assets to Aphria 

Clarus Securities is an active participant in the cannabis market, helping numerous companies go public on the Canadian Securities Exchange through a reverse takeover in 2018.

Clarus didn't respond to requests for comment.

• Investment bankers have been making big money on cannabis-related deals, as cannabis companies race to go public and pursue splashy acquisitions.
• Business Insider compiled a list of the top dealmakers in the cannabis industry, based on data from Dealogic as well as our own reporting.
• The full list is available exclusively to BI Prime subscribers.
• Click here for more BI Prime stories, and subscribe to Business Insider's weekly cannabis newsletter, Cultivated.

Cannabis companies have been going public, merging, and acquiring competitors in a race for a competitive edge as cannabis legalization continues to sweep the globe.

According to a report from the cannabis accounting and advisory firm MGO|Ello, there were 300 strategic acquisitions worth $8.4 billion in the cannabis space in 2018, up from just $54 million in 2013. All that jockeying within the industry has led to a boom for investment bankers, who help companies raise money, go public, and pursue M&A.

Under its former CEO, Bruce Linton, Canopy Growth was perhaps the most active of publicly-traded cannabis companies, as it landed a $4 billion investment from the beer giant Constellation Brands, and orchestrated the first Canada-to-US cannabis acquisition with its complex deal to acquire Acreage Holdings.

Read more: The top 12 venture-capital firms making deals in the booming cannabis industry 

Most of the fees from these and similar deals are flowing to boutique and midsize Canadian investment banks (cannabis is federally legal in Canada) that took the initial risk of working in an industry with a hazy regulatory structure in the US

While the top-tier US banks are mostly sitting on the sidelines for now, some, like Goldman Sachs, have advised existing clients on cannabis deals.

In an effort to figure out who's making money on these deals, Business Insider put together a list of the top dealmakers in the cannabis industry, based on Dealogic data. We then conducted additional reporting to identify the top cannabis bankers at those firms.

Subscribe to Business Insider Prime to see which banks – and bankers — are leading on cannabis deals, and how much money they're pulling in. 

Join the conversation about this story »

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Welcome to Cultivated, our weekly newsletter where we're bringing you an inside look at the deals, trends, and personalities driving the multibillion-dollar global cannabis boom. Sign up here to get it in your inbox every Friday.

Happy Friday, 

Lots of cannabis-related news this week.

To start off, I'd like to highlight an exclusive list we put together, taking a peek under the hood of all of the cannabis deals in the past year — from the wild RTO market in the last quarter of 2018, to the near-billion dollar mega-mergers throughout this year. 

In any public offering or M&A deal, there's always investment bankers making money. To figure out who's profiting on cannabis deals, we pulled data from Dealogic and did a lot of our own reporting to identify the top dealmakers at the banks advising on these transactions.

Because THC is federally illegal in the US, most of the fees from these deals have flowed to a small group of midsize Canadian shops like Canaccord Genuity and GMP Securities. 

Click the link below to check out our exclusive reporting. 

Here are the top bankers raising money, putting together deals, and raking in millions in the global cannabis industry

Now, let's break down the big news in cannabis this week: 

On the SAFE Banking Act

The SAFE Banking Act, which would allow cannabis businesses to access commercial banking services like checking accounts and opening lines of credit, passed the House on Wednesday by a huge margin: 321 to 103, with 91 Republicans voting in favor.

While yes, there was some other important stuff happening in the House that day (Donald who?), it shouldn't be overlooked that this was the first time a standalone cannabis bill has come to a House floor vote — and passed overwhelmingly. The amount of Republican support also bodes well for a version of this bill passing the Senate, experts say.

The chair of the Senate Banking Committee, Mike Crapo, told Politico he wants a vote on the bill before the end of the year, and that he's confident about its prospects in the Senate. Even Republicans who don't support cannabis legalization, like Rep. Steve Stivers, supported the banking bill as a way to protect small businesses from dealing with large sums of cash, and all the problems that may pose. We reported on some of those issues last year. 

Analysts are mixed on whether the bill will pass the Senate. Cowen's team of cannabis analysts said they expect the SAFE Banking Act to become law before 2020, based on the level of Republican support for the House version. Stifel analysts said the bill faces a tough pass in the Senate, and large financial institutions will still "tread lightly" if the bill is passed. 

It's important to note that the SAFE Banking Act, if passed, likely would not provide enough of a legal framework for bulge bracket investment banks and institutional investors to enter the cannabis industry. It's aimed at small businesses, not capital markets.

Canna-business owners still applauded the legislation, including Canndescent's Adrian Sedlin, who said the bill will help US cannabis companies from paying "usurious rates" for financing and dealing with an all-cash payroll. 

As well, cannabis legalization advocates said that while the bill helps the cannabis industry, it does not go far enough in supporting the restorative justice aim of the cannabis legalization movement, which seeks to help those affected by the War on Drugs access the wealth-creating opportunities of the newly-legal industry. 

I spoke with Seke Ballard, the CEO of Good Tree Capital — which pools money from accredited investors and lends to minority cannabis entrepreneurs — about the bill last week before it passed. While he said that bank financing is "a step in the right direction" for minority entrepreneurs, he cautioned that it's not a "silver bullet."

"The challenge with the banking bill is that it doesn't go far enough. And frankly, action on banking is probably the most important source of leverage for broader action. If Congress passes the SAFE Act without accompanying legislation to ensure restorative justice for the harmed individuals and communities, then how likely is it that they can generate the political support to pass the restorative justice elements separately?" Ballard told me. 

Other legislation, including Rep. Jerrold Nadler's MORE Act, go much further in both protecting financial institutions as well as creating funds that would help minority entrepreneurs start cannabis businesses. 

On the state front, Pennsylvania Governor Tom Wolfe announced his support for legal cannabis, and New York Governor Andrew Cuomo said he will work with his counterpart in Connecticut to come up with a legalized cannabis regime that is consistent across the region. 

On vape-related illnesses 

The spate of vape-related illnesses continues. On Friday, the CDC gave updated numbers— 805 illnesses and 12 deaths — and told reporters on a call that 77% of people who were ill reported using vapes containing THC. While the CDC said THC isn't solely to blame, and e-cigarettes are not, by any means, off the hook, the CDC encouraged people to stop vaping.

The CDC also noted that most of the THC-containing products that were tied to the illnesses were obtained from "informal sources," such as people's friends or from a dealer. A recent study of 18 THC-containing vape cartridges commissioned by NBC News showed that 13 out of the 15 cartridges obtained from the illicit market contained vitamin-E acetate — a substance which has been linked to the illnesses — and ten of the illicit cartridges were found to contain the pesticide myclobutanil, which can turn into hydrogen cyanide when heated. The cartridges bought at legal dispensaries did not contain vitamin-E acetate. 

Some states, including Massachusetts, have placed a temporary moratorium on vape products. Public health experts and officials warned that these bans may turn consumers back to regular old cigarettes. 

I spoke to Canopy Growth's new CEO, Mark Zekulin, on the sidelines of the Concordia Summit on Monday. As the cannabis giant prepares to release vapes in Canada ("Cannabis 2.0"), Zekulin said that regulated products are safer, and allow for "tamper-resistant" and "traceable" supply chains. "More regulation is a good thing," said Zekulin. 

Bank of America cannabis analyst Christopher Carey downgraded Canopy Growth from Buy to Neutral on Friday morning and said that the headline risk associated with vape-related illnesses is weighing down share prices in the sector. 

Vape pen sales are down significantly since August in states with legal cannabis dispensaries, according to data from Headset, a cannabis market research firm.

We have a timeline on the vape illnesses here, and we're constantly updating it.

And just a quick plug: I'll be moderating a talk with Trulieve CEO Kim Rivers at the Arcview Investor Forum in New York on Wednesday. If you're at the conference, come say hi! 

More stories from around the BI newsroom:

Capital raises, M&A activity, partnerships, and launches

• Canadian LP Pure Global Cannabis signed a joint venture with KMT-Hansa Corp, to cultivate and process hemp-derived CBD products in Yunnan Province, China. It's the second Canadian LP to enter into an agreement with a Chinese CBD company.
• Israel-based PlantEXT, which develops intellectual property and products for pharmaceutical cannabis entered into an agreement with BB1 Acquisition Corp to pursue a reverse takeover on the TSX Venture exchange in late Fall of this year. The company is looking to raise up to $7 million through a private offering. 
• Hawaii-based psychedelic biotech company Orthogonal Thinker raised $2.5 million in funding to develop its product, Psilly, a plant-based psilocin pro-drug. Psilocin is found in "magic mushrooms". The new funding brings Orthogonal's total funding to $4 million.
• Greenlane Holdings has entered into an agreement to acquire Conscious Wholesale, which sells cannabis accessories in Europe. 
• Curaleaf launches "ground flower pods" for medical consumers in New York. Each Curaleaf Ground Flower Pod contains 350mg of active cannabinoids, the company said. 
• Harvest Health & Recreation is partnering with The Last Prisoner Project to help prisoners convicted on cannabis charges eventually land jobs in the new industry once they are released. 
• Cannabiniers — the makers of Two Roots, a cannabis-infused beer — is launching a line of THC and CBD-infused seltzers. 

