Here is the a quite funny letter published by a vp in a bulge bracket just for fun:
From: The firm’s management committee
We would like to take this opportunity to provide you an update of the recent trading performance of the firm.
As you may already know, the overall market conditions, both on the debt and equity side have been rather challenging of late. We take this opportunity to explain to you, our fellow shareholder, the firm’s exposure to this market environment as well as the active steps your management team is taking to ensure your investment continues to deliver the high returns you expect.
Over the past twelve months, we have taken active steps to augment shareholder returns and deliver greater returns on your invested capital. We have identified strong growth areas in the market of alternative investments (hedge funds, private equity, etc) as well as augmented our business practices and divisions with strong exposure to these.
We have beefed up the headcount of highly motivated (and thus remunerated) managing directors in our leveraged finance and financial sponsors teams. Whilst this has been a significant short term cost to the firm in terms of hiring costs and guaranteed multi million dollar pay packages, these investments have positioned us to take full advantage of the private equity boom in the market. Unfortunately, the debt markets have not been doing as well as we hoped, and the clients of our financial sponsors group are not doing any deals, so these expensive teams are now put on hold (the technical term for this is “TTT” – Twiddling Their Thumbs”). Also, our prime brokerage teams are in TTT mode owing to no activity from the hedge funds they were hired to serve.
Despite these temporary setbacks, our other divisions are well positioned to deliver strong revenue growth. Our equities division, for example, is ready to kick in and more than make up for the revenue lost by (and higher costs at) our financial sponsors, leveraged finance and prime brokerage divisions. Only problem is, and we are convinced once again that it will be of a short term nature, is that equity markets aren’t doing all that well, and our clients are pulling IPOs left, right and centre.
However, not to work, as we are a forward-thinking, strategic planning organization, and are actively planning for how we will dominate the market in the imminent recovery. As testament to this, we have this summer hired our largest analyst class for the investment bank, and it is the largest class ever. It might be that these analysts will be in TTT mode for some time now, but still, they will ensure we have the deep bench of associates for the next boom market that we will need to stay number one.
In short, we are happy to report that despite our share price performance (which has tanked, and with it, the retention ability of our rainmaking MDs, whose options are now all but worthless), our missing revenue targets and exceeding costs is of no relevance as we are looking to the future, and the future is indeed bright. Trust us!
Your management team.”
It is all folks!