The Israelis Who Survived the Wolves of Wall Street

The 1990s were a golden age for Israelis working in the world’s financial capital. Now? Not so much. Financial mavens reveal how they made it to the top and, even harder, stayed there

Sass Darwish, left, Michal Katz, Tomer Perry and Tal Liani
Natan Dvir

NEW YORK – For years, it was considered the “temple” for graduates in economics, finance and business administration, the place where you could get very rich, very quickly: Wall Street, the financial capital of the United States.

Hundreds of Israelis arrived in the hope of scaling the heights, and in the 1990s it even seemed they were going to flood the place. But many of the new arrivals were disappointed to discover that money didn’t lie on the sidewalks, and most found themselves out within a few years – usually not voluntarily.

Today, there are only a few dozen Israelis in management on Wall Street. Some preferred not to be interviewed due to the restrictions Wall Street has imposed on workers since the 2008 financial crisis, or because they thought anonymity was preferable. But several agreed to share the big dreams of Israelis who go there, the reasons so many end up disappointed and how it is still possible to survive.

Michael Ronen is a partner at Goldman Sachs, co-chief operating officer of its global Technology, Media and Telecommunications Group. In addition to running the New York office, he’s also responsible for the firm’s media and telecoms mergers and acquisitions business in the Americas. “I’m at the heart of things,” he says. “Every decision is critical, and if you fail – the failure is resounding.”

Ronen, 44, arrived in the United States in 1996 after studying law at Tel Aviv University and practicing law in Israel. He earned an MBA in business administration from the Stern School of Business at NYU in 1998 and joined Goldman Sachs as an associate in its Communications, Media and Entertainment group during the halcyon days of the first dot-com bubble. He filled several positions there and began specializing in international mergers and acquisitions in technology, media and telecoms. As group director in New York, Ronen is responsible for dealing with huge companies in the field – including Apple, SoftBank, Deutsche Telekom and Tesla, among others. Most of the time he’s in the air, taking frequent trips to the West Coast, Europe and Asia.

Yet just prior to becoming a partner at Goldman Sachs, Ronen thought his Wall Street career was over – until he received a phone call from Goldman Sachs CEO Lloyd Blankfein, telling him he was being made a partner.

“On Wall Street, there’s no ethos of a prolonged career,” says Ronen. “It’s a machine that draws in the best students, and then pushes some up and some out. It’s pure capitalism. If you aren’t sufficiently focused, you’re out. But after working on Wall Street, you can definitely find amazing job opportunities.

“I definitely understand why only a few Israelis have remained on Wall Street,” he says. “It’s extremely hard work, with an intense and demanding lifestyle. Once every two weeks I’m on overseas trips. I fly from New York to Brazil, Paris, Tokyo, Tel Aviv, Berlin. I get 500-600 emails each day. If you work as a junior on Wall Street and you understand the numbers and work hard, you’ll get along. But when you advance to senior positions, you need other skills, such as strategic understanding and the ability to conduct negotiations. I was afraid I wouldn’t succeed because I’m Israeli. I’m not connected to the prestigious private clubs and my understanding of football is limited. But I’ve learned to be American when necessary.”

People passing a Wall Street subway stop, in New York's Financial District.
Richard Drew/AP

Ronen attributes his success to the basic values he has absorbed during his life: integrity, hard work, perseverance. “Making international deals requires a combination of different capabilities: an analytical ability, but also the ability to understand, to ‘read’ and to influence various people from different cultures. What seems like a drawback at the start of your career – your foreignness – becomes a distinguishing trait: The ability to develop a profound understanding of people from various cultures, and to connect with them.”

Ronen says he loves Israel, but didn’t want to succeed on Wall Street because he’s Israeli. However, he does stay in contact with the Israeli branch of Goldman Sachs, and was involved in several Israeli transactions in recent years: He sold the Israeli internet advertising company Quigo to Time Warner for $340 million in 2007; the high-tech firm ECI Telecom to Shaul Shani; Global Village Telecom Brazil, which was owned by Shaul, to the French firm Vivendi for $4.5 billion in 2009 (and since then, again, to Telefonika). And at the moment, he’s involved in several international mergers or acquisitions projects that include Israeli companies.

