Guillaume Mallen, VP of Lazard
Can you introduce yourself?
I went to business school preparatory classes without having a clear idea of what I wanted to do next. And it is a bit of a coincidence that I ended up in this business: a teacher made me want to discover corporate finance and investment banking. I was attracted, above all, by the all-round nature of the job, which requires solid analytical skills, but also makes it possible to reflect on rather broad strategic issues, at crucial moments in the life of companies. I, therefore, began with a 6-month internship in investment banking, at BNP Paribas, which I then joined as an M&A analyst right after graduation. A few years later, I wanted to discover what it meant to work in an independent financial advisory firm, with a different approach, and that's how I arrived at Lazard.
So what is different between the two approaches?
Lazard is not a balance sheet bank: the only thing we offer our clients is advice; we thus have to differentiate ourselves, and that is for me what makes the model so powerful. In major investment banks, financing activities are an important part of the business. These institutions have a leverage on their clients insofar as, since they finance them, they get more easily an advisory role on M&A transactions, while Lazard must come with more original ideas and with a real differentiating angle to be retained. This independent advisory model, free from any conflict of interest, is particularly valued by our clients – ever since the subprime crisis, we have seen an increase in the market share of independent banks versus integrated banks. We have a lot to offer; the quality of our advice and the absence of conflict of interest make it possible to establish a strong relationship of trust over the long term with our clients.
To get back to the start of your career - did you feel any gap between your education and your first experiences?
Business schools offer good training for these types of profession. There is a minimum technical background that is required at the analyst level, but technical knowledge alone isn’t enough. The rest is only learned through experience, by working on real-life transactions. The second thing is that the nature of the job evolves a lot over the years. When you start as an analyst, you are mainly focusing on execution, working on financial models, valuation, preparing presentations for clients, but the more you grow in this business, the more you develop a commercial skill-set, and by the time you become a managing director, your job is to win new mandates and new clients, spending less time on the execution side. The qualities that are required of an analyst are obviously not the same as those of a managing director and there is a whole evolution that takes place between a rather technical work when you start towards a more commercial work when you grow in the organization.
What appealed to you in this job?
It's a very diversified job. No two situations are alike, so there is no routine. What you may also be looking for when you start a career in investment banking is the very fast learning curve, which makes it possible to progress quickly and to be exposed early in your career to a wide array of situations.
Can you present your role more specifically?
I am a Vice President in the generalist M&A team. I have about ten years of experience in M&A. At this level of experience, your role is to be the linchpin and the main contact for your clients on each deal. On live projects, I coordinate the day-to-day work of the team, which generally consists of two to three juniors, and my role is to make sure that the deal moves forward, in a given timetable, that we anticipate client requests and provide the right analyses at the right time. In a typical day, much of the time is spent on the execution of live mandates. And around a third of my time is spent on marketing work, developing either new clients or new situations for existing clients.
In concrete terms, how does a project team work at Lazard?
We follow a very tailored approach. We do not operate in silos like in many banks, where each team is specialized and distinct from the others. Within the firm, it's a great opportunity to work with different people. When advising a company on an acquisition, we need to work as quickly as possible and in a short timeframe, while maintaining a strict confidentiality, and therefore we usually work as "commando team". The project teams are very small teams: we are often five or six people working on transactions of sometimes several billions of euros, which is less the case in large bulge bracket banks that are more structured and often involve many specialized teams between Paris, London and New York. One of the things that our clients value most is having a few trusted interlocutors who master all aspects of a transaction from A to Z. The trust of our clients is something critical for us, and being trusted is the reason that makes them turn to us.
What added value does Lazard bring to your clients?
For our clients, M&A transactions often have strong implications, especially when they are transforming. They help accelerate the growth of the company and conquer new markets. Getting the best advice is crucial to maximize chances of success. Even our most sophisticated clients, who are equipped with in-house M&A teams, also need advice for their most strategic deals. Lazard's model is based on quality of advice, commitment to our clients, intellectual capital, and discretion. To differentiate ourselves, we must provide our clients with the entire network and the full range of advice that Lazard can offer.
How are Lazard's customer relationships built?
At Lazard, we are fortunate to be able to work with many blue chip clients with whom we have a very close relationship. I am not only referring to CAC 40 companies but also to a number of other large French or foreign groups. This proximity and this relationship of trust that have been built over time allow us to work on large transactions. Some clients reach out to us very regularly: if they have been well advised and well accompanied in the past, they come back to us and they are looking for this trust, proximity, excellence in execution and quality of advice that they may not find elsewhere. Lazard is one of the pioneers who invented the M&A advisory business. What also makes one of Lazard's strengths is all this accumulated experience, having worked on all these transactions for decades: there is a know-how that is a bit unique and that you cannot easily find elsewhere. Our legitimacy is also due to our long years of experience in this market and our history. We strive to cultivate this excellence and the quality of advice
that are at the heart of our DNA.
So this relationship of trust is something you build especially with your French clients?
Our model used to be transatlantic and has become completely global. There are more and more cross-border deals. So we have both the independent advisory model that is typical of an M&A boutique, and a global presence, with a very strong network in 27 countries: we cover all major financial centers and we are very strong in the United States for example. We also have in France great national champions who are a driving force for internationalization: some of our clients have a global footprint and therefore we are naturally called upon to accompany them on their operations abroad, which require specific skills, such as, for instance, local knowledge of stock exchange law in certain geographies. Proximity to the target company also plays a role: we can help connect the buyer and the seller. We are in the front line, and we assist our clients in negotiations.
Relying on local teams is very valuable for cross-border deals. Lazard has teams in 43 cities in 27 countries, in all key M&A markets. When you work in the Paris office, you may also have to travel abroad occasionally on specific deals. There are also longer secondment opportunities for people who wish to spend a year or two in another Lazard office abroad.
Is this specific to Lazard?
What is specific about us is that most major banks have offices in London and New York and smaller offices in other markets. Lazard, on the other hand, has a real local presence. Within the universe of independent advisory firms, it is also the most international bank. On the independent consulting model, it is the most international bank that is independent. If we look at transactions advertised on behalf of French clients in 2018, Lazard is ranked number one among corporate banks..
What is the ideal profile for a young banker?
We seek above all well-rounded and balanced profiles, with strong intellectual curiosity, analytical skills, fluency with numbers, but also good verbal and written expression skills. For analyst positions, we require a mastery of technical skills in corporate finance, especially when it comes to valuation methods. Then, above all, you need a good dose of motivation, a desire to learn, and an ability to evolve and progress in an environment where you are not "over-managed". Lazard makes it possible to have very quickly a lot of autonomy and responsibilities, but it is necessary to be very adaptable!
What advice would you give to students interested in Investment banking?
I have only one piece of advice for them: come and try, whether you have already graduated or not. It is a job that offers many opportunities, that has a lot of appeal as well as a few drawbacks, but which, in my opinion, must be experienced to the fullest. It brings you multiple skills, technical know-how and business acumen, that can serve you no matter what you do later. There are people who may choose to work in investment banking for a few years before moving on to something else, it is of course possible. Personally, I find that it is a fulfilling environment. To succeed, you have to have some drive for effort and keep in mind that it is not a sprint, but a marathon!