What 2022 spells for investment banking, corporate culture, and aspirational analysts

ANNOUNCER: Welcome to Viewpoint, a TD Securities podcast. Listen in as we draw perspectives from a variety of thought leaders on key themes influencing markets, industries, and the global economy today. We hope you enjoy this episode.

PETER HAYNES: Welcome to episode six of Viewpoint, the TD securities podcast where we explore trends in capital markets. My name is Peter Haynes and I'll be your host for today's episode, and I'm joined by Robbie Pryde, head of corporate and investment banking at TD Securities. Thanks for joining us, Robbie, and I hope you had a safe holiday season.

ROBBIE PRYDE: Peter, good to hear you and shame we're not doing this in person, but yes we continue in our pandemic ways. But had a nice break, come back, it's really busy. And I appreciate you having me on your podcast.

PETER HAYNES: Well, Robbie, I've known you for a long time I have the fortune of working for you for 15 years when you were running the equities division at TD Securities. But you took over the Investment Banking Group in 2016. How is TD's investment banking offering change in the time that you've been in charge?

ROBBIE PRYDE: When I took on the new role I was very thankful for what I walked into, which was a very good investment bank that really had great leaders. And a very senior leadership group from my previous role in global equities, but had not worked side by side with day by day, and I'm very thankful that that group was as good as advertised. So that was a good start for me. And it's been a great five years. So I've really enjoyed my time, and I think we've made a lot of progress. Things like our M&A platform has continued to excel. In this past year alone, in 2021, it was really, really busy. We advised in some of the largest and most strategic deals in the Canadian markets, and those include such mega-deals as the Rogers Shaw, Nico, Kirkland, Lake, and then Cenovus and Husky earlier in the year. And that was just the 2021 alone, so a really, really busy year in M&A. And over the time we've also been growing rapidly in the US. And we've been working on things like enhancing our leverage finance platform, and then deepening the sector coverage across all our hubs, from New York and Houston. Many verticals that we had going in the last five years have really enhanced those verticals, and then we brought on some new ones as well. And then our product groups, like debt capital markets and equity capital markets, while always strong, have really strengthened in the last five years as we've been hiring people and expanding our capabilities. So that's serving in North America, but globally as well. And then I think what I'm most proud of, Peter, is just the strengthening of our culture and that partnership spirit, that entrepreneurial mindset that we have. And we're growth oriented, but we don't forget where we've come from, what our roots are. And at the end of the day, we're just really paid to be trusted advisors to our clients. In order to get the right advice and the best advice to your clients, well, it's important that you've got the right team in place. You have the right team, and an ambitious team, and a motivated team to treat your colleagues right. And that's where that partnership piece really comes in. This past September, we announced Bob Dorrance's transition to chairman of TD Securities, and the appointment of Riaz Ahmed as president and CEO of TD Securities. So we had the luxury of Bob's partnership for 21 years at TD Securities, and most of those as is our president and CEO. And then his 40 plus years in the business, so we were able to achieve a lot of things, movement forward by the dealer and many, many deals under Bob's stewardship. But I'm equally looking forward to the next evolution of the business, working together closely with Riaz. And then lastly, it's important that we have a great partnership with our global markets partners, with the sales and trading group, et cetera, so the other side of the dealer. That partnership is really key and paramount to a holistic client experience, and I'm really grateful that as a dealer we have this really strong relationship across all aspects of the deal, including with our infrastructure group. So all in all, Peter, I'm really energized and inspired by all the ambitions we have. As you know, we have what we call our playbook, which is our five year strategy that we unveiled about 12 months ago. Our execution of it thus far has been terrific. So it's paving the runway nicely for the next two, three, four, or five years for CIB and TD Securities.

PETER HAYNES: Yeah, I want to talk a little bit about what the outlook looks for 2022, specifically we had a great year in capital markets. We all know the music is going to stop, and maybe it's because the Fed stops tapering or they take their support out of the market or a combination of all of those factors around rates and inflation. As you're talking to CEOs across Canada and the US, what's the mood of these executives going into 2022, and does it really matter where they're located geographically or which industry they are in?

ROBBIE PRYDE: Generally, the corporates are optimistic, and I would say cautiously optimistic, because it's been a pretty long run. And rates will tick higher in 2022, that's clearly what's going to happen. But I don't think that's really changing the mindset. The markets are not as easy as they were, say, a year ago or so. A little bit more volatility, but I would say that because it's always difficult to predict market moves and trends can change very quickly, especially in this day and age, and it can lead to slowdowns and lack of activity. But that's not what we're seeing right now. We're seeing cautious optimism. At the start of the pandemic, we saw just a load of pre-funding activity going on, bond issuance is very happy that equity issuance followed up. And I would say that balance sheets are as strong as I've ever seen them in my career, and they're ready for deployment. So we've seen big M&A activity, and we'll continue to see big M&A activity. We may not be able to repeat last year, year in year out in Canada, but it was a pretty special year and that's not regularly repeated. But it's certainly shaping up to be a good M&A year again. And then I'd say both sides of the border, I don't think it really matters. I'd say it's maybe just a bit more aggressive terms down in the US, but a lot of our Canadian clients are down in the US or in Europe or Asia doing deals, especially our pension funds and sponsors. But there's still discipline around what's going on in the marketplace. Yes, we're probably stretching versus where we were, but deals are still getting done and banks are still opening up their balance sheets for those deals. And then sectors rotate in and out of favor. All in all, I would say that the mood is pretty good. Other things to talk about. I would say is that it's not all about just being there for the moment. You want to just offer good long term strategic advice and be ready to tap the market when the opportunity arises. So that's the type of advice we like to give our clients, is we're there as your strategic advisor on the way through. If the markets aren't prepared for you at this particular moment, well, we'll wait for the right time, and we'll be opportunistic when we have to be. So we're coming off a really positive year for the industry. And I'd say 2022 is looking pretty good. And I would say that's generally the mood, but it's more cautious this year than last year, I would say, Peter.

PETER HAYNES: I'm going to take a step back here, Robbie, and just think a little bit about if I was a student coming out of university right now, let's say I'm in commerce or I'm in engineering, and I'm looking on the internet for a job. And I'm reading about the securities industry, I'm going to read a lot about ink spilled in the past couple of years over work life balance in the investment banking space, which really came to a head in the midst of the pandemic on Wall Street. How are you helping the new recruits to manage their work life balance?