Longevity? Not on Wall Street

The ’90s were the golden age of Israeli investment bankers on Wall Street, with dozens working as investment bankers, analysts, brokers, etc. Harvey Krueger, then a senior executive at Lehman Brothers, had a very important role: He not only opened the door for share issues on Wall Street by Israeli companies; he also brought in Israeli investment bankers to work for him. The U.S. investment houses wanted to hire Israeli workers in their investment banking departments in order to find the promising and interesting Israeli companies, and later to overcome cultural obstacles.

Sass Darwish is a senior managing director at the Canadian investment banking group RBC, where he is in charge of the converging technology division. He says that after the Nasdaq bubble burst, there was a drop in the number of Israeli companies issuing stocks, and therefore the need to bring together the investment houses and Israeli companies disappeared. The Israeli bankers who had made it big on Wall Street began to change direction, others were fired and some decided to return to Israel.

He says the situation worsened after the 2008 financial crisis, when thousands on Wall Street lost their jobs. Small investment houses that specialized in small companies merged, and were later swallowed up by larger investment houses; large investment houses acquired one another; and today the small transactions from Israel are far less interesting. Israeli companies are usually sold to U.S. firms and don’t issue stocks.

In addition, investment houses learned that if they wanted to work with Israeli companies, they could still do so without a Hebrew-speaking investment banker. As a result, Israeli investment bankers were fired or decided to leave Wall Street. To them, returning to Israel looked a good option, and back home they found executive positions in the financial market and corporate world.

When the veteran Israeli bankers left, they were not succeeded by a younger generation of Israeli investment bankers because Wall Street downsized and recruits fewer workers now. And Wall Street’s investment houses are investing much more in China, India and Latin America these days. Darwish says the Wall Street door that once opened for Israelis wanting to specialize in Israel is now more or less closed.

A trader working on the floor at the closing bell of the Dow Jones at the New York Stock Exchange, April 6, 2017.
BRYAN R. SMITH/AFP

“Longevity is not exactly part of the Wall Street equation,” he says. “There’s a lot of politics on Wall Street. You have to make lots of money and, if there’s a crisis, they fire thousands in a second.”

Over the years, many young people began to turn to alternative financial industries such as hedge funds, venture capital funds and private equity, along with the burgeoning high-tech industry. “Many young people prefer to go in these directions,” notes Darwish. “The feeling is that you can get rich quicker in a startup.” He adds that while being an analyst or banker today is perceived as slightly old-fashioned, startups are more dynamic and seen as invention incubators.

Amir Ziv, vice dean of the Columbia Business School and a professor of accounting, says students no longer find Wall Street so attractive. “If in the past you could get astronomical salaries on Wall Street relatively quickly, today it’s much more difficult,” he explains. “The days when you could say to yourself, ‘I’m going to work hard for five years and then retire,’ are over. Today, the young people want to find work in startups.”According to figures provided by Regina Resnick, senior associate dean and senior managing director of the Career Management Center at the Columbia Business School administration program, from 1996 to 2006 about 55 percent of business graduates worked in financial services, whereas only 19 percent became business consultants. In 2016, though, there was a significant decrease in the number of graduates working in financial services (37 percent), whereas the percentage working as consultants soared to 34 percent.

Obstacle course in a minefield

A senior executive at one Wall Street investment house explains something else that makes life difficult for Israelis. “The higher up you get, the more vulnerable you are,” he says, speaking on condition of anonymity. “Over the years, you become an expensive employee and you have to justify the money you are paid. If you fail along the way – you’re out. Only a few reach the top of the pyramid here. Most of the Israelis who start out on Wall Street return to Israel or work in other industries, because this is a very difficult place to survive.

“At first you’re involved with technical issues, but that’s the easy part,” he continues. “The more you advance, the more you enter the business world and have to adapt yourself culturally, and to be a businessman and leader. There are a lot of intelligent and highly motivated people over here, but not all of them are leaders who also know how to do business and maneuver between cultures and politics. It’s basically an obstacle course in a minefield.