Executive moves

• John Malone joins the Shryne Group as its new general counsel. Malone was previously at Arent Fox, LLP.
• Arizona-based cannabis company 4Front has added two new members to its board: Betty Aldworth, the executive director of Students for Sensible Drug Policy, and Kathi Lentzsch the CEO of Bartell Drugs. 
• Lewis Koski left his eponymous consulting firm, Freedman & Koski, to become the COO of the Florida-based Metrc, LLC, a "seed-to-sale" tracking firm.
• US cannabis company Harvest Health & Recreation announced the departures of Steve Gutterman, the company's president (personal reasons) and board member Frank Bedu-Addo (to focus on personal business endeavors), the company said. Harvest is looking to replace Bedu-Addo.

Chart of the week

This one is from our exclusive list of the bankers raking in millions on cannabis deals. Here's what the cannabis league table for investment banks look like, from 2015 through September 23, 2019. As you can see, Canaccord Genuity still leads the pack: 

Stories from around the web

Tests show bootleg marijuana vapes tainted with hydrogen cyanide (NBC News)

Sales of illicit vaping products find home online (Wall Street Journal)

Journey of a tainted vape cartridge: from China's labs to your lungs (Leafly)

Early signs of vaping health risks were missed or ignored (Bloomberg)

Dr. Sanjay Gupta on medical marijuana: We are in an age of wisdom, but also an age of foolishness (CNN)

How Republicans learned to love a pot bill (Politico)

Did I miss anything? Have a tip? Just want to chat? Send me a note at jberke@businessinsider.com or find me on twitter @jfberke. 

Join the conversation about this story »

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Welcome to Cultivated, our weekly newsletter where we're bringing you an inside look at the deals, trends, and personalities driving the multibillion-dollar global cannabis boom. Sign up here to get it in your inbox every Friday.

Happy Friday, 

Welcome to another edition of Cultivated. I spent much of the week chatting with folks from all over the cannabis industry at the Arcview Investor Forum, which has handily located seven floors below Business Insider's headquarters.

I interviewed Trulieve CEO Kim Rivers on the main stage on Wednesday where our discussion touched on what it's like to be one of the few female CEOs of a publicly-traded cannabis company, how she's working to "inject diversity" into her board and throughout the company, as well as some more nuts-and-bolts stuff about the business.

Check out my top cannabis stories from this week below, including an exclusive report on dangerous chemicals in illicit vapes, Square jumping into the CBD industry, and a rundown of the key lessons startup CEOs learned while raising venture capital in the crazy cannabis industry.

-Jeremy 

Here's what we wrote about this week:

A California cannabis lab tested counterfeit vapes and found high levels of dangerous chemicals including vitamin E, pesticides, and hydrogen cyanide

In a new report shared exclusively with Business Insider, California cannabis-testing lab CannaSafe found that out of 12 illicit vape cartridges tested, nine contained dangerously high levels of Vitamin E acetate. All of them contained pesticides.

Out of 104 legal vapes tested, none contained vitamin E acetate or banned pesticides, and all matched their THC label claims. 

Capital raises, M&A activity, partnerships, and launches

• PathogenDx, a DNA-based testing technology for the cannabis and hemp industries, closed a $7.5 million Series B round led by Entourage Effect Capital, Altitude Investment Management, and more.
• Cresco Capital Partners announced its name change to Entourage Effect Capital. The firm is launching a new fund with an initial target of $150 million, managing partner Matt Hawkins told me on the sidelines of the Arcview conference. 
• Canopy Growth purchased a 72% stake in Biosteel Sports, with a path to complete ownership. As part of the deal, Canopy and Biosteel will produce a CBD-infused beverage as soon as regulations permit.
• Cannabis website Leafly has launched a super-cool new tool: The Leafly Cannabis Guide. Built by Harvard Neuroscience Ph.D. and Leafly data scientist Nick Jikomes, the tool breaks down the active compounds in cannabis — including the terpenes and cannabinoids — and puts it into a handy visualization tool so you can see exactly what's in your strain. 
• Vape company Dosist is launching a dose-controlled sublingual THC tablet. CEO Gunner Winston told me he saw a need in the market for micro-dosable, non-vape consumption methods. 

Executive moves

• Ellen Deutsch, a former Haines executive, is joining Stem Holdings as COO.
• Ex-NBA player Jamal Mashburn is joining Revolution Enterprises as an advisor to the board.
• Former Aphria president Jakob Ripshtein is joining the Israel-based Seedo's advisory board.
• Nina Simosko, previously the CEO of NTT Innovation Institute Inc is joining the NASDAQ-listed Akerna Corp as Chief Revenue Officer.

Stories from around the web

• These California politicians once helped regulate legal marijuana. Now they're working for the industry. (LA Times)
• Vermont's medical marijuana dispensaries control access to their 'public' records (Seven Days VT)

• Inside America's First Cannabis Cafe (Bloomberg)

Did I miss anything? Have a tip? Just want to chat? Send me a note at jberke@businessinsider.com or find me on twitter @jfberke.  

Join the conversation about this story »

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• Goldman Sachs reported third-quarter earnings before markets opened on Tuesday.
• The bank traded as much as 1.9% lower after missing analyst estimates for quarterly earnings per share. It also posted a decline in investment-banking revenue.
• Goldman said it took a $267 million markdown on public investments in companies like Uber and Tradeweb Markets.
• Watch Goldman Sachs trade live here.

Goldman Sachs reported third-quarter earnings that missed analyst estimates on Tuesday morning. The firm also reported investment-banking revenue that declined 15% from the prior period.

The investment bank also took a $267 million markdown on public investments in companies like Uber and Tradeweb Markets. It marked the worst performance in three years for the bank's equity investments, according to Bloomberg.

Goldman's stock fell as much as 1.9% on the report.

Here are the key numbers:

• Revenue: $8.32 billion, versus the $8.31 billion estimate
• Earnings per share: $4.79, versus the $4.86 estimate
• Investment-banking revenue: $1.69 billion, versus the $1.80 billion estimate
• Equities sales and trading revenue: $1.88 billion, versus the $1.82 billion estimate
• Fixed-income sales and trading revenue: $1.41 billion, versus the $1.35 billion estimate

"Our results through the third quarter reflect the underlying strength of our global client franchise and its ability to produce solid results in the context of a mixed operating environment," CEO David Solomon said.

Goldman is among several banks announcing earnings this week; Citibank and JPMorgan Chase are set to announce their latest figures on Tuesday. Bank of America, Netflix, and American Express are among the other large-cap companies scheduled to release third-quarter reports this week.

Read more:A fund manager who's averaged a 16% annual return since the financial crisis shares his 'secret weapon' — and unpacks 3 stocks driving his success

Goldman Sachs closed at $205.82 on Monday, up roughly 23% year-to-date.

The bank has 11 "buy" ratings, 12 "hold" ratings, and two "sell" ratings from analysts, with a consensus price target of $236, according to Bloomberg data.

Now read more markets coverage from Markets Insider and Business Insider:

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Notorious cannabis producer CannTrust will destroy $77 million of weed inventory and plants to gain regulatory approval

Shopify is quickly gobbling up e-commerce. Its director of product reveals how avoiding the Amazon model helped fuel its meteoric rise.

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• Some of the largest Wall Street banks are starting to sniff around the cannabis industry, despite THC being federally illegal.
• Goldman Sachs, JPMorgan, and Credit Suisse have helped cannabis-related SPACs go public in the US and have advised existing clients on cannabis-related deals, though they are careful to stay on the right side of US federal law. 
• Click here for more BI Prime stories, and subscribe to our weekly cannabis newsletter, Cultivated. 

As cannabis reform becomes one of the most hotly-debated topics in Congress, some of the largest Wall Street banks are slowly dipping their toes into the industry.

The chief psychoactive component of cannabis, THC, is illegal under US federal law despite being legalized in some form in 33 states. Most federally chartered US investment banks won't raise money or advise on deals for companies that are actively violating federal law, no matter how attractive the growth prospects of the industry are.