ROBBIE PRYDE: Well, it certainly became quite topical. The press ran with it for quite some time, but I would say that the challenges of the industry have always been there. I think they were heightened and became much more visible during the, especially the early parts of the pandemic, for various reasons. So I think overall, investment banking is a challenging environment, and always has been and always will be. Hours can be long, and they can be unpredictable when you're in deal mode. And that's just characteristic of what I would call our industry. It's intense, fast paced, and where clients are involved, and clients having demands. And that's been the draw for smart, young professionals that are looking for that type of experience and looking for bigger challenges, looking to be compensated very well early in your careers, and essentially, accelerating your career. So investment banking is not for everyone. And the first year or two does help solidify whether a person is made for investment banking or not. So we do have a little attrition that it does happen industry wide. However, COVID, the prolonged work from home experience that we're going through, has definitely exacerbated the challenges of investment banking, and that's really on two fronts. First of all, we've been busy. There's record deal volumes. That's partly due to pent up demand from COVID. There's a lot of liquidity in the system and a lot of activity that's come out the other side. So we're super busy. And then point two is just the work from home and that isolation on lockdown or working from home. So your social activities and connections suffered for sure. And if you're new to the business, and came in in the last two years, well it's doubly difficult because you haven't had that side by side work in a team experience, and all those impromptu questions and tapping on the shoulder in the office. I think that's been really difficult for people. So we're highly sensitive to it, and we've worked really hard through the piece to try and make it as tolerable as possible. I think we've had some good success. It's not to say that there hasn't been tough times for a number of people, and including even more senior people that will have dual careers and young children at home and maybe had no child care while kids weren't in school. So lots of work life issues in the conversation. That's been going on much longer than COVID. I think COVID just took it to the extremes in terms of testing the system. We've proven, and thankfully come into it, we've already had a good culture, and we have a good EQ around our people. So I think we started from a really good position, managed our way through the pandemic thus far pretty well. I think that strong cultural fabric that holds us all together has really played out nicely for us during COVID. And then I think if you're a young person in the business, you want to have avenues open to you in terms of people that you can turn to, whether it's a mentor or a sponsor, to have honest conversations looking for real solutions to what our real problems or real issues that you're dealing with in terms of building your career. Cultures and values at TD Securities mean that we strive to be fair to everyone, considerate, to listen, and then to do the right thing. Our intention has always been to encourage the very best experience, knowing that it is a challenging job in what is an intense industry. What have we done that's different? Last July, we announced the post-pandemic hybrid work model that's gearing towards three days in the office and two days of remote work. And we put months of collective thought, and we solicited a ton of engagement from nearly all our staff through a couple of internal surveys, and really gleaned a lot of very important information. Remote work in the right doses does seem to offer meaningful benefits. If someone wants to work five days in the office, they're welcome to. But if they want to take those two days and work from home, well, they're more than welcome to. And that's what it's going to look like when we do fully return to the office. So we've realized that the added flexibility is important. It does help enable people's well-being, family situations, whether it be with children or elderly parents. Yet, you want to protect that sense of team, the fun of working within a team and being in person and celebrating deals together and going out for coffees and lunches and dinners, et cetera. So all those day to day things from an office perspective, we don't want to lose. So we feel that the hybrid model is the best way to go. It won't be perfect from day one but we're committed to iterating and making the post-COVID workplace better for everyone. I think new recruits coming into TD Securities can feel quite comfortable that they will continue to focus on making their overall work experience and work life experience a good one.

PETER HAYNES: Robbie, you mentioned a few times during that discussion that not everyone who starts in investment banking is necessarily cut out for investment banking. If we have some of our investment banking analysts or potential recruits that are listening to this podcast, what would you tell them are the characteristics that differentiate a great analyst in investment banking from say a good analyst?

ROBBIE PRYDE: Every individual is different, but there definitely are characteristics that I think do tend to lead to success. So we go through a really rigorous hiring process, Peter, and it's not easy to get hired as an analyst at most dealers, and TD Securities in particular. I think coming in the door we know a fair bit about you. We know that you were an excellent student. We know that you interviewed well. We know that you're a problem solver, and we're going to assume that you're going to work hard and deliver. When you come in the door, it's first of all, it's a team. It's not an individual, it is a team effort. The client needs to come first because that is how we earn our living. The client and the deal being put first earns you trust and credibility within your group and within the entirety of CIB. And that's really valuable to kind of earn your spot by working hard, doing the right things for the client, and being a really good partner. That's step one. And most people can do that. It's rare that we have anyone come through the door that can't get to that first step. But then I think the second step, or the most important thing. Is your own personal approach to what you want out of your career. When you're not in the deal bunker, it's important that you take time early in your career to reflect on the bigger picture. To think about what is it that you like about the job. What is it that you don't like about the job? What can you do better? What can you do more of? What is your personality best suited for, because it's not a cookie cutter. Everyone is a different individual. Are you being challenged? Are you growing? These are all questions you need to ask yourself. And the answers will come to you, but quite often you need advice. So you need to step forward and ask for help and ask for advice. And I think that's really important. So you need to have a development conversation with your boss, with your leader, or with your mentor. I think that's really what starts to set people apart, that driven curiosity to make yourself better and to search out what you want out of your career, and ask experienced people to help lead the way. Because you can't figure it all out in your first year doing the business. You may think you can, but you can't. So I think that's really important. A great analyst thrives and they thrive off curiosity. They thrive off seeking to be better, and it can be competitive. What we strive for in our culture here is not individual competitiveness so much as group competitiveness where collectively, you're trying to get to a better spot for yourselves and for our clients. And then the last thing I'll say, and I always lecture this whenever I speak to new recruits, is own your mistakes. Don't ever try and cover up a mistake, because that is when you lose your credibility, and all the currency you gain for yourself is if you try and cover up a mistake. Because then that bond of trust is broken. When you've made a mistake just put up your hand, and it'll get dealt with, no matter how big or small it is. I always find that's great advice to give young people coming into the business.

