The pain of sharply smaller bonuses to tech investment bankers and advisers is expected to be felt throughout the Bay Area economy
The Bay Area’s dismal pace of companies going public or being acquired spells sharply lower bonuses for many investment bankers and advisers who often shepherd these companies onto Wall Street or into the arms of acquirers.
And that means bad news well beyond the bankers, given the number of accountants, lawyers and other professionals that work on these big deals. All that bonus money percolates through the Bay Area economy, finding its way into restaurants, retailers and real estate brokerages, to name just a few. That doesn't bode well for Tiffany, Tesla or the Tadich Grill. Bankers working on IPOs, especially in the tech sector, could see their bonuses cut almost in half, according to. Another financial sector expected to be hard hit is asset management, given that fees are often based on the value of assets under management, which fell sharply in the down market for stocks and bonds over the last 12 months. Those working in asset management could see their bonuses fall 20% to 25%, according to Johnson Associates’ projections., Goldman Sachs and Morgan Stanley are among the investment banks contributing to the layoff of thousands. The decline in bonuses is all the more painful after 2021’s banner year, when the Fed’s low-rate policies fueled investor appetite for riskier assets such as freshly minted IPOs and high-growth tech stocks. The Fed has now shifted its policy in reverse, raising rates sharply in 2022 and taking other measures to fight the highest inflation in four decades. In 2021, a record year for IPOs by several measures, 64 Bay Area companies went public. But just five Bay Area-based companies made their public debuts that way in 2022. Traditionally, lining up M&A financing has been another lucrative business for Wall Street. But many of the M&A deals that got done in late 2022 relied on so-called private credit, including San Francisco private equity firm
Please follow us on Google to support usUnited States Latest News, United States Headlines
Similar News: You can also read news stories similar to this one that we have collected from other news sources.
Lawsuit claims Oracle fired Bay Area man because of his ageMark Bauer alleges that around 2018, Oracle ‘began making significant structural changes to the detriment of older workers.’
Read more »
Bay Area students and California Academy of Sciences researchers discover new species in 2022The tree of life grew in 2022 as California Academy of Sciences researchers and their international collaborators discovered 146 new animal, plant and fungi species.
Read more »
Bay Area woman, 4 strangers share rental car to Reno after cancelled flightJeanette Bueno is back to relaxing at her home in Pleasanton after a holiday travel adventure she’ll never forget. After their flight to Reno was cancelled from Oakland, they rented a car and made the trip together.
Read more »
After wild year, Bay Area real estate agents foresee cooler market in 2023From record sale prices to higher interest rates, 2022 was another wild one for the real estate market.
Read more »
Bay Area Transit Agencies Offer Free Rides for New Year's EveNew Year's Eve partygoers will be able to get a free, safe ride home until early Sunday morning as Bay Area transit agencies like Muni and Caltrain are offering complimentary services for the holiday.
Read more »
Bay Area Storm: Atmospheric River, Widespread Flood Watches, Gusty WindThe series of storms rolling into the Bay Area continues with what is expected to be a stronger system.
Read more »