Citigroup M&A Co-Head Peter Tague Highlights Banking Industry's Evolution

On Monday, April 3, investment banker Peter Tague spoke with a group of University of Arizona Law students and faculty as part of the Mundheim Speaker Series. Tague is the global co-head of Citigroup’s Mergers & Acquisitions Department, focusing on Citi’s international clients and transactions.
 
After an introduction by Professor Robert Mundheim, Tague opened up about the inauspicious start to his successful career.
 
“I dropped out of undergrad for a year,” he said.
 
Tague took a full year off while at Hamilton College and moved to London, where he tended bar and worked as a file clerk at a British bank.
 
“That was a very important lesson to me at 20 years old—that I could live outside of my parents’ house and provide for myself,” he recalled.  
 
Ultimately, a partner at the bank encouraged Tague to turn down a full-time job offer from the bank and instead return to the U.S. to finish his education.
 
“It was probably the best single piece of advice I’ve ever gotten,” he said. “I’m glad I finished.”
 
Tague highlighted specific changes in the banking industry that he has encountered during his career.
 
First, he noted that advisors have been forced to specialize over the last 10 years, explaining that “the notion of generalists is sort of a dead concept.”  He attributed that to consumer expectations: “Our clients have gotten so much more sophisticated about the advice and what they want from us, and what they expect us to know about their business, that if we don’t have some degree of specialization we really aren’t credible.”
 
Tague next pointed out that cross-border transactions have become more complex over the last decade.
 
“The degree to which I have needed to become knowledgeable about the geopolitical environment and the political environment in the countries we are operating in has increased dramatically,” he said, noting that most often, more than one government is involved in every M&A transaction.
 
Tague also shared that he spends time in Washington, D.C., meeting with government officials, think tanks, and law firms to look at national security issues surrounding M&A transactions. “I would never have done that 10 years ago,” he remarked.
 
When asked about the financial crisis, Tague noted that the M&A business was crippled despite collateralized debt obligations being far removed from his work.
 
In 2014 Citigroup agreed to a $7 billion deal with the Justice Department in civil penalties, consumer aid and restitution for their business practices leading up to the financial crisis.
 
“The impact for me was trust,” Tague said. “I worked at the institution that seemed to have been right at the center, that brought the U.S. economy to its knees—why would they trust me to give advice about anything?”
 
Tague said he eventually was able to regain his clients’ trust, but noted that Citi has recovered more slowly than other banks.
 
Turning to the future, Tague opined on the Trump administration’s potential impact on the business.
 
“If you say that Trump’s policies are fiscal stimulus, deregulation, and tax reform—that’s great for M&A,” he said. “And I think we’ve seen reflected in the equity markets a degree of optimism.” 
 
However, Tague noted that the failure to pass an alternative model to the Affordable Care Act has “rattled the markets more than a little bit.” He said, “The broader market looks at that and says, ‘That’s a test for the Trump agenda, and will the Trump agenda be able to push through any of its reforms?’ That’s been cast into some doubt.” 
 
Ultimately, he is “not hugely optimistic” that deregulation will occur under the new administration.
 
Tague closed his talk by addressing the difficulties of promoting gender balance in the banking workforce. He identified the lack of role models for women as one challenge.
 
“Because there are fewer women in the business, it is harder for them to find women to mentor them,” he said. Tague also noted that discriminatory behavior is no longer open and explicit. “It’s much more subtle, and it’s much more difficult to police.”
 
Despite these challenges, Tague shared that institutionally, Citigroup has a relatively good representation of females at the board level and the M&A department has more female managing directors on average than other departments at Citigroup.