Authors: John Rolfe,Peter Troob
“Mr. Jenrette, can you please talk a little bit about which product or industry areas DLJ intends to focus on over the next
few years as potential growth areas?”
“Certainly, Mike,” Jenrette replied, having already committed each of our names to memory.
As Jenrette launched into a discourse on potential areas ripe for expansion in the investment banking world, a struggle of
epic proportions began to unfold directly across the table from us. With each word that came out of Jenrette’s mouth, Stevens’s
eyelids grew heavier. Several times, his head began to sink backward as his body’s desire for slumber began taking over, and
it was only at the last minute that his head would snap back to vertical. Finally, there was nothing left that Stevens could
do. His head fell backward, his mouth fell wide open, and there he lay in deep slumber while the chairman of the board answered
the question Stevens had asked just moments before.
Fortunately for Stevens, Jenrette was too good of a man to draw attention to his condition. While a more devious soul might
have chosen the moment to either humiliate Stevens verbally or, at the very least, pour a shot of tequila past his open lips
and directly into his gullet, Jenrette chose instead to wrap up the question quickly and move on to the next one. In the investment
banking land of wall-to-wall hard-asses, the man was a true gentleman.
With the exception, perhaps, of Stevens and Slick, not many of us had particularly enviable live deal experience over the
course of the summer. For the most part, the summer consisted of a whole lot of pitches and just a few scattered deals. Ten
weeks was barely enough time to see
a deal from beginning to end, but it was more than enough time to do multiple pitches for potential clients. When it came
to these pitches, one managing director took the blue ribbon. His name was William DeBenedetti; his fellow managing directors
called him Billy, but we knew him as “Bubbles.”
Bubbles was as much fun as a bottle of lukewarm castor oil. He’d only been at DLJ for two short months and he’d already garnered
a reputation as one of the most fearsome pitch book generators in DLJ history. He’d come to DLJ from Lehman Brothers, receiving
a bump from senior vice president to managing director in the process. Legend had it that among the junior bankers at Lehman
he’d been the most reviled man on staff, and upon his departure the entire analyst class had thrown a party where the collective
level of joy approached that at Christ’s resurrection. Bubbles was as short as they came—somewhere between a dwarf and a midget,
and collective conjecture was that his tyrannical behavior was as much a result of a Napoleon complex as anything else. He’d
been hired into DLJ’s mergers and acquisitions (M&A) group as part of an initiative to increase the bank’s presence in the
There’s an important tenet of investment banking: It’s not the work you have to do but who you have to do it for. Pitch books
aren’t always all-night affairs, but working for Bubbles was virtually guaranteed to be a twenty-four-hour-a-day, seven-day-a-week
job. The job included lots of humiliation, and a willingness to take it up the rear without Vaseline.
Bubble’s focus was on the universe of financial buyers, those groups whose charge was to use borrowed money
to buy businesses from their existing owners, make subsequent operational and strategic changes, and then sell the businesses
several years later at a healthy profit. As a group, the financial buyers had enjoyed several years of enormous historical
returns on their invested capital and, as a result, had received a large influx of money from other investors looking to join
the party. All this money was out looking for new companies to buy, and Bubbles had made it his mission to bring as many acquisition
ideas to the financial buyers as he could churn out. In concept, the idea was a simple one. In reality, it was another matter
Bubbles’s pitch books could contain anywhere from five to twenty potential acquisition candidates for the lucky recipient.
For each potential candidate, the pitch book contained a summary of the company’s product lines, a listing of current news
events on the company, detail on the company’s historical financial performance, a build-up of the company’s current capital
structure, current valuation parameters, a listing of the current ownership profile, and short biographies on each of the
company’s senior management and board of directors. It was a lot of information. It filled up a lot of pages. That made the
pitch books heavy, which was what Bubbles liked. Given the high degree of likelihood that none of the material would ever
be given more than the briefest consideration by the recipients, the compilation of the necessary components should have been
a relatively mechanized event for the associates and analysts involved. The associates and analysts, though, had been trained
through negative reinforcement to develop an attention to detail that turned the compilation process into
an event of major import. Creation of a pitch book for Bubbles was approached by analysts and associates alike as an activity
akin to the illumination of a holy manuscript by medieval monks.
As Bubbles became aware of the wealth of productive pitch-making capacity that the summer associate pool provided, he began
directly staffing summer associates on his weighty pitches. He bypassed the usual staffing channels, preferring to corral
the fresh meat himself. As the weeks passed, moreover, his ambitions grew grander and grander. As his ambitions increased
so, too, did the number of companies included in each pitch. Bubbles’s pitches, in fact, began to expand to such generous
proportions that they became living, breathing creatures that were incapable of being tamed by a single associate. Development
of the pitches began to require the input of multiple associates.
The granddaddy of all of Bubbles’s pitches was code-named Kinetic II. All of Bubbles’s new business hunts had code names because
in his eyes it heightened the air of mystery and secrecy surrounding the projects. He believed that everybody was trying to
steal his ideas, and this drove him to swear all junior bankers with whom he worked to total secrecy. In Bubbles’s mind, competitors
were even trying to tap into his cellular phone conversations to get a leg up on his professional endeavors. Any conversation
with Bubbles that he was conducting from his cellular phone or from an airplane took place only under the strictest of rules.
Company names could never be used; code names were used instead. This led to frequent conversations that, taken out of context,
sounded positively ludicrous. For instance:
“Hi, it’s Bill. I’ve been thinking, why don’t we look at a scenario where Big Bear acquires Pumpernickel Dough’s Butterbean
“Okay, Bill, but what should I assume happens with Pumpernickel Dough’s Tinkerbell division?”
“Assume it gets rolled up into Big Bear’s Claw division.”
“You got it, Bill.”
It was like listening to Warren Buffet on acid.
Kinetic II was, not surprisingly, the descendant of Kinetic I, a pitch that Slick had initially spearheaded with the help
of both a full-time associate, Brian Goldfarb, and an analyst, Adam Davis. Both Kinetic I and Kinetic II were designed as
generic pitches that could be made to any of the big financial buyers. Like a two-dollar whore, Kinetic I had made the financial
buyer rounds on Wall Street. Bubbles had pitched Kinetic I to the likes of Forstman Little, Oaktree, KKR, and Kelso & Co.,
all of whom were significant players in the leveraged buyout business. Although none of them had been tempted by the bait,
Bubbles had been emboldened by his first trip round the Street to take another shot at the stars. And so, the beast that would
become Kinetic II was born.
Kinetic II, as conceived by Bubbles, was considerably more ambitious than Kinetic I. Whereas Kinetic I had included profiles
of just ten companies, this number would be doubled to an even twenty for Kinetic II. And with a doubling of the pitch’s inherent
size, additional staffing resources would be needed to bring the behemoth in on schedule.
Rolfe had established his reputation early on in the summer as master of the pitches. The luck of the draw
had ensured that he got no live deal experience but instead a wealth of seasoning in new business initiatives. In an attempt
to turn this apparent sow’s ear into a silk purse, Rolfe had decided that if he were to be relegated solely to producing pitches,
then he’d bring his entire arsenal of capabilities to bear on development of the most awesome set of pitch-making abilities
that any DLJ summer associate had ever commanded. It was no surprise, therefore, that he was the one chosen to augment the
original Kinetic I pitch team for the genesis of Kinetic II. With his addition, the team stood at five: Bubbles, Goldfarb,
Slick, Rolfe, and Adam. When Bubbles called the shots, they all jumped. The problem was that with a full-time associate, two
summer associates, and a senior analyst all on the same team there were effectively four junior bankers who were all fairly
close to each other in the DLJ hierarchy. This circumstance, coupled with the general loathing and disrespect that they all
had incubated for Bubbles, led to a dynamic whereby none of them wanted to take ownership of the project and drive the process
Goldfarb was busy on a real deal and Adam was as elusive as a fox, so as luck would have it, Rolfe and Slick became the Kinetic
II go-to guys. Kinetic II went through so many rewrites and drafts that the latest version was rarely ever more than two hours
As the day approached for the first presentation of the Kinetic II pitch book to one of the financial buyers, the level of
frenzy surrounding the project increased. Bubbles was about to burst, calling down to either Rolfe or Slick with demands for
changes to the book at least twice an hour. On the day prior to the book’s initial rollout,
Bubbles had planned to travel to Chicago to work on another engagement. Rolfe and Slick were looking forward to his departure
because, although they knew that he was never more than a phone call away, they believed that the logistics of his calling
to demand more changes to the book would at least slow down the rate of calls they had, to that point, been receiving. At
the very least, they figured that they would be spared the annoyance of his calls while he was in the air. What they didn’t
know was that Bubbles was about to both cement his reputation as a dickweed and teach them the futility of ever believing
that they could escape their masters’ clutches, all with one phone call. Rolfe was the lucky recipient of Bubbles’s initial
Slick and I had been going nuts for the entire week trying to get Kinetic II into shape. We were down to the short strokes.
