People Are Worried About Block Trades

Most of what investment banks do is pitching. Sometimes an unsolicited transaction will show up at their door: A hedge fund will call to say “hey I was thinking about buying some derivatives, do you have any,” an asset manager will call to say “hey I own a billion dollars of bonds I don’t want anymore, will you buy them,” a corporate client will call to say “hey I want to do a merger, what looks good,” etc. But every time you get 10 minutes between inbound inquiries, you are pitching, or thinking up things to pitch. You dream up the derivative and then call the hedge fund to buy it. Clients mostly make money by owning things; banks mostly make money by making transactions happen. The banks are the ones who want the transactions to happen, so they’re the ones suggesting the transactions.

One good way to pitch someone on selling something is to call them up and say “hey we have a motivated buyer for that thing you own, you should sell it, you’ll get a good price.” One good way to pitch someone on buying something is to call them up and say “hey we have a motivated seller of that thing you like, you should buy it, you’ll get a good price.” And so if you walk into work one day and the phones aren’t ringing, a thing you could do is: