Banking on Relationships
Jonathan Knee (UNI''81) Tells the Tale of the Rise and Fall of the Glory Days of Investment Banking
By Taylor McNeil
Jonathan Knee''s first experience in investment banking certainly wasn''t auspicious. While working on an M.B.A. at Stanford, he had a summer internship at Bankers Trust in London, highlighted by a frantic push to compile information on the British chicken processing industry. The whole experience was hardly inspiring, and Knee (UNI''81) finished the summer knowing that this was not what he wanted to do the rest of his life. Knee tells this story in The Accidental Investment Banker, recently published by Oxford University Press, as a joke on himself. That''s because a few years later a friend called with an offer to join Goldman, Sachs as an investment banker in London. Knee, then on the verge of unemployment, accepted, and this time began to see a future for himself. He specialized in media mergers and acquisitions and worked a few mega-mergers. Granted, the work was often about sales — pitching yourself as the key advisor a potential client needed, preferably on deals in the multibillion-dollar range — but it offered something more, a way to influence high-level corporate decision makers. (It was also lucrative: with only a few years'' experience, investment bankers were making seven figures.)
Riding the Internet boom and bust, now in New York and moving from Goldman, Sachs to Morgan Stanley, Knee saw investment banking complete its transformation from gentlemanly backroom advising to hardball finance leavened with dubious ethics — and that''s what his book is really about. "My idea was to tell a history of investment banking that would be accessible to a general audience but still meaningful to a specialist audience," he says. "The hook is to look at changes going on structurally in the industry and see how the Internet boom and bust accelerated those changes over a relatively short period."
Jonathan Knee (UNI'81)
Told from an insider''s point of view, the book paints some not very flattering portraits of key players in the banking world, their names still resonating from long-gone newspaper headlines. Still, despite its sometimes chatty nature, the book is more history than tell-all. "It really struck me how little people both in the industry and outside it understand what investment bankers do, but more broadly, how the industry came to be what it is," he says. "Chances are most investment bankers now, who have only been in the business for three to five years, assume it''s always been the way it is now." It hasn''t, and Knee rues the transformation. Others who have been in the business agree with him, he says. "The feedback I''ve gotten has been overwhelmingly positive."
Knee ended up leaving Morgan Stanley for a boutique firm that only advises clients, eliminating potential conflicts of interest. "That''s the part of the job I love," he says, "and the only part of the job I was ever interested in doing."