Bubbles had departed New York on a 3:30
. flight headed for Chicago. I was sitting at my desk fifteen minutes later, at 3:45, when the phone rang. Heather, one of
our BAs, picked it up.
“Rolfe, you’ve got Bill DeBenedetti on the phone. He says it’s urgent.”
My peace was shattered.
I yelled to Slick, “Slick, get in here, Bubbles is on the phone.”
Slick came running in from his office. I picked up the phone.
“Bill, hi, it’s John. I’ve got Perentazzi in here. I’m gonna put you on the box.” I flipped the speakerphone on. “OK, Bill,
you’re on the box. What’s up?”
“Hi, guys, sorry if the connection’s bad. I’m calling from the plane. Look, I’ve got lots of changes to the book. You two
are gonna have to get these processed as quickly as possible. We’ve got to get these books into production. Our meeting’s
at nine tomorrow morning.”
“OK, Bill, go ahead. We’ve got a draft of the book here. Why don’t you start going through the changes one by one.”
“All right. Most of the changes are to section two. I want to change the structure of this section around. Page forty-six
should now become the new page forty-three…the old page forty-three should now become the new page forty-one…you need to change
the heading on the old page forty-one to read ‘Strong Operating Leverage Will Contribute to Outstanding Investment Returns,’
then bold it and double underline it and then make that page the new page forty-four. Box page fifty in a bold box and shade
the right column that says ‘Returns.’ Oh, yeah, back on page thirty-eight, double underline the IRR percentage and make the
chart blue and green, not blue and red. Change the chart on page forty to a more neutral color like yellow. You guys should
know better than to put a chart in red. Red means losses—c’mon guys, get with the program. And…” Bubbles continued to rail
off changes during a two-minute rapid-fire monologue.
I scribbled down the desired changes furiously while Slick reordered pages in a whirlwind of paper. Bubbles finished his directives
and the phone went silent momentarily.
“You got all that?” he asked.
“Bill, maybe you could run through those one more
time to make sure that we’ve got everything right. We don’t want to fuck this up.”
“Goddamn it, I don’t have time for this. I’ll do it once more, but you’d better listen carefully. I’ve got other things that
I need to be doing.”
Bubbles ran through the changes again. I checked his second run-through against my notes and everything was checking out fine.
My anxiety moderated slightly. I muted the speakerphone and turned to Slick.
“I think we’re OK. Everything he just read back matches what I’ve got written down here.”
Slick looked at me blankly. “What the fuck are you talking about, Rolfe? I’ve been rearranging pages here and nothing that
he just said makes any sense. He just reordered everything to look like complete bullshit. He’s got us writing text headers
on section title pages, and has us pulling out pages that cover all the key financial data. This doesn’t make any fucking
“Hello, hello, are you guys there?” Bubbles was getting impatient.
I took the phone off mute. “Hold on just a second, Bill. We’re trying to get everything straight here.”