Moelis sees deal advisers dodging robot threats faced by traders
(Bloomberg) -- Wall Street veteran Ken Moelis said deal advisers should be able to weather the threat that robotics and artificial intelligence pose for traders and asset managers.
“If you’re sitting on a large trading floor, large balance sheet or large retail business, then you’re in trouble,” the Moelis & Co. founder and chief executive officer said Thursday at a briefing in London.
Jobs in the banking and investing sectors, because of their troves of data, are most at risk, he said. The uniqueness of relationships, judgment and experience mean advisers for mergers and acquisitions and initial public offerings won’t likely be replaced by robots “within my lifetime,” said Moelis, 59, whose firm has advised Huntsman Corp. on its $7 billion takeover by Clariant AG.
Wall Street’s biggest firms are relying on machine learning and cloud computing to automate their operations, forcing many employees to adapt or find new positions. Technological advances could eliminate some 30 percent of banking jobs within five years, Vikram Pandit, who ran Citigroup Inc. during the financial crisis, said Wednesday in an interview.
Technology is playing an increasingly important role when advising clients from sectors ranging from industrials to health care to retail and consumer, Moelis said. Executives across the board are looking to software to cut costs and boost profit margins, so Moelis rarely holds a meeting without technology experts in the room, he said. As a result, the boutique firm continues to hire bankers in the field.
Moelis, whose competitors include Evercore Inc., Lazard Ltd. and Greenhill & Co., will continue investing in selective hiring -- on average about seven to eight managing directors a year -- and internal training rather than buying other advisory firms, the banker said.
“We get shown everything,” but the assets are often overpriced and the firm has remained free of debt and goodwill, said Mark Aedy, head of Europe, the Middle East and Africa at Moelis. “So why not get the individual.”
Moelis is winning new clients and benefiting from the challenges faced by European banks, Ken Moelis said, declining to identify specific firms.
Deutsche Bank AG, UBS Group AG and Credit Suisse Group AG have been forced to cut costs and exit certain businesses amid both regulatory and legal challenges stemming from the financial crisis.
Moelis worked at UBS before starting his namesake firm in 2007 amid the financial crisis, before its 2014 IPO. The firm’s market value is currently $2.69 billion.
Moelis is ranked no. 13 in M&A so far this year, according to data compiled by Bloomberg. The New York-based firm has won some high-profile mandates including the planned IPO of Saudi Arabian Oil Co., which may be the largest-ever listing, people familiar have previously said. Moelis is also advising Abu Dhabi National Oil Co., the state-owned oil explorer, on various strategic options including the potential listing of units as well as partnerships.