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Kitno


Total Posts: 373
Joined: Mar 2005
 
Posted: 2019-03-16 02:35
Do any of you watch the PSI teams in the banks? It's quite fascinating especially when you follow the politics.

In the old days (pre-crisis) it seemed to be GS, JPM, ML, DB, Barclays, maybe CS who led the charge on instigating consortia and investments. UBS, BNP, Citi, HSBC would follow.

These days GS is the only show in town and everyone else follows. JPM, BAML and Citi has some power when acting in concert but they are in effect tier-2 to GS. The old guard Europeans really seem to be lower tier-2 in their activity.

Furthermore we seem to now have:
PSI
Bank Corporate VCs (CVCs)
Tech Labs

The CVCs are generally out to make P&L and are agnostic to the politics of PSI, while tech labs at best are sandpits to see what's out there. I've never, ever seen anything credible or intelligent come out of a tech lab.

Most of the PSI people are utterly cretinous buying into what they want the world to be as opposed to what it can be...

"Yeh, after that blow out I bid the bonds at 76 and you hit man...You're 77/81 now? Cool man...What? Do I care at 80? No mate... I'm 73 bid now...I'm sure you didn't just load up just for me...".

Sam_Cake


Total Posts: 1
Joined: Dec 2018
 
Posted: 2019-03-16 05:11
Hi Kitno, I was discussing this with my dad recently and he was explaining to me that the banks did this in the past in order to "create" more companies which they could then IPO. I believe the goal was to make money through IPO transaction fee.

If you don't mind me asking, what sparked your interest in PSI's?

Kitno


Total Posts: 373
Joined: Mar 2005
 
Posted: 2019-03-16 13:17
No. These teams exist to provide funding for companies that fulfill an actual or perceived need by the bank(s) often linked to equity or fixed income electronification. These needs were often niche so there was nowhere else to go for funding.

This thread was more about the politics and how their function has changed however. The politics is far strong/more important than their intended function it would seem these days...

"Yeh, after that blow out I bid the bonds at 76 and you hit man...You're 77/81 now? Cool man...What? Do I care at 80? No mate... I'm 73 bid now...I'm sure you didn't just load up just for me...".

nikol


Total Posts: 676
Joined: Jun 2005
 
Posted: 2019-03-16 17:03
My observation is that politics is linked to the deficiency of pricing models, especially estimation of funding cost, proper product cost policy and to poor tooling supporting clear strategy.

Often, those who block further introduction and development/improvement of such tools and express disbelief into any rational decision framework are the loudest politicians.

HitmanH


Total Posts: 476
Joined: Apr 2005
 
Posted: 2019-03-19 02:17
Kitno
Drop me an email on this please, I've got some color you may find interesting
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