PETER HAYNES: Final question for you today, Robbie, is going to be around leadership. You've always had a door that's open for all of your employees, and that's one of the many reasons why you're such a respected leader within TD Securities. What is the single best piece of advice you've received on leadership?

ROBBIE PRYDE: Focus on EQ. The businesses is full of EQ everywhere, so there's lots of smart people. And I think the ones that really set themselves apart as great leaders have a very significant EQ presence. Understanding and feeling people, and I think that's very, very important. And I also learned very early in my career that you don't have to be the smartest person in the room, that you are better off and better challenged if you surround yourself with really good strong people. And I've been fortunate enough in my career to have done that and fortunate enough to work with really strong partners, really smart people, good people, fair people, win the right way, et cetera. And I think that rubs off. That's what I like. So I like being challenged. I don't want to walk into a room with the answers. I want to walk into the room with some questions, and hopefully smart questions that challenge people, and we get to better answers because you're challenging them to just search out those answers. Not walk in and say this is how we're going to do it. So you collaborate, you make it a partnership. You make people leaders by doing that and give them lots of room to expand their careers, their minds, their opportunities. So that's how I approach it. So it's not one piece of advice I ever got. But I always appreciated any attention I got from a senior leader. Years ago, I don't forget. I remember what it was like cutting your teeth in the business and any piece of advice or help was greatly appreciated by me at the time. So I do like to do that. I love the business. It's filled with great people. TD Securities is a wonderful place to work. We've got a great model, a great strategy in place, great people executing that strategy. So for me, waking up every day and occasionally driving to work in the fall, but now just rolling to my desk, it's a terrific experience and I love the business. So thanks for having me on Peter.

PETER HAYNES: I think back to the taking it a step further from your open door policy, having an open door policy means you're always in listening mode and you listen to your employees and help work through their problems in the same way you listen to your clients and help them work through their problems. And I'm convinced that the best investment bankers and best salespeople in our industry are the ones that listen the most and let the other person on the other side do the talking. Because they'll talk themselves right into your lap and you'll earn the trade as a result of being a good listener. So thank you for coming on today, Robbie, really appreciate it. And best of luck to TD's Investment Banking Group in 2022.

[MUSIC PLAYING]

ANNOUNCER: Thank you for listening to Viewpoint, a TD Securities podcast. If you enjoyed this episode, subscribe to this series on Google Podcasts or Spotify. For more thought leadership content, visit TD Securities and follow us on LinkedIn for all the latest TD Securities updates. For relevant disclosures to this podcast, please refer to the Viewpoint landing page on our website.

This podcast should not be copied, distributed, published or reproduced, in whole or in part. The information contained in this recording was obtained from publicly available sources, has not been independently verified by TD Securities, may not be current, and TD Securities has no obligation to provide any updates or changes. All price references and market forecasts are as of the date of recording. The views and opinions expressed in this podcast are not necessarily those of TD Securities and may differ from the views and opinions of other departments or divisions of TD Securities and its affiliates. TD Securities is not providing any financial, economic, legal, accounting, or tax advice or recommendations in this podcast. The information contained in this podcast does not constitute investment advice or an offer to buy or sell securities or any other product and should not be relied upon to evaluate any potential transaction. Neither TD Securities nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefore (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed.