Bringing together BofA’s full capital markets capabilities

If asked to distil his role into its core elements, it is likely that creating a unified “capital markets culture” would feature in the answer by Jeff Tannenbaum, Bank of America’s (BofA’s) head of capital markets in Europe, the Middle East and Africa (EMEA). However, he has always been a “deal guy”, and fortunate enough to work on some of BofA’s largest capital market deals in EMEA, so that side of things still engages him too.

Mr Tannenbaum, the bank’s former EMEA head of debt capital markets (DCM) with more than two decades’ experience in its fixed-income business in London and New York, has been responsible for its full capital markets offering in the region since October 2020. He believes there are numerous benefits to having a unified structure in an area of banking that can, at times, be prone to siloed thinking.

Wider perspective

“What we have found over the past 18 months is that, in response to the challenging market conditions and wider circumstances, what clients need from us at any given moment can change quite a lot. Therefore, having a perspective across equity capital markets (ECM), leveraged finance, DCM and derivatives, is definitely beneficial,” he says.

“We have a very clear strategy around making sure that all our teams, from the heads all the way down to the client level, are approaching everything they do in an integrated way,” he adds. “So, if we’re discussing a bond issue with a client, it’s also considering what is the equity effect, what is the liability management or the hedging angle? It’s all about the client feeling that they’re getting genuine capital structure advice, rather than a siloed view.”

Mr Tannenbaum also believes there are benefits of the whole team feeling that they have “one leader trumpeting them” from a morale and culture point of view, as well as the greater mobility and development opportunities this kind of structure opens up. “I am strongly against hierarchy,” he says. “I don’t care if someone’s an analyst or a managing director (MD), if they’ve got good ideas and they’re good with clients, then they should be trusted to have wide-ranging conversations.”

Thinking bigger

This approach is evident throughout Mr Tannenbaum’s thinking. Although he has aspirations for growth in specific product areas — such as leveraged finance, where he believes the bank can increase its market share compared to last year, or engaging with DCM clients around bridging finance and debt derivatives — he is far more interested in the bigger trends and how they impact client needs.

“The world has clearly changed over the past 18 months,” he notes. “This is not a question of which product we push.”

Instead, he believes that clients need support with bigger fundamental questions about their future, whether they work in sectors facing existential challenges, such as retail and travel, or those that are experiencing rapid expansion, such as IT and biotech. “The real growth opportunities for us as a business are actually working with our clients in each industry to understand what changes they need to go through to adapt to the shifting landscape. Effectively, how can we partner with them to create the right corporate structure, balance sheet, mergers and acquisitions (M&As), etc.”

Mr Tannenbaum comes from a trading background and is always looking for ways and opportunities to put BofA’s balance sheet to work to support clients, wherever they are in their lifecycle.

For the growth segment of the market, this includes a clear strategy of engaging with these companies earlier in the process, as if the bank is able to support clients from early-stage capital raises, this can mature into a long-term relationship all the way through to a potential initial public offering, subsequent debt issuance and M&A. “I dare say that in the past, perhaps that kind of company was just below the radar of large investment banks,” he notes. “I want to make sure that we’re able to add value for founders and owners right from the start of their journey.”

ESG at centre

It is also impossible to support businesses with transition needs without considering them in the context of sustainability and the broader environmental, social and governance (ESG) agenda. While the bond markets have been at the vanguard of these issues, corporates increasingly needing — and are demanding — ESG-flavoured financing in other parts of the capital markets.

“Something that’s a key priority for me is ensuring that our ESG capabilities are not just focused on green bonds, or even within DCM more broadly,” Mr Tannenbaum notes. “Because, when we speak to clients, this is something that is relevant in pretty much every deal we do now across loans, ECM and derivatives.”

He is impressed by how this area has risen up the priority list for clients. In the past it was sometimes more difficult, he says, to engage with clients as they did not see a clear financial benefit; however, this is now something that all CEOs — who are facing pressure from their shareholders, as well as staff within their own business — want to talk about. The markets have also moved, and there is now often a clear pricing benefit for clients in choosing financing options with ESG criteria attached to them. “You can talk to CEOs all day about general financing, but what really gets them animated is when ESG comes into the conversation,” he says.

BofA has recently formed an EMEA ESG Council to steer its work at a strategic level. At an operational level, there is also a central ESG advisory team that works across the product teams to ensure that specific expertise is available when advising clients and structuring deals. But Mr Tannenbaum also believes it will be increasingly important for all capital market bankers to understand this area well: “This is not about every banker joining an ESG team, but it is incumbent on every capital market professional to understand how in their product area, and with their clients, they can use ESG.”

Virtuous circle

Mr Tannenbaum believes there is a virtuous circle in the ESG space, whereby better understanding among staff helps clients engage with ESG financing more readily. When a positive outcome is reached, everyone’s confidence in ESG increases. “You see the banker excited, you see the client excited,” he notes, adding that they like to “put clients in touch with each other so they can educate one another, and so there are even more people talking about this.”

Building networks and relationships with both clients and colleagues is clearly something that makes Mr Tannenbaum tick, and doing so is a key part of why he has remained with BofA for so long. “I think one of my biggest strengths throughout my career, whether that was when I was a first-year analyst or in my role now, has been the network of people around me that has wanted to work together to deliver for clients,” he says, adding “that network I have developed is a huge intellectual competitive advantage for me with my clients.” 

He believes the past 18 months, where people have largely been working remotely, have really shown the importance of strong relationships with both colleagues and clients. “It has been a good test of those relationships, because if you have a great relationship with a client, engaging with them virtually is actually really easy.”

Collaboration and learning

Given Mr Tannenbaum’s clear focus on the importance of collaborative working, he is looking forward to staff being able to work together in the office environment again. “You learn through osmosis and you learn from the people around you, as well as being able to brainstorm and discuss ideas,” he says.

This is particularly important for supporting junior staff, he adds, saying: “If I think about the number of juniors we have hired in the past year or so that I haven’t been able to meet yet in person, it’s a real shame. A big part of my job is to help educate those juniors. There is nothing better in life for me than to hire an analyst and, 10 or 12 years later, be able to promote them to MD. But if I can’t physically be with them to say jump in my office to figure something out, let’s join this client call or meeting together, or let’s have a coffee to have a general chat about how you’re doing, I feel we are doing a huge disservice to their ability to develop.”

For him, as bankers move back into the office, it is important to find the right balance. “We’re looking forward to that full return to the office. There are clear benefits in being able to have a spontaneous conversation with colleagues, to walk onto the trading floor and to mix with different industry teams. But perhaps there is a day where you want to do more focused work or clients want to meet over video,” he says. “To me, it’s about finding the right rhythm. We’ve got to get back to collaboration and learning. Ultimately, flexibility will be a part of that.”