Still, the banks are starting to figure out how to serve cannabis companies and develop relationships within the nascent but expanding industry, in a bid for first-mover advantage if or when the market opens up thanks to changes in federal law.

Read more: Here are the top bankers raising money, putting together deals, and raking in millions in the global cannabis industry

Credit Suisse and Citigroup have each led US IPOs for companies that are looking to invest in FDA-approved cannabis therapies or technology that supports cannabis companies. JPMorgan and Goldman Sachs have helped existing clients with cannabis-related deals, though their clients don't sell or cultivate THC themselves. And BNY Mellon is providing services to a US-listed cannabis ETF. 

None of the banks would comment for this story. 

For large banks, the fees they have so far generated from cannabis deals are marginal, according to the data provider Dealogic. But that's set to change if the US legalizes cannabis at the federal level, says Steven Miller, a due diligence expert at Thomson Reuters, who expects a "green rush," if that happens.

Big banks will be "falling all over each other to get into the market," Miller said.

The cannabis industry — and all of its constituent parts, including pharmaceuticals, recreational products, industrial hemp, and ancillary software and services — could become an $80 billion industry by 2030 if the federal government legalizes the drug, according to the investment bank Cowen.

The SAFE Banking Act could be the first crack in a 'floodgate' of capital to enter the cannabis industry

Congress, for its part, is working on it, and the 2020 elections could create an opening as well.

Most Democratic candidates for president support full-scale legalization, including frontrunners like Sens. Elizabeth Warren and Bernie Sanders. Former Vice President Joe Biden is perhaps the least supportive, though he has voiced support for limited medical marijuana legalization.

The Trump administration hasn't supported federal legalization but has also allowed states to proceed with their own legalization efforts.

In September, the House of Representatives, which has a Democratic majority, passed the SAFE Banking Act by a wide margin. It was the first standalone piece of cannabis legislation to pass the chamber.

The bill would specifically prohibit federal regulators from terminating or limiting a bank's deposit insurance coverage or charter for working with cannabis businesses in states where the drug is legal, allowing cannabis businesses to open up checking accounts, credit lines, receive loans like any other legal business.

It would also, according to some experts, allow THC-touching cannabis companies to list on US exchanges and access deeper capital markets than what's available in Canada. 

While the bill is now in the Republican-controlled Senate's hands — and is far from a done deal — it would be the first crack in a "floodgate" of capital that would flow toward the cannabis industry if the US federal government fully removes cannabis from the Controlled Substances Act, said Peter Dugas, the managing principal of consulting firm Capco's Washington DC-based regulatory intelligence group.

"It's going to be a very competitive marketplace like we've never seen once that happens," Dugas said.

Read more: Big asset managers like BlackRock are sitting on the sidelines of the $75 billion US marijuana industry because of one big pain point

But even if the SAFE Banking Act passes, it will primarily free up state-chartered institutions like credit unions — who might be more willing to do business in riskier areas in order to grow more quickly — in states where cannabis is legal to serve the growing industry, experts say. Federally-chartered banks like Goldman Sachs and Bank of America are likely going to wait for full-scale legalization. 

"The big banks are focused on getting derisked," Miller said. "They're not taking on any more risk. It's all about limiting risks rather than focusing on huge potential upside." 

Advising cannabis clients boils down to how much risk a financial institution is willing to take on. And doing due diligence on clients in an industry that operated illicitly for decades is an ongoing challenge, something only the most sophisticated banks are capable of, Dugas said.

"As of now, most financial institutions are very leery and concerned about engaging in cannabis-related activity," says Dugas. "The complexity around it is that you have to both understand federal as well as state laws. And it's more than just federal law as it relates to the Controlled Substances Act and money laundering. You have to look at the FDA and their related activity to really understand the full scope of the landscape and how they would advise any related business." 

For what it's worth, Dugas says he has a large number of clients — specifically banks — that have asked him about engaging with cannabis. "We've been hesitant because, at this point, it's even us assuming the risk related to our advice and counsel," says Dugas. 

For now, most of the fees from cannabis-related deals flow to Canadian investment banks as cannabis is legal in Canada. Canaccord Genuity, with headquarters in Vancouver and Toronto, has so far dominated cannabis-related investment banking, but investor sentiment toward the industry has soured somewhat as Canadian Securities Exchange-listed cannabis companies that sell or cultivate THC in the US — known as multistate operators in industry parlance — have seen their share prices tumble and struggled to close M&A transactions. 

But for some midsize US banks, like Cowen, gaining a foothold in the industry before bigger players come in is worth both the legal and financial risk. Cowen has started covering both Canadian and US cannabis companies and the bank has built out dedicated teams to pursue deals. There are a few boutique firms located who advise on cannabis deals as well, including ELLO Capital and North Point Advisors, among others. 

From Credit Suisse to Goldman Sachs, Wall Street wants a piece of the cannabis pie

It's clear that Wall Street wants a piece of the action, either through advising existing clients on deals with Canadian cannabis companies or by taking cannabis-related companies public in the US. It's a way to get some exposure and learn about the industry while staying onside of federal regulations. 

In August, Credit Suisse became the first bulge bracket investment bank to lead a US cannabis IPO, when it acted as the sole bookrunner on Silver Spike Capital's $250 million public offering on the NASDAQ, through a special purpose acquisition company, or SPAC.

At the time, Silver Spike's CEO, Scott Gordon, told Business Insider that the cannabis industry is "approaching its moment of institutionalization."

"What we're trying to do is stay a little bit ahead of the curve so that when it does happen, we're operational and we're not chasing it," said Gordon. 

A Credit Suisse spokesperson declined to comment to Business Insider. 

After Business Insider reported on talks high-level Citigroup executives held about working with cannabis companies in March, the bank made its first foray into cannabis, leading Bespoke Capital Acquisition Corp's $350 million IPO in August, another cannabis-related SPAC. The bank's Canadian arm handled the deal, according to a note from Viridian Capital Advisors, a New York City-based cannabis advisory firm.

Read more: A large chunk of the world's top investors say cannabis is the industry with the most growth potential this year — and hedge funds are the most bullish

In December, JPMorgan Chase provided financing for the tobacco giant Altria's $1.8 billion purchase of an equity stake in Canadian cannabis producer Cronos Group. 

And BNY Mellon started providing custodial services to a cannabis ETF (the aptly named AdvisorShares 'YOLO') in April, Business Insider reported, potentially solving one of the biggest pain points for large institutional investors like BlackRock to get into cannabis.

A spokesperson for BNY confirmed to Business Insider at the time that the bank was working with the ETF and said that it met "our internal governance requirements." 

Goldman Sachs has also been poking around the space. Last year, the bank advised its existing client — Constellation Brands — on its landmark $4 billion investment into Canadian cannabis behemoth Canopy Growth. The bank has pulled in $32 million in fees from cannabis-related investment banking, according to the data provider Dealogic. 

The bank is also working to take GenCanna, a Kentucky hemp-and-CBD company, public in the US. Hemp and hemp-derived CBD were legalized after President Trump signed the Farm Bill into law in December.

A Goldman Sachs spokesperson declined to comment to Business Insider. 

To Scott Hammon, a partner at the accounting and advisory firm MGO, Goldman's push into hemp could be a sign that banks feel more comfortable pursuing a cannabis strategy around CBD, rather than THC.

"Some of the investors that were playing in THC have reallocated some or all of their portfolios to CBD," says Hammon. "It's less bumpy, and there's a much clearer path to federal legality."

Join the conversation about this story »

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• A pair of investment bankers and lovers sold confidential information about corporate deals as part of a "large-scale, international insider-trading ring" that generated tens of millions of dollars in profits, federal prosecutors said in an indictment unsealed this week.
• Benjamin Taylor and Darina Windsor worked for global investment banks, shared a London apartment, and called each other "Pops" and Popsy" in emails, the US government said.
• They received more than $1 million in cash, trips, expensive watches, designer clothes, and other luxuries in exchange for inside information, prosecutors said.
• Visit Business Insider's homepage for more stories.

  ---

The banking sector might have its very own Bonnie and Clyde, minus the car chases and dramatic deaths.

A pair of investment bankers and lovers sold confidential information about corporate deals as part of a "large-scale, international insider-trading ring" that generated tens of millions of dollars in profits, federal prosecutors said in an indictment filed in Manhattan and unsealed this week.

Benjamin Taylor and Darina Windsor worked for global investment banks, shared a London apartment, and called each other "Pops" and Popsy" in emails, the US government said. The story was first reported by Bloomberg.

