The Cut and Run business?

My current job offers me multiple opportunities to meet investment bankers - the IBD type. Through two years of B-school, I harbored stereotypes of work in investment banks. As I understood it, there were broadly 2 categories: sales/trading and IBD. Sales/trading concerned with transactions in the the capital markets (debt and equity) and IBD involved transactions outside the capital markets and transactions that resulted in an entity gaining exposure to capital markets (IPOs, debentures, etc.) Of course I understand things better now.

The IBD side of the business intrigues me. These are people who do 'transactions'. Transactions are basically barters of economic interest of different kind; most often cash for ownership or cash for claim on future cash/assets.

Each side of the transaction hires a banker to help find the other side. It is in the banker's interest to see the transaction through. Most often banks are paid a success fee for culmination of the transaction. More money for the bank will mean more money for the people working for the bank and specifically more money for the people directly involved in the transaction. Given this, a banker would be happier if there were more transactions done by him.

Now a transaction by definition is a transaction - a point in time agreement between two or more parties for which the banker is witness or chief cause. The banker's fortunes is not linked to the future of either party post the transaction. This might be different in the case of the non-IBD banking system where the bank might have exposure to the underlying party.

So a transaction banker would do deal 1, make a cut from it, move to another situation with different parties, do transaction 2, make a cut from etc. Does this mean that the nature of business is cut and run?

At first sight, this seemed true. I was sitting at the airport trying to reason this out to someone when I realized the flaw. Banking is about relationships, about reputation. There might be cases where a banker cuts and runs, moves from one bank to another and hence able to continue his cut and run. But in the big picture, these transients will be few. A bank will develop a reputation based on the future performance of the party post the transaction it oversaw. Good banks and hence good deal makers will get a reputation of making the right deal and not merely cut and run.