Private equity's data-hiring push; The top M&A bankers, ranked; Tradeweb's next move
Hello, readers!
Big mergers and acquisitions are team efforts. But at the very top, a battled-tested senior banker provides critical advice and connections that can determine a transaction's success or failure. Alex Morrell worked with financial data firm MergerLinks to publish our first-ever rainmakers list this week. You can see rankings for the top 20 M&A bankers for North American deals here.
Casey Sullivan wrote about how private-equity firms, long reliant on human judgment to pick investments and figure out how to generate the best returns, are finally starting to add formalized data-crunching to the mix. Still, it will likely be some time until we see an industry-wide revolution - as one recruiter put it, "you can't go from zero to artificial intelligence." Here's how 6 firms like Blackstone and Cerberus are building data-science teams - and what's holding some back from going all in.
Bradley Saacks and Dan DeFrancesco, our dynamic data duo, talked with 10 insiders to unpack a shakeup at Crux Informatics, which is backed by $41 million from investors including Goldman Sachs, Citi and Two Sigma. The New York-based startup aimed at helping digest and process data has undergone big changes in both its technology and executive leadership.
Dan also chatted with Tradeweb cofounder and CEO Lee Olesky about what he sees as the next big opportunity for the electronic marketplace operator. The next stage isn't just about growing the various marketplaces it already runs, but helping to facilitate more interaction between them, Olesky said. He said he's always seen Tradeweb as a type of search engine for customers to find the best price, counterparty, and way to perform a transaction.
Meanwhile, Bradley reported that a Citadel portfolio manager with a medical degree is going it alone and launching his own healthcare-focused hedge fund. Seems like a timely move - despite the huge outflows facing the broader hedge fund industry, healthcare funds have been a bright spot where investors are still hoping to put more money in.
We also had a fresh WeWork scoop from Meghan Morris. WeWork's head of enterprise sales is out, and the abrupt departure means a role that's key to the coworking giant's turnaround plan is now vacant.
Keep reading for more deep dives: we talked with six former colleagues of WeWork's incoming CEO to learn more about his leadership style; delved into the murky world of litigation finance; asked a Goldman psychologist about the stickiness factor when it comes to fintechs; and chatted with Interactive Brokers insiders to understand the firm's strategy when it comes to being a first mover.
Have a great weekend!
Meredith
If you aren't yet a subscriber to Wall Street Insider, you can sign up here. Are there stories you'd like to see more of, or new areas you'd like to read about? My line is open - mmazzilli@businessinsider.com.
$35 billion fintech Stripe just inked a deal with hospitality PoS-maker Lightspeed - and it's a case study in navigating the tricky world of payments
Montreal-based point-of-sale software company Lightspeed announced a new partnership with the buzzy $35 billion startup Stripe last week.
But Lightspeed's Stripe partnership, which will power Lightspeed's online and in-store payments offering, isn't so cut-and-dry. Behind the scenes, payments are complicated with a multi-pronged network of players on the value chain. There are layers of processors, facilitators, and, ultimately, both online and in-store checkouts that the end consumers see.
Payments related to the sale of CBD, gambling, or adult entertainment, for example, are restricted from the Stripe platform. Stripe explains that given their partnerships with financial institutions like Visa and Mastercard, it needs to work within the requirements of those companies.
WeWork's new CEO Sandeep Mathrani has to pull off one of the most difficult turnarounds Silicon Valley has ever seen. Insiders explain what he's like, and why he's the guy to do it.
WeWork's incoming chief executive may be the antithesis of Adam Neumann, the coworking giant's cofounder and former CEO whose swirling charisma was at the center of the implosion of its planned initial public offering.
Sandeep Mathrani, who spent years at a publicly traded mall company, doesn't like to drink with his colleagues after work or play ping pong in the office in the afternoon, former coworkers said. The engineer turned real-estate executive is more likely to be found interrogating colleagues about their data in presentations and has a knack for cutting operational costs.
Litigation finance has boomed into a $10 billion-plus business. Here's why a shadowy industry that dates back centuries is exploding.
They met at a conference in Santa Monica a decade ago, and over dinner Jonathan Molot and Christopher Bogart, both lawyers, hatched an idea to provide outside funding for lawsuits, a practice that had largely been forbidden for decades, even centuries, in some countries.
Funding lawsuits has its roots in the feudal era when the wealthy could financially back another person's legal action in return for a share of any winnings. Champerty, as it is called, and similar ways of profiting from lawsuits were later outlawed in England. Later, many US states had the same or a similar prohibition.
But in recent years, such funding barriers have been weakened.
A Goldman Sachs psychologist breaks down why customers stay loyal to old institutions over buzzy banking startups - and reveals the mental barriers fintechs need to tackle
The concept of "stickiness," or customers' tendency to stay with the brands to which they've long been tied, can pose a challenge to new players looking to gain market share in financial services.
We spoke with Patrick Perkins, a psychologist and managing director at Goldman Sachs who oversees executive coaching there, about the ways fintechs and incumbents can think about design and brand loyalty as new options crowd the space.
"The bar is very high for people to actually make significant changes in their financial choices, because they're more motivated to really stick with what they know," Perkins said. "They're more motivated to minimize that chance of a loss and retain their sense of power and control."
Interactive Brokers has upended Wall Street time and again. Its cofounder explains how causing chaos is key to staying competitive in a cut-throat industry.
Interactive Brokers, the Greenwich, Connecticut-based brokerage, has led the way during several phases of the industry's fiercely competitive war over price and capabilities that's played out in recent months.
Senior leaders from the firm, including chairman Thomas Peterffy, spoke with Business Insider recently about their strategy - and what comes next.
Their products have been replicated time after time in this cutthroat industry, they're quick to note, and they say they are concerned about tipping off competitors with much talk of future plans.
"We are basically computer programmers. We are not experts of finance," Peterffy told us. "What we lack in expertise in finance we make up in our technology expertise."
Fintech and proptech
- UBS is overhauling its iPhone app for wealth management clients - and it shows how the biggest wealth players are playing catch-up with Netflix-like personalization
- Architecture software startups are looking to disrupt the design process with VR and machine learning - industry insiders say these are the 15 startups to watch
- 11 top smart-doorbell and smart-lock brands - and the big money behind tech that's fueled privacy concerns
- 3 things digital banks like Chime, Monzo, and N26 need to avoid while battling fierce competition in a make-or-break year
- The boom in online payments has companies like Airbnb, OkCupid, and Nordstrom looking for new ways to fight fraud. Here are 10 startups - and the VCs backing them - helping tackle everything from catfishing to money laundering.
- A startup that's raised $25 million from Keith Rabois and Coatue is going up against $2.6 billion Brex and pitching itself as the Honey of corporate cards
- The dream of a cashless society is a nightmare for some. Here's why cities across the US are banning cashless businesses and who's taking which side.
Money and investing
- $160 billion hedge fund Bridgewater is projecting that a group of Asian countries will blow past Europe and the US to own a majority of global stocks in 15 years
- Wealth management giant Merrill Lynch wants its worst-performing markets to catch up and just created a new role to oversee their progress
- Hedge fund giant Elliott is looking more like a buyout shop as it brings in a BlueMountain exec to head up a new group tasked with overseeing portfolio companies