They sold inside information about 22 companies including Merck, Amgen, and Celgene to two middlemen between late 2012 and early 2018, prosecutors said. The intermediaries then passed on the tips to securities traders, including one in Switzerland who leaked the stolen details to a journalist and made trades that netted him $1 million in profit when news of the deal became public, the government said.

Taylor allegedly used burner phones to communicate with middlemen, and exchanged cryptic emails with Windsor. 

"Once upon a time, there was a Pops searching for Truffles in the Forest," Windsor titled an email to Taylor with confidential details about Onyx Pharmaceuticals attached prosecutors said. Onyx was acquired by Amgen for $8.5 billion in 2013.

Taylor and Windsor received more than $1 million in cash, trips, expensive watches, designer clothes, and other luxuries in exchange for the information, prosecutors said.

The charges against them are part of a federal probe into investors in Europe and the Middle East who have netted tens of millions of dollars by making trades before deal news breaks, Bloomberg said.

Join the conversation about this story »

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• Business Insider is mapping out the power structure in the global banking and markets businesses overseen by Bank of America Merrill Lynch Chief Operating Officer Tom Montag — one of the most powerful executives on Wall Street.
• We've identified 40 of the most powerful people in the bank's new-look corporate and investment bank, which has been surging in 2019 following a leadership overhaul. 
• Business Insider spoke with insiders, ex-employees, consultants, and other industry experts for this project.
• Click here for more BI Prime stories.

At a financial conference in early September, Tom Montag, the chief operating officer at Bank of America Merrill Lynch, spent the bulk of his time on stage shedding light on the comeback story of the year at his firm — the resurgence of its investment-banking business. 

About a year earlier, Montag, who oversees global banking and markets at BofA, began executing an overhaul of the firm's corporate and investment bank, which in 2018 saw revenues and league-table market share take a nosedive. 

Division chief Christian Meissner departed after an eight-year run as the firm reckoned with the struggles, and other execs, including top deputy Diego De Giorgi, followed him out the door in the ensuing months as well. 

Montag promoted Matthew Koder as Meissner's replacement, and the duo set to work reviving the business.

The strategy has included chasing more middle-market deal fees in previously overlooked regional locales, in part by tapping into the firm's existing advantages from its vast wealth management and commercial banking footprint.

It has also included hiring a slew of talented bankers from the outside.  

Read more: We found the 50 most powerful people in Bank of America's trading division. Here are our exclusive org charts.

It's hard to argue with the results: During the third quarter of 2019, the bank earned investment-banking advisory fees of $427 million, up 80% from the firm's woeful third quarter last year. Through the first nine months, advisory fees increased 26% to just shy of $1 billion. 

Meanwhile, on the league tables for the US — the epicenter of the firm's struggles last year — Bank of America rebounded to 4th from 8th in mergers and acquisitions fees, and climbed to third from fourth in overall US investment-banking fees, according to Dealogic. 

Business Insider has been mapping out the power structure in the global-banking and markets businesses Montag oversees. We've highlighted top leaders in the bank's $8 billion bond-trading unit as well as its equities sales and trading division.

The corporate and investment banking overhaul and the associated hiring blitz has ushered in fresh faces into top roles. 

Business Insider spoke with insiders, ex-employees, consultants, and other industry experts to gain insight into the reporting structure within the new-look division. We've focused on front-office execs that bear the primary responsibility for driving the group's revenue — no back-office roles appear in our chart. 

Read on to check out our organizational chart featuring 40 of the most powerful people leading Bank of America's surging corporate and investment bank.

To see more leaders within a particular group, click the "division leadership" buttons. 

Have more information about the organizational structure within Bank of America Merrill Lynch? Contact the reporter at amorrell@businessinsider.com or via encrypted chat with Signal or Telegram. 

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• A recent study by Goldman Sachs analyzed 528 large-cap mutual funds managing $2.5 trillion in assets and found that 77% have all-men portfolio management teams. 
• In contrast, women-only teams made up only 3% of the group.
• The report found some slight differences in sectors men and women favor. But, over the last three years, fund performance has been about the same regardless of the makeup of the  team. 
• Read more on Business Insider.

Mutual fund investing is still mostly a man's world, according to a recent study by Goldman Sachs. 

In a recent analysis, the bank found that 409 out of 528 large-cap mutual funds with $2.5 trillion in assets had portfolio management teams that were all men.

That means 77% of the funds Goldman looked at didn't include a single woman, according to a Monday note from a team led by David Kostin. Those funds with only-men portfolio managers account for 64% of domestic equity mutual fund assets, according to the report. 

By contrast, only 15 of the funds analyzed had all-women teams, just 3% of the total. The women-only teams collectively manage just 1% of total assets, the report showed. 

"Female-managed funds," or those where women account for at least 33% of total portfolio managers, accounted for 14% of the total funds analyzed and represent 8% of the total assets under management, according to the study.  

The report found that men and women portfolio managers prefer different sectors. Women invest more heavily in information technology and utilities, where men prefer financials services. 

At the stock level, women-led funds have the highest exposure to Amazon, Apple, Nike, and Microsoft. The same funds are the least exposed to Berkshire Hathaway, Comcast, UnitedHealth Group, and JPMorgan Chase. 

But even though men and women favor different sectors, returns are about the same. 

Since the beginning of 2017, 39% of women-led funds outperformed benchmarks each year compared to 41% of all other funds. Return volatility and Sharpe ratios have been "almost identical" across teams that are men only, women only, and mixed gender, the study showed.

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• The decade started off cold, but the 2010s produced some of the frothiest years for mergers and acquisitions in history. 
• Business Insider spoke with M&A bankers, lawyers, and academics to determine 10 of the most significant deals of the decade. 
• While some of the largest deals of the 2010s appear on this list, this is not a list of the largest deals of the 2010s — we considered and included deals of all sizes and from a variety of industries. 
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With the economy in the dumps and gun-shy corporate boards hoarding cash following the financial crisis, mergers and acquisitions were ice-cold at the start of this decade. 

But in the ensuing years, a 10-year bull market unfolded, economic fortunes rebounded, corporate execs brimmed with confidence, and dealmakers got their mojo back. The latter half of the 2010s has produced some of the frothiest years for global M&A in history, with each of the last five years generating more than $3 trillion in global announced deal volume, according to Bloomberg data. 

Along the way, different trends helped propel dealmaking. In the early 2010s, corporate inversions to save on taxes were the rage — up until the US government put the kibosh on such deals in 2014. Activist investors have grown in prominence and influence, kicking up dust and maneuvering for deals across the world. 

And the rise of tech giants throughout the decade, and the influence of technology across industries, has spurred waves of transactions from companies willing to pay up to gain an edge or, in some cases, stave off their own obsolescence. 

Business Insider spoke with M&A bankers, lawyers, and academics to determine 10 of the most significant deals of the decade. 

While some of the largest deals of the 2010s appear on this list, this is not a list of the largest deals of the 2010s.

Some acquisitions that may have seemed small and inconsequential at the time have grown weighty in retrospect, like Facebook's acquisition of Instagram for a mere $1 billion. Or, in the case of Amazon's $13.7 billion deal for Whole Foods, the very nature of an unexpected buyer threatened to upend an entire industry and put management teams across America on notice that the same could happen to them. 

For this project, we reviewed and included deals from a variety of industries, though we didn't consider deals that have not closed or received regulatory approval. 

Here are 10 of the most significant mergers and acquisitions of the decade that made history, transformed industries, and made a lasting impression in the world of dealmaking. 

2011: Gilead acquires Pharmasett — $11 billion

What price tag do you put on a pill that can cure a disease that afflicts millions around the world?

That's one of the questions Gilead Pharmaceuticals had to reckon with after stumbling upon a knockout hepatitis C drug — a query that eventually dominated the industry, prompting a national conversation as well as scrutiny from lawmakers. 

But before that, ironically, Gilead was dogged by another question: Why did you pay so much for a tiny, unproven drug company? Initially, Wall Street was not thrilled with the $11 billion buyout of budding hep C developer Pharmasett. 

"For Gilead to give up effectively one-third of their value for an unproven asset still subject to significant ongoing clinical risk seems remarkable," Geoffrey Porges, then an analyst at Sanford Bernstein, wrote in a note reacting to the deal. 

But Gilead realized it had a winner on its hands in Sovaldi — an oral regimen for hep C with limited side effects that had dramatic cure rates that approached 95%. So then came the question of price. Gilead settled on charging about $1,000 per pill, or an eye-popping $84,000 for a full course of treatment. 

That choice helped Gilead's line of hep C treatments become one of the most successful drug launches of all time. Sovaldi was nearly the best-selling drug on earth the first year of its launch in 2014, and, along with follow-on release Harvoni, produced nearly $45 billion in revenues in three years.  

While that pleased investors, it drew the ire of patients, insurers, and government officials, sparking a broader debate around drug pricing. A Senate investigation concluded in 2015 that the Gilead put profits ahead of patients in pricing its hep C cure. 

2012: Facebook acquires Instagram — $1 billion

The year is 2012. Facebook is still a private company but also by now a household name, having been immortalized by Jesse Eisenberg, Andrew Garfield, and Justin Timberlake in "The Social Network." The ascendant juggernaut is still years away from uniting a divided country in scorn, piling up scandals, and making a case for the "vampire squid" crown of the 2010s. 

Back in 2012, Facebook still considered Twitter a threat. With that in mind, the company doubled the offer Twitter made for an upstart photo-sharing platform, paying Kevin Systrom and company $1 billion for Instagram at a time when the buzzword "unicorn" hadn't yet been coined.

It became one of the most lucrative and consequential tech acquisitions of the decade. But if Facebook had any inkling, they didn't tip their hand, casually referring to Instagram as "fun, popular photo-sharing app for mobile devices" in the press release announcing the acquisition.

While Facebook has since been tarnished with ugly press, Instagram has eclipsed its cultural currency — its cross-generational allure and approval rating stands out among social media — and is the propulsive force behind the company's astonishing financial success. It has a billion users and is expected to produce more than $14 billion in revenue in 2019, according to Wall Street projections. 

Yet in the ensuing years, amid wider concerns about the extent of the social network's influence over society, the deal has taken on a new light, drawing criticism and attracting belated regulatory scrutiny for giving Facebook an anticompetitive advantage. 

But in the process we learned that a billion dollars isn't cool. You know what's cool? $600 billion— and a strong antitrust legal defense. 

2013: Michael Dell takes Dell private — $25 billion

Billionaire Michael Dell's gambit to take his personal computer business private in 2013 became one of the most acrimonious deals of the decade, with several long-reverberating impacts. 

After 25 years under the gaze of Wall Street investors — Dell listed publicly in 1988 when its founder was just 23 years old — the PC company had grown stale and was losing ground to more innovative competitors.

To properly reinvigorate the firm and pivot toward enterprise solutions, including a build-out of its private cloud business, Michael Dell felt he needed to liberate the company from the shackles of quarterly earnings pressures.

It wouldn't be easy. Dell dug into his personal fortune and partnered with private-equity shop Silver Lake and a group of lenders to raise nearly $20 billion — other buyout shops including KKR, TPG, and Blackstone kicked the tires but declined to get involved, according to Forbes. 

But some shareholders felt Dell was capitalizing on the beaten-down stock price to carve out a sweetheart deal for himself. Not long after the proposed buyout was announced, Carl Icahn amassed a $1 billion stake and hit the airwaves, sent tweets, and issued open letters to decry the transaction and push for the CEO's ouster. 

After months of fighting, Dell and Silver Lake won out over Icahn, completing at the time the largest post-financial crisis leveraged buyout. That retreat into the safety of private ownership paved the way for Dell's overhaul, as well as the largest tech deal of all time: Dell's $67 billion merger in 2015 with IT giant EMC.

Another byproduct of the deal: A closely watched, precedent-setting ruling in 2016, in which a Delaware court decided Dell had shortchanged shareholders, ordering the company to pay an additional $37 million.

Six years after the saga began, Dell is now back on the public markets, listing on the NYSE a year ago. Michael Dell now has a fortune of more than $30 billion, roughly double what he was worth in 2013 when he took his company private, according to Forbes. 

2014: Actavis buys Allergan — $66 billion

Like Dell's take-private bid, the $66 billion Actavis-Allergan tie-up was another feisty deal involving an ill-tempered activist that held broader implications. 

A couple years before an accounting scandal blew up Valeant Pharmaceuticals— which has since rebranded under the name Bausch Health — the merger-happy drugmaker and Pershing Square Capital billionaire founder Bill Ackman partnered up to make a hostile run at Allergan, the company behind Botox. Valeant had tried and failed to buy Actavis, manufacturer of women's health and skin drugs, in 2013. 

Allergan rebuffed the $50 billion overture, leading to increasingly testy exchanges over several months. That included a move to shake up the board and claims by Valeant and Ackman that Allergan made false statements to regulators  as well as a lawsuit by Allergan alleging its foes engaged in insider trading during their hostile bid. 

But then Actavis, whose CEO Brent Saunders had been quietly sweet-talking Allergan CEO David Pyott behind the scenes, emerged from the wings with a far larger bid, causing Valeant and Ackman to finally admit defeat. 

Actavis-Allergan wasn't just one of the largest pharma deals in a decade rife with industry consolidation, it also represented the culmination and power of the tax-inversion craze that swept across pharmaceuticals in the first half of the 2010s. 

In 2013, Actavis bought a small, Irish drug company, reaping significant tax benefits and setting off a wave of copycat deals (Valeant had actually inverted back in 2010 with a Canadian company). Regulators eventually cracked down on the practice in late 2014, but not before Actavis capitalized on the financial flexibility to buy Forest Laboratories for $25 billion and subsequently orchestrate the Allergan merger. 

2015: Dow Chemical merges with Dow DuPont — $130 billion

In 2015, Dow and DuPont each existed as separate, publicly traded heavyweight chemical companies. Today, they also exist as separate, publicly traded heavyweight chemical companies.

In between, they briefly joined together in a $130 billion merger —  the second-largest in history— combining two brands founded in the 1800s into a giant with $90 billion in revenues and dozens of business lines, ranging from specialty chemicals and agriculture to performance plastics and industrial biosciences. 

This was the plan from the get-go: Combine the two conglomerates, shake up all ingredients, and pour them into three separate, more appetizing tumblers for investors to sip on. 

Alas, merger mixology is more fraught than cocktail mixology, and this would've been one of the most complicated transactions in corporate history even before it attracted unprecedented attention from activist investors with their own thoughts on the proper recipe. 

Both Dow and DuPont were sparring with hedge funds prior to their tie-up. Trian Management started lobbying for a DuPont breakup in 2013, ultimately losing a narrow proxy battle for board seats in early 2015. Third Point began pressing Dow for changes in early 2014, winning a board reconfiguration later that year. 

After DuPont CEO Ellen Kullman retired in October 2015, the two companies opened merger discussions, and by December they announced a deal that hoped to reap $3 billion from cuts.

If the companies thought that would rid them of their meddlesome investors, they were mistaken. As the intricate post-merger carve up unfolded, the number of activists doubled to four. 

By 2017, Glenview Management, Jana Partners, Third Point, and Trian were all criticising the DowDuPont breakup, lobbying for more fat trimming from the component parts. 

The dust has only just begun to settle this year. By June of 2019, DowDuPont had split into three publicly traded entities: Dow, focused on commodity chemicals for silicone, plastics, and paint; DuPont, a manufacturer of specialty chemicals for cars, adhesives, and various consumer goods; and Corteva, a new brand geared toward agricultural products. 

2015: Kraft merges with Heinz — $45 billion

Bigger is not always better. The $45 billion merger of Kraft with Heinz in 2015 was notable for its size — it created one of the world's largest food and packaged goods conglomerates, with $28 billion in revenues— but unfortunately moreso for how poorly it has turned out. 

This deal shows the limits of a merger built on a cut-to-the-bone calculus, and a reminder that the Oracle of Omaha is human. 

In the early 2010s, Warren Buffett's Berkshire Hathaway and Brazilian buyout shop 3G Capital had formed a dealmaking tandem that orchestrated several blockbuster takeovers with strong returns through a fairly straightforward strategy: Acquire a large but bloated brand, cut the fat and find efficiencies, and then expand its reach. Rinse and repeat. 

In 2013, the partners spent $23 billion to buy ketchup king Heinz, and the following year they teamed up to merge Burger King with Canadian coffee and doughnut chain Tim Horton for around $10 billion. 

Then came Kraft-Heinz, a deal that anticipated $1.5 billion in annual cost savings, much of that coming from cuts to the global workforce, which numbered more than 46,000. Just as with the Heinz acquisition, which resulted in hundreds of layoffs, some 2,500 jobs were slashed soon after Kraft-Heinz closed, with thousands more to follow— as well as a deep reduction in R&D spending.

The limits of this strategy began to surface two years later when Buffett and 3G once again tried to roll-up their conglomerate into an even larger deal, with The Kraft Heinz Company bidding $143 billion for consumer goods giant Unilever. Unilever, a company with a radically different culture and philosophy than Buffett and 3G, rebuffed the proposed acquisition from the smaller suitor. 

Very little has gone right for Kraft Heinz since: Slumping sales, a $15 billion write-down to its Kraft and Oscar Mayer brands, an SEC investigation into accounting flaws that prompted the firm to restate years of financial reports, and a stock price that has declined 27% over the course of 2019 and nearly 60% since the merger.  

"The longer-term effects of cost-cutting have caught up to Kraft Heinz," said Harbir Singh, a professor at the University of Pennsylvania's Wharton School, adding that investors are more skeptical now of global megadeals that hinge on draconian cuts that could hamper growth. 

Buffett acknowledged the uncharacteristic miss. 

"I was wrong in a couple of ways about Kraft Heinz," Buffett told CNBC in an interview earlier this year. "We overpaid for Kraft."

2016: AT&T buys Time Warner — $85 billion

As US consumers have shifted away from television sets and cable subscriptions toward mobile devices and streaming content, media and telecom companies have scrambled to keep pace. 

AT&T, amid a price war with other wireless operators, looked to gain leverage, growth, and a content trove through which to win over modern consumers via an $85 billion bid for media giant Time Warner, the film studio and television broadcaster that owns movie franchises like "Harry Potter" and "The Fast and the Furious" as well as assets like HBO and CNN.

The deal provoked a ripple of follow-on acquisitions from competitors, with Disney buying 21st Century Fox for $71 billion in 2017, Comcast purchasing British satellite company Sky for $39 billion in 2018, and CBS linking back up with Viacom just this summer. 

These blockbuster media-telecom tie-ups are reminiscent of a wave of media consolidation in the early aughts, including the $165 billion AOL-Time Warner merger in 2000 — the largest of all time, and generally considered among the worst.

A key difference that makes the math smarter this time around: Executives know a lot more about their customers.

"Given the greater availability of data on subscribers, there's a better understanding of the underlying subscriber value of these platforms and what the consumer is truly willing to pay for this content on these specific platforms," Vito Sperduto, global cohead of M&A at RBC, told Business Insider. "And so I feel better about these combinations."

None of these recent mergers have faced a more arduous path to completion than AT&T-Time Warner, which over a nearly three-year saga withstood a full-frontal antitrust assault from regulators — who argued competition would dwindle and customers would get short shrift — as well as the disapproving glare of President Donald Trump and his voluminous Twitter habits. 

While the Department of Justice asserted no influence from the White House in its lawsuit to block the merger, the president nonetheless trashed the deal, publicly voicing his virulent disdain for CNN and lobbying against the tie-up. 

In February, the DOJ lost its appeal against the merger, ending the legal challenge and clearing the way for AT&T-Time Warner.

That hasn't stopped the abuse from Trump, who this summer called for a boycott of AT&T.

2017: Amazon acquires Whole Foods — $13.7 billion

Few deals sent more tremors, both immediate and far-reaching, through the markets and corporate boardrooms than Amazon's $13.7 billion acquisition of upscale organic grocery chain Whole Foods. 

Almost immediately after Amazon swooped in to buy Whole Foods— which was battling a slumping stock price as well as an activist campaign from Jana Partners —  grocery giants including Kroger, Target, and Walmart saw billions shaved off their market values as investors tried to comprehend the amount of disruption a competitor with Amazon's brute strength and tech savvy could wreak upon the industry. 

While it was the Everything Store's largest ever acquisition, $13.7 billion represented a drop in the bucket for Amazon, which spent roughly twice that amount just in research and development in 2018, according to public filings.

Still, Amazon does not spend frivolously, and it didn't spend billions simply for access to the modest margins from selling produce and granola to well-heeled hippies. The company not only got immediate access to premium real estate locations to further bolster its logistics empire, but also a new source of on-the-ground data and analytics to complement its digital analysis of customer shopping trends and preferences. 

The impact wasn't limited to the grocery business. Even well-established industry stalwarts began to confront the possibility that supercorporations like Amazon could wake up on a given day and upend their industry, shooting some urgency into corporate boards and providing stark evidence that maintaining the status quo was a risky bet.

That contributed to a flurry of other megadeals in the second-half of 2017 and beyond. 

2017: Disney acquires 21st Century Fox — $71 billion

At more than $70 billion, Disney's buyout of 21st Century Fox may be the nearly 100-year-old firm's most towering, but it's the culmination of a vision that began more than a decade earlier and is bearing fruit at the end of the 2010s, as evidenced by the torrent of "Baby Yoda" memes taking over the internet.

The transformation of Netflix from Blockbuster pest with a mail-in DVD service to $150 billion film studio and media platform signaled the rise of the streaming wars. Disney's acquisition of Fox, which survived a $65 billion counterbid from Comcast, signaled its intention not just to do battle with Netflix — as well as Amazon Prime, HBO, and Apple — but to marshal the necessary resources to vanquish the competition. 

Disney, which is trading at all-time highs with a market cap in excess of $260 billion, may be the early favorite, in part thanks to the Fox deal, which supplies its nascent Disney Plus platform a bulging library of movies and television properties, like "The Simpsons,""Deadpool," and "X-Men."

But any success enjoyed by the newly launched Disney Plus may be just as attributable to a series of smaller, shrewd acquisitions that set the stage for the Fox deal. In 2006, Disney acquired Pixar for $7.4 billion. Three years later, it grabbed the Marvel universe for $4 billion, followed by Lucasfilm for another $4 billion in 2012.

While each of these transactions has resulted in smash box-office and merchandising hits — as well as hours of valuable content IP — that success wasn't a foregone conclusion, according to Singh, the Wharton professor.

"You see the building blocks that helped transform Disney," Singh told Business Insider. "These are risky transactions. This is what I find fascinating."

Those deals presaged the Fox acquisition, which isn't without risk itself — the company assumed more than $19 billion in debt to complete it. But Disney may now be better armed than any other media giant to duke it out for streaming subscribers. 

2019: Occidental acquires Anadarko — $38 billion

There's a reason massive deals are rarely interrupted by an outside bidder: The initial acquirer is already paying a premium, so it's expensive. Moreover, the first mover has advantages and, all else being equal, their offer is given preference. 

So, when Chevron, the $150 billion in revenue oil behemoth, agreed in April to pay $33 billion for Anadarko Petroleum, it seemed that was that — especially since a $1 billion breakup fee was at stake. 

But Occidental Petroleum CEO Vicki Hollub had long prized Anadarko, a company of roughly the same size whose fortunes have gushed right alongside the West Texas oil boom. She'd been eyeing up a deal for a couple years, and had been texting and calling with Anadarko CEO Al Walker to hammer out a bid in the days preceding Chevron's offer. 

Occidental moved quickly to derail the bid from Chevron, coming over the top with a $38 billion offer, an 18% premium and one of the largest hostile counter-bids in history. 

However, with far less financial firepower and the Anadarko board more favorable to Chevron, Occidental was still an underdog, and investors expected a counterbid. 

But over the course of a weekend, Hollub flew to Nebraska to secure a strategic edge: A $10 billion cash infusion from Warren Buffett's Berkshire Hathaway, which agreed to buy preferred Occidental shares to help finance the transaction.

This allowed Occidental to increase the cash portion of its offer to nearly 80% — the rest coming in stock — compared with a bid from Chevron comprised of just 25% cash.

"We needed money that would be highly certain," Mark Shafir, who helped orchestrate the deal for Occidental as global cohead of M&A at Citigroup, told Business Insider.

"Where are you going to find $10 billion in a weekend?" he added, in reference to Buffett. "He's arguably the only source in the world you can do that with."

Rather than engage in a bidding war and potentially overpay, in early May Chevron elected to walk away. But it didn't leave empty handed, pocketing the $1 billion breakup fee for its efforts.

Occidental got its prize, but whether the price it paid proves too steep remains to be seen: After the deal closed in August, with Occidental stock taking a dive, Carl Icahn bemoaned the deal as "one of the worst I've ever seen."

• Citigroup plans to hire 2,500 programmers for its trading and investment banking units, Bloomberg reported Monday.
• The move comes amid a shift in the industry as major banks spend more on electronic programs, looking to unlock greater cost efficiencies and introduce new products to clients.
• About 75% of Citi's trades were electronic in 2019, Stuart Riley, global head of operations and technology for the bank's Institutional Clients Group, told Bloomberg.
• Watch Citi trade live here.

Citigroup is looking to hire 2,500 coders for its trading and investment banking units, Bloomberg reported Monday.

The move comes as major banks shift from in-person trading operations to algorithmic programs. About 75% of Citi's trades were electronic in 2019, Stuart Riley, global head of operations and technology for Citi's Institutional Clients Group, told Bloomberg.

The push for programmers reveals "what we are building in technology and why we are focused on making salespeople and traders more effective at servicing our clients," Riley said in an interview with Bloomberg.

"Technology is augmenting what humans do by making better use of data," he added.

Citi allocates about $8.5 billion, or 20% of its budget, to technology every year, according to Bloomberg. JPMorgan Chase and Goldman Sachs have also been hiring more programmers to revamp their trading operations.

Citi's bolstered investment in electronic trading will help drive as much as $600 million in savings in 2020, Bloomberg reported. The firm recently shrank its trading business to meet efficiency goals. Citi's total hires fell to 199,000 by the fourth quarter of 2019, an 18% drop from five years prior.

Citi already used its growing tech team to automate pricing, news, and analytics, Riley told Bloomberg. The newest class of recruits will focus primarily on equities and fixed income projects, bringing data-driven efficiencies to inherently unpredictable businesses.

"The delineation between traders and technologists in markets is disappearing," Riley said.

The sentiment was echoed in September by Goldman Sachs' former trading chief Marty Chavez. The bank's tech guru summarized his time at Goldman as "making money, capital, and risk programmable," adding that traders and engineers won't exist "as two completely different things for long."

Citigroup traded at $79.42 per share at 11:15 a.m. ET Monday, down roughly 0.4% from Friday's closing price.

The bank has 22 "buy" ratings, four "hold" ratings, and one "sell" rating from analysts, with a consensus price target of $86.52, according to Bloomberg data.

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• Bob Hawley, head of BNP Paribas' investment banking operations in the US, is stepping back and taking on a vice chairman role with the firm.  
• Hawley, who also ran global markets in the Americas, had been with the firm since 1997 and was promoted to CEO of Corporate and Institutional Banking in the Americas in mid-2018, amid an organizational shakeup.
• Jose Placido, the global head of financial institution coverage based in London, has been tapped to replace him. 
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The head of BNP Paribas' investment banking operations in the US is stepping down, just a year and a half after taking the role amid an organizational shakeup, according to people familiar with the matter. 

Bob Hawley, a long-time fixed-income markets exec and CEO of Corporate and Institutional Banking in the Americas since mid-2018, will remain with the firm but is stepping back into a vice chairman role with the investment bank, the people said. Jose Placido, the global head of financial institution coverage based in London, has been tapped to replace him. 

A BNP spokesman declined to comment. 

Hawley joined BNP in 1997 from Credit Suisse First Boston, holding several regional fixed-income executive roles in the early 2000s before earning a promotion in 2014 to head of global markets and deputy head of CIB in the Americas, according to a company bio.

He moved up from deputy CEO to the top job in the firm's US investment banking operation four years later amid a broader shakeup, in which Jean-Yves Fillion vacated the bank's top regional investment-banking job but stayed on as chairman as well as CEO of BNP Paribas USA. 

Placido, who joined the firm in 2014 from RBC, is set to inherit the job from Hawley, the people said. His shoes will be filled by Sandrine Ferdane, CEO of the firm's operation in Brazil, sources said.

The power transition is expected to happen over the course of the first six months of the year.

The French investment bank's US business is primarily focused on global markets, providing sales and trading and securities services to clients, though it has also had ambitions to grow its investment-banking advisory business in the region.

The firm has struggled to gain market share in the region and was ranked 12th in investment banking revenues in the Americas in 2018 among the top global firms, according to league tables from industry data and consulting firm Coalition.

Have more information about BNP Paribas? Send an email to the reporter at amorrell@businessinsider.com or reach him via Signal.

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• JPMorgan Chase reported fourth-quarter earnings Tuesday that beat analysts' revenue and profit expectations, reflecting strong gains in its corporate and investment bank and asset and wealth management divisions.
• The bank's shares climbed 1.9% in premarket trading.
• View Business Insider's homepage for more stories.

JPMorgan Chase posted $2.57 in fourth-quarter earnings per share, outpacing the $2.36 figure that Wall Street analysts surveyed by Bloomberg were expecting. Corporate and investment bank revenues jumped 31%, and wealth and asset management revenue climbed 8%.

The bank's shares climbed 1.9% in premarket trading as investors cheered the outperformance and positive outlook by CEO Jamie Dimon.

Here are the key numbers:

• Net income: $8.52 billion versus the $7.54 billion estimate
• Earnings per share: $2.57 versus the $2.36 estimate
• Revenue: $28.3 billion versus the $27.9 billion estimate

"JPMorgan Chase produced strong results in the fourth quarter of 2019, capping off a solid year for the Firm where we achieved many records, including record revenue and net income," Dimon said in the earnings release.

"While we face a continued high level of complex geopolitical issues, global growth stabilized, albeit at a lower level, and resolution of some trade issues helped support client and market activity towards the end of the year," he added.

JPMorgan's net revenue rose 9% to $29.2 billion as a 21% spike in noninterest revenue offset a 2% slide in net interest income due to lower interest rates. Noninterest revenue benefited from higher sales across the bank's fixed income, equity markets, asset and wealth management, home lending, and auto operations.

The corporate and investment bank generated record revenue in the quarter, Dimon said, and its full-year wallet share of investment banking fees hit its highest level in a decade. The division's net revenue jumped 31% to about $9.5 billion and net income soared 48% to $2.9 billion in the quarter. The strong growth reflected an 86% spike in fixed income markets revenue to $3.4 billion and a 15% rise in equity markets revenue to $1.5 billion.

The consumer and community banking division reported higher net revenue and net income due to higher auto lease volumes and an increase in net interest income from its card business.

The asset and wealth management division also grew net revenue and net income, reflecting higher investment valuations and average market levels, as well as deposit and loan growth. It also brought in record long-term net flows of $100 billion in 2019, Dimon said.

The commercial banking segment earned a record $2.7 billion of investment banking revenue in 2019, Dimon said. However, it registered declines in both net revenue and net income in the fourth quarter as lower deposit margins hurt net interest income.

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• Barclays is planning to hire double-digit numbers of managing directors to expand its investment bank in 2020.
• The bank improved its dealmaking market share in the US in 2019 and global banking head Joe McGrath has internally expressed ambitions to further bolster its platform. 
• Global executive search firm Heidrick & Struggles is understood to have landed a mandate to recruit senior bankers for the firm, with several searches already underway. 
• Hiring ambitions by Barclays and UBS may signal another fiercely competitive year for senior investment bankers.
• Visit Business Insider's homepage for more stories.

Barclays has hatched plans to hire double-digit numbers of senior investment bankers this year as it looks to further expand its share of the US investment-banking fee pool. 

The British bank clawed back dealmaking market share from rivals in 2019, and global banking head Joe McGrath has recently spoken internally about the firm's ambitions to capitalize on the momentum and expand its investment banking platform, one insider said.

As part of the plans, Barclays is targeting at least 10 to 12 managing director-level hires to bolster underperforming coverage areas, according to people familiar with the strategy.

The plan and the precise number of hires is flexible, sources said, but global executive search firm Heidrick & Struggles is understood to have landed a mandate to recruit senior bankers for the firm, with several searches already underway. 

Representatives for Barclays and Heidrick declined to comment. 

Barclays hired 10 investment banking MDs in the Americas region in 2019, according to industry reports from Wall Street recruiting and consulting firms. On the flipside, nearly 20 MDs departed the firm last year, including a cadre of financial institutions bankers. 

The bank's focus last year was hiring for its technology-banking practice, according to a source familiar with its strategy, but its 2020 push will target hires across sectors. The hires will primarily focus on the US market, the largest investment-banking fee pool in the world.

Barclays improved its US dealmaking market share in 2019, rising one spot to 5th in investment-banking fees while improving its market share to 5.7%, up from 5.4% in 2018, according to Dealogic. In US mergers and acquisitions, the bank held steady in 5th place but improved its share to 5.3%, up from 4.9% in 2018. 

It remains to be seen whether Barclays' ability to attract top-flight bankers will be impacted by cuts to the investment bank's 2019 bonus pool amid the firm's efforts to reach return-on-equity goals mandated by CEO Jes Staley.

Barclays' plans follow the news that UBS is aiming to add 20 MD-level dealmakers, with a focus in the US, over the next two to three years, according to Bloomberg. UBS brought aboard 20 senior-level investment bankers in the US in 2019, according to the reports from recruiting and consulting firms.

The hiring ambitions of two of the top European banks may signal another fiercely competitive year for senior investment bankers.

With new leadership gripping the reins at top investment banks, turmoil enveloping others, and a still scorching dealmaking environment, a vigorous appetite in the US for top rainmakers has become a constant over the past two years. 

SEE ALSO: Barclays insiders say a hiring freeze is afoot as roles stay unfilled, bonuses get slashed, and senior staff flee

SEE ALSO: Barclays has lost a quintet of FIG bankers over the past month — and it shows how Jes Staley's bonus cuts may be affecting morale

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• Credit Suisse is overhauling its bonus structure for its struggling investment banking and capital markets division, and instituting stiff clawback penalties. 
• Under the new plan, cash bonuses will be paid in the form of an "upfront cash award," which in practice functions like a three-year, interest-free loan. Employees who leave early will have to pay back compensation.
• The bank, which is set to announce bonuses February 11, is requiring employees to sign an agreement accepting the new terms.
• The new terms come amid a bombshell announcement on Friday that CEO Tidjane Thiam will leave the firm following a spying scandal. 
• The 2019 bonus pool for the dealmaking unit is expected to fall by as much as 25%, two industry sources told Business Insider 
• Visit Business Insider's homepage for more stories.

Credit Suisse is overhauling its bonus structure for its struggling investment banking and capital markets division, imposing financial penalties that will make it more financially onerous for higher-earning bankers to depart for rivals.

The firm on Wednesday finalized a new compensation plan for its dealmaking group, including a provision requiring the cash portion of a bonus to paid in the form of an "upfront cash award" with stiff clawback provisions, according to people familiar with the plans. 

The new terms come amid a bombshell announcement on Friday that CEO Tidjane Thiam will leave the firm following a spying scandal. Thomas Gottstein, the current head of Credit Suisse's Switzerland division, will take over as CEO. 

The payment in practice is akin to a three-year, interest-free loan, and bankers who leave or are fired for cause within three years of earning a cash award will have to pay back the remaining term portion based on the pre-tax amount. It doesn't apply to junior investment banking ranks, the sources said. 

Like most Wall Street firms, Credit Suisse pays its top earners partially in cash and partially in deferred stock that vests over several years — with the highest earners drawing more of their bonus in equity.

Under the new plan, which only affects higher earners in the Investment Banking and Capital Markets division, Credit Suisse will pay the cash portion via an upfront cash award, essentially a forgivable loan that vests monthly over the course of 36 months, the people said. For instance, an employee who received a bonus and resigned 12 months later would be required to pay back two-thirds of the awarded money, based on the pre-tax amount. 

A Credit Suisse spokesman declined to comment. 

Bonuses, which are considered supplemental income, are taxed at a higher rate in the US than a traditional salary. 

The stock portion will remain on a three-year vesting schedule. 

The bank, which is scheduled to communicate 2019 compensation to staff on February 11, is requiring employees to sign an agreement accepting the new terms, or otherwise forego the cash portion of their bonus, the people said. 

While atypical, a compensation plan with such clawback penalties isn't unprecedented, even within Credit Suisse. The firm last year implemented a similar compensation plan among senior bankers in its Asia-Pacific division. 

Jefferies is also known to impose stiff clawback provisions on employee compensation. 

The more restrictive bonus system is the latest blow for Credit Suisse's beleaguered dealmaking division, which has underperformed the rest of the firm. Credit Suisse in 2019 fell to the 7th from 6th on the global investment banking fee league table, as its market share decreased to 3.8% from 4.3%, according to Dealogic. 

In November, Thiam appointed David Miller as the head of the investment banking and capital markets group, replacing Jim Amine. 

The Financial Times reported last week that the Swiss bank had frozen its overall bonus pool for the second year running, as gains in sales and trading were offset by lackluster performance in advisory and capital markets. 

Two industry sources told Business Insider the bonus pool for the dealmaking unit was expected to fall by as much as 25%. 

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• JPMorgan's head of investment banking, Carlos Hernandez, is now the executive chairman of investment banking, according to a JPMorgan memo viewed by Business Insider.
• New co-heads Jim Casey and Vis Raghavan will take on day-to-day management responsibility for the firm's investment banking arm, reporting to Hernandez.
• Hernandez will lead a new committee of global chairs of the investment bank's various business lines. The committee will be focused on managing relationships with the firm's top clients.
• This top-level shakeup left several open seats to lead different businesses within the investment banking arm.
• Here's a look at the new cohort of execs leading M&A, equity, and debt capital markets for JPMorgan's investment bank.
• Click here for more BI Prime stories.

For a banker, cinching a managing director title is a milestone, but the climb doesn't stop there.

To keep senior leaders interested, Wall Street firms can keep offering promotions, which also helps to make sure rising stars don't get stuck behind long-serving execs.

JPMorgan has elevated a new wave of senior bankers in its investment banking arm to a new leadership group — the executive committee of global chairs. The shakeup was first reported by Reuters.

Execs, many of whom were regional and product heads, will join the committee which will be led by executive chairman Carlos Hernandez, who until now was head of global investment banking.

While the global chair title isn't new, the committee is.

Members of the committee will be tasked with relationship management of the firms top clients as well as bringing in new business — "rainmakers," in industry lingo. Committee members will be handing over day-to-day management to the next crop of business leaders.

Across Wall Street, firms are establishing relationship-focused committees and working groups, hoping to cross-sell different business units — like investment banking and wealth management — to clients in a hyper-competitive industry.

For example, last year JPMorgan hired four Silicon Valley Bank execs to form a VC client coverage group  housed in its commercial bank that would find ways to offer services across the bank's investment banking, wealth management, and asset management arms to drive more business.

Goldman Sachs has employed a similar strategy across its divisions. The bank's investment banking arm took Spotify public in 2018, and now counts several current and former Spotify execs as wealth management clients.

Hernandez will hand over the reins as JPMorgan's global head of investment banking to newly appointed co-heads Jim Casey and Vis Raghavan.

With more than 30 years at the investment bank, Hernandez will continue to oversee the investment banking arm. Both Casey and Raghavan will report directly to Hernandez.

And other appointments to the executive committee left some open spots across investment banking leadership.

Here's a look at the committee members and the newly promoted execs leading JPMorgan's M&A, debt, and equity capital markets businesses, according to a JPMorgan memo viewed by Business Insider. 

Who's on the new executive committee of global chairs

Ben Berinstein*

Andy Cohen (currently an executive chairman of wealth management for JPMorgan, Cohen is joining the investment banking executive committee as part of the firm push to connect different arms of business)

Hernan Cristerna*

Mark Feldman*

Steven Frank

John Gammage*

Jamie Grant

Harry Hampson*

Lawrence Henry*

Robbie Huffines

Larry Landry

Liz Myers*

Jennifer Nason

Isabelle Sellier

Eric Stein*

Chris Ventresca*

Kevin Willsey

Noah Wintroub*

*Newly appointed global chair

Jim Casey and Vis Raghavan, new co-heads of global investment banking

Casey, who was global head of debt capital markets, the division that helps investment banking clients raise money by issuing bonds, for example, will be succeeded by Kevin Foley. Casey joined JPMorgan as an MD, taking over the bank's corporate debt business in 2012.

Raghavan, CEO of JPMorgan's EMEA business and head of banking for EMEA, joined the bank in 2000 from Lehman Brothers. Raghavan will keep his EMEA CEO role, for which he is tasked with ensuring the bank's clients have seamless experiences across countries in the region. 

His role as head of banking in EMEA will be filled by new co-heads Dorothee Blessing and Conor Hillery.

Here are the new regional and product execs, who will report to Casey and Raghavan.

Investment banking regional leadership

Filippo Gori, head of banking for Asia Pacific

Dorothee Blessing and Conor Hillerr, co-heads of EMEA investment banking*

Martin Marron, head of Latin America investment banking

Fernando Rivas, head of North America investment banking*

Investment banking product leadership

Kevin Foley, head of global debt capital markets*

Huw Richards, global head of digital investment banking

Achintya Mangla and Mike Millman, co-heads of global equity capital markets*

Andy O'Brien, head of global loan capital strategy

Anu Aiyengar and Dirk Albersmeier, new co-heads of global mergers & acquisitions*

*New appointment

SEE ALSO: Top tech banker Noah Wintroub is at the center of WeWork's failed IPO. We talked to insiders to learn more about his meteoric rise at JPMorgan.

SEE ALSO: The Rainmakers: Meet the top 20 bankers that orchestrated the biggest deals of 2019 and nabbed huge paydays along the way

SEE ALSO: JPMorgan and UBS private wealth execs explain why they're doing more private share-backed lending to Silicon Valley. Both banks have lent to WeWork CEO Adam Neumann.

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