“You have to be smart and talented, but you have to be lucky too,” he says. “That’s true not only for Israelis, but also for Wall Street in general. What helped me succeed is that I started with a very successful company at a very good time – and sometimes timing is more important than intelligence.”

“Many Israelis have returned home,” says Tomer Perry, who has been working on Wall Street since 2002 and is now managing director of the investment banking division at Lazard investment house. “The good news is that when you return to Israel with overseas work experience, you’re likely to get a better job because you have good English and you’re familiar with the American way of thinking. In the end, many return to Israel with knowledge and experience that contribute to the Israeli economy.

Michael Ronen
Haim Handwerker

“You work long hours on Wall Street,” he adds. “It’s hard and unpredictable work. You work day and night; there’s a lot of traveling; there are no flexible work hours.” Perry says it’s not suitable for everyone, particularly millennials “who want flexibility at work. If up until a few years ago young people worked seven days a week, now they get a day off. The idea is for them not to keep an insane schedule. That’s an entirely new situation.”

Tal Liani, 48, is the most senior Israeli analyst on Wall Street, and responsible for two areas at Merrill Lynch: cybersecurity and cloud infrastructure hardware. Since 2003, he has been a regular in the list of top three Wall Street analysts, as ranked by the professional journal Institutional Investor. “I was more connected to Israel when I began,” he says. “I covered communications equipment, and in Israel there were many companies in the field. I no longer cover Israel, but I’m drawn to the Israeli market through cybersecurity, which is a wonderful field.”

Liani identifies several reasons for the drop in the number of Israelis on Wall Street. “The profitability of the sector declines from year to year,” he notes. “Although the market increased by about 13 percent last year, the investment banks’ revenues fell by over 10 percent due to structural changes in profitability. Trading commissions are lower due to the transition to e-commerce, and investment banking is becoming less profitable due to intense competition.

“There is less recruitment in that kind of situation. In addition, it’s been more difficult to get work visas since 2008, especially in the banks that received government aid. And finally, ‘A friend bringing in a friend’ is deeply rooted in the hiring process here – what in English is called networking. Thus, the decline in the number of Israelis working on Wall Street inherently leads to an additional drop in the number of Israelis” coming in.

Michal Katz is co-head of the technology department in the investment banking division at RBC. She says it’s wrong to say there’s no longer a need for Israeli bankers on Wall Street. “Israeli companies still appreciate banks that invest in Israel and are involved in activity in Israel. The directors of Israeli companies like working with Israeli bankers, because the cultural connection helps,” she explains.

Katz, originally from Haifa, came to the United States at age 14. Her parents decided to try life abroad for a year, and 12 months turned into 30 years. Katz studied law at New York University and afterward worked for the Skadden Arps law firm, where she came into contact with Israeli companies that operated in the United States. Through this she formed connections with the Lehman Brothers’ technology group, where a group of Israeli investment bankers was working under Krueger.

When Lehman Brothers collapsed and Barclays bought the core business for $1.75 billion in 2008, Katz switched to the British bank’s technology division. Four years later she moved to RBC. “I’m at the center of the evolution in the world of technology that has such a great influence on all our lives,” she says. “I’m actually sitting in front of the steering wheel and observing one of the most fascinating phenomena we’re experiencing,” she adds.

Ronen believes Wall Street is actually more open than ever to foreigners who are interested in a career in international finance. “Eight years after the last economic crisis, Wall Street has undergone many structural and regulatory changes, but it remains a center for widespread activity that attracts many young people from around the world,” he says.

“Despite the difficulties here, there are few areas in the world in which young people can start working and immediately be involved in huge deals that change entire industries. Israelis who are interested in the field compete with talented young people from the United States, India and China,” he says. “Nevertheless, the basic qualities required for success remain unchanged: diligence, shrewdness, fairness, flexible thinking and perseverance. In addition, it’s important to have the ability to understand not only the numbers and spreadsheets, but also the people behind them.”