Lincoln International’s new CEO explains how he nearly tripled M&A costs: “This year was not just an anomaly”

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Rob Brown has been the head of mid-sized investment bank Lincoln International for two months, the first new CEO since its inception 25 years ago.

But he’s not about to tear up his playbook and unveil a drastic new strategy.

Brown is a 23-year banking veteran, starting when there were “seven of us sitting around a conference table”. He stayed on board as it now has around 700 bankers around the world, mainly advising private equity firms on transactions.

Yet he’s still pursued changes since taking over as CEO of Chicago-based bank co-founders Jim Lawson and Rob Barr in October.

Lincoln is poised to enter a new business – advising financial institutions in the United States and Europe – and is launching a new team of GP Secondaries advisors as part of a larger expansion of the company. For years, the bank has focused on six key sectors, but Brown has said it aims to take market share from rivals.

Lincoln raked in $ 134.2 million in M&A fees in 2021, according to data provider Dealogic, up from $ 47.3 million last year. That’s a 184% gain. He also hired 150 dealmakers this year.

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The bank is focused on advising private equity firms, with financial sponsor fees surpassing a record $ 26 billion in 2021 as buyout firms drew on their vast pools of dry powder.

“We have made big investments in people and the overall goal is to show that this year was not just a peak, or an anomaly, as a number of agreements delayed by Covid have been made this year,” Brown said. “We’ve taken market share, really focused on investing in people, and there’s still a lot of private capital to deploy, so we’re heading into 2022 with optimism.”

Brown said Lincoln’s “secret sauce” is his culture; a common line deployed by bank managers seeking to attract talent.

However, the bank has a 90-page Lincoln Culture PowerPoint presentation that is used to train new hires, and about half of the bonus payouts are calculated by softer metrics, including rankings based on a interdivisional collaboration.

As CEO, Brown also retains responsibility for recruiting CEOs and said his bankers have more freedom than his competitors.

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“We don’t micromanage. In a culture of micromanagement, your best and most creative people leave and mediocrity rises to the top. You have to give freedom to the right people and they will stay and function well, ”he said.

Brown said 90% of Lincoln’s bankers had worked for the company for more than 10 years and half of its general managers were internal promotions. He maintains that even during the current dealmaker recruiting boom, turnover remains low.

“It’s the most competitive market for talent I’ve ever seen,” he said. “When Covid first hit and the market came to a halt, it felt like it could be a long, cold winter. Some of our competitors laid off bankers, but we decided to keep our talent, which served us well as the market returned in the second and third quarters.

“It has created incredible loyalty with our people. If you don’t have the right culture, people will leave for a few bucks more.

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In the battle for junior bankers, as well as for a pay rise, Lincoln is offering its analysts who move up to associate level a six-week sabbatical to “recharge” and has distributed $ 1,000 for “health and wellness” activities. be ”this year. He also keeps track of analyst and associate hours, and if they register too many, Brown said it gets his attention.

“We paid our analyst bonuses in the middle of the year this year, and I’m sure given the current battle for talent, some could have gone for a higher salary. The competition for talent has been intense, but we’re happy with our retention and our ability to recruit great people, ”said Brown.

To contact the author of this story with comments or news, email Paul Clarke


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