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Eisler Capital and Citadel made some big hires in London

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Most European banks have yet to pay their bonuses. This isn’t stopping hedge funds picking off their staff.

The UK’s Financial Conduct Authority (FCA) Register shows that hedge funds Eisler Capital and Citadel LLC were among those making significant hires from banks in the opening months of the year.

Sylvain Bertrand, a Columbia University educated exotic rates trader who previously worked for Barclays in New York, joined macro-focused Eisler Capital in London last month. Bertrand’s arrival seems to have gone unnoticed, despite being a coup for Eisler. He spent six and a half years at Barclays in a career which began with three years at Murex.

Eisler Capital, which only employs 14 FCA Registered employees in London, appears to be in growth mode: it also recruited Martin Priego Wood from Credit Suisse in January, along with Baptiste Carlier, a senior algorithmic trader from Credit Agricole. Founded by former Goldman Sachs partner turned philanthropist Edward Eisler in late 2015, Eisler Capital has a reputation for paying well: the average employee earned nearly £500k ($700k) in 2016, the last year for which figures are available.

While Eisler has been hiring from banks, Citadel Europe made a significant hire from UBS’s asset management business. André Leue, a senior equity analyst and portfolio manager, in the healthcare sector, joined the fund in February according to the FCA Register. Leue spent eight years at UBS in London and a previous 11 years as an analyst and fund manager in Germany.

Like Eisler, Citadel appears to be growing – albeit in equities analysis rather than macro and systematic trading. In January, it hired Francesco Di Giambattista, an equity research analyst who covered Italian banks at UBS in London, and Denis Kopanev, an associate on its equity long short team who previously worked in infrastructure private equity for the CPP Investment Board, and in IBD at Morgan Stanley in London.

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Want to work for a French bank on Wall Street?

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Est-ce que tu parles français? Non? Well, that’s OK, because you don’t have to speak French if you want to work for one of the French banks with a presence on Wall Street. And yes, the two biggest – BNP Paribas and Société Générale Corporate and Investment Banking (SG CIB) – have both been buoyed by former Rothschild investment banker Emmanuel Macron winning the French presidency. In addition, both have been doing plenty of hiring in New York. Fancy working there?

What businesses are these French banks building up now?

BNP Paribas CEO Jean-Laurent Bonnafe wants to make France’s largest bank one of the top three European players in trading, where 2017 bright spots included equity derivatives and prime services, and corporate banking. In addition, Alain Papiasse, deputy COO of BNP’s CIB, said that increased volatility in rates, currencies and other securities translates into more demand for capital markets, according to Bloomberg.

As for SocGen, despite ongoing disputes with U.S. authorities related to the Libyan Investment Authority, LIBOR and sanctions violations, it has been hiring quantitative research analysts on both sides of the pond. The bank’s investment banking arm posted a stronger-than-expected performance in 2017, including improved equities trading revenue and a “better than industry average” drop in FICC trading revenue, according to the FT.

BNP Paribas and SG CIB have both made hires in New York this year. Aashish Rathi joined BNP Paribas as a director of prime solutions and financing (PS&F) structuring last month. Rathi previously worked for DB in Jacksonville. BNP also hired Jeffrey Siegel as a director of public policy and strategic regulatory analysis from the U.S. Department of the Treasury’s Office of International Trade in January.

Meanwhile, SG hiredTim Oeljeschlaeger from J.P. Morgan as a director in the strategic equity transactions group focusing on accelerated share repurchases, call spreads, margin loans and equity offerings and Donna Severino from Credit Suisse as a director of records management.

The moves follow various hire to French banks in the middle and late of 2017. BNP, for example, hired  Declan Hanlon from Nomura Securities in May as an MD in credit trading. SocGen hired Mark Bamber from Deutsche as an MD in flow indexation in November.

Both BNP and SocGen declined to comment on their U.S. hiring intentions in 2018.


Have a confidential story, tip or comment you’d like to share? Contact: dbutcher@efinancialcareers.com
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The pressure is on at Barclays after crazy MD hiring in 2017

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Tomorrow morning, Barclays reports its results for 2017. It will be an important moment for the British bank, which insiders say hired no fewer than 40 managing directors (MDs) to its banking and markets business in 2017.

With half last year’s new MDs hired in the second half of 2017, the fourth quarter will be too soon for dramatic improvements, but investors could be forgiven for expecting things to at least be moving in the right direction. 40 MDs is a big investment for a business that generated a return on equity of only 5.9% in the third quarter of last year. In equities sales and trading as a whole, the bank says it hired 50 people last year. 

Barclay’s decision to hire in a new strata MDs as investment bank CEO Tim Throsby seeks to reinvigorate the markets business could be read as a rejection of the juniorization process in evidence elsewhere. It certainly seems at odds, for example, with Deutsche Bank, where new head of equities Peter Selman has vowed to hire and train-up graduates as he seeks to reinvigorate the equities business.

Barclays’ influx of new MDs has, however, been accompanied by an outflow of existing staff. Over 100 MDs and directors were let go last month, many from teams which benefited from the injection of new senior talent in 2017.  Rather than a refutation of juniorization, Barclays has therefore been engaged in some straightforward upgrading.

Insiders say it’s already having the desired results. Barclays aspires to be, “the leading full-service equities franchise in the UK.” Last year, it ranked second for market share on the London Stock Exchange, the highest its been since 2017. Things aren’t looking bad in fixed income either: Barclays ranked second for overall fixed income market share in Europe according to a Greenwich Associates survey of November 2017. In the same survey, it ranked first for rates and third for credit.

2018 will, however, be the crunch year for Barclays’ investment bank. After last year’s influx of senior talent, very tangible results ought to be visible by the second or third quarters. If not, other banks can be forgiven for questioning the value of hiring in expensive outsiders. Why not invest in developing technology systems and training up graduates instead?


Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com
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How to get a big bonus in a bank without working stupid hours

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You’ve reached the end of the year, and the numbers are in. Like most people in banking, you probably had grander ambitions for your bonus than your boss did, and now you’re furious, or worse, disappointed with yourself. For those who fall into the self-flagellating category, I know exactly what you’re thinking. – This year I will do better. Work harder, take on more projects, wake up earlier, show more face, stay up later and scrap Christmas holidays. Except, just like last year, this won’t work.

So if shouting at your boss, face red and expletives flying is a major faux pas (remember the glass walls!), and if working yourself to the bone in the hope that someone, somewhere, notices and decides to remunerate you with cold hard cash – do not offer the solution, what is to be done?

I tell you what. Put on your shiny strategy hat, analyse the cogs that drive the system, and work smarter, not harder.

Strategy 1: Follow the dollar

This is an strategy taught to me by an early mentor way back when I was applying for internships. Follow the money, and by that I mean, the people making it. As a first step, this means that if you’re in a bank that has declining profits, revenues and headcount, get out now if you want a shot in hell at a good bonus, or even a job by the end of the year. No amount of work would save you if you’re at Lehman c. 2007. Make your plan to get off the sinking ship before it takes you down and half your professional network with it. A similar concept should be applied to your division and even team. If you’re not profitable, sooner or later, your bank account will suffer as much as your bank does, and there is nothing you can do to fix it, least of all by working away your will to live.

Strategy 2: Put your fingers in multiple pies

The most common mistake junior bankers make (as described by senior MD’s) is to sit in front of the screen all day, so that the best their colleagues can say about them is they have a nice head of hair and seem to spell well in their emails. Rather than taking on that additional project so you can work an all-nighter weekend, invest your time in your network. Especially the one outside your bank. Nothing pays like desperation (your future employers’ that is) so if you know everyone in every bank, sooner or later, someone will quit mid-project, and they will be desperate to hire someone, ANYONE, who has ever touched a spreadsheet before. It takes a large and well-connected network, but when you find such an opportunity, negotiate to your heart’s content. I have seen bankers jump entire ranks because they had a skill/client/experience that someone else desperately needed along with the social backing from an existing employee. Unfortunately, this does require you to spend some time talking to people about topics other than how swamped /tired/ [insert your favourite job complaint here] and actually ask them about their day, what they are up to, what is new and if their team is coping well. Done correctly, this could cut your climbing years from Analyst to MD in half. All for the price of some chit chat over coffee.

Strategy 3: Find your mentors

This is my most powerful piece of advice. Mentors enhance your fundamental value as a person regardless of where you are or where the world is heading. Find yourself one (or two, or five) people you like, trust and respect, and cultivate a mentoring relationship with them. Ask them for advice, support and guidance, and then follow it. These people will become your biggest supporters. They will bring opportunities your way which match your aspirations and make you a genuinely better, smarter, more effective leader, strategic thinker and overall higher value employee. Space them out so that you have one in your team, one on the remuneration committee, and one at another company that you respect and might one day want to join. Bring them opportunities when you find them and thank them for their contributions. Stay in touch and show them your progress.

Believe me, it’s not about working hard: it’s about working smart. 

Sacha Nitsetska is a former investment banking associate at J.P. Morgan founder and CEO of mentorforward.org an app that uses machine learning, big data analytics and gamification to connect mentors and mentees in the workplace in order to facilitate knowledge transfer between the younger and older generations. 

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Morning Coffee: The clever new perk at Deutsche Bank. Earn $317k a year in an office with a bed

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Deutsche Bank is developing a well-deserved relationship for a novel approach to rewarding staff. After last year’s decision to withhold performance bonuses in the investment bank, it came up with a cleverly complex system of retention bonuses which are on track to be worth nothing at all when they vest in 2021. It then tried to buoy staff spirits in London with some sort of artisanal coffee stand in the lobby of its offices in London. Now it’s gone a step further again.

Business Insider reports that Deutsche has granted a full week of extra holiday to all the employees in its London office, with effect from April this year. “We are making this change because it is important to Deutsche Bank that our people achieve a good work/life balance,” said the bank in a memo sent out just before Christmas. Employees at Deutsche Bank in the UK will now get a full 30 days’ annual holiday, up from 25 previously.

While this will raise eyebrows on Wall Street, where 10 days’ annual leave are common, it’s also raising eyebrows at Deutsche Bank itself. The German bank is still to announce its bonuses and has been making pre-bonus redundancies to prevent its pool being spread too thinly. The supposition among Deutsche Bank staff is that the extra holiday entitlement is a fop to imminent disappointment.

Separately, fancy offices are becoming a thing. J.P. Morgan is getting a shiny new global one in Manhattan, UBS has got one which flushes the toilets with rainwater harvested on its roof. Bloomberg has gone one (in London) which has sparkly ceilings and “acoustic attenuation.” None of this, however, compares to the Kings Cross office of XTX Markets, the FX trading firm. Quartz is among several publications to have seen inside. The office designer channeled a “steampunk Western” theme and has included a water feature that runs through the floor, a replica of the Apollo 11 landing capsule equipped with game consoles, and a sleeping area which looks like something from a high end mountain shack. Average compensation at XTX is $317k a year.

Meanwhile:

J.P. Morgan’s office might cost $3bn. (BreakingViews) 

J.P. Morgan’s new building won’t be finished ’til 2024, whereupon it will be the tallest in the country. (Financial Times) 

J.P. Morgan’s new skyscraper will house 15,000 people. (Wall Street Journal) 

Despite Brexit, Bank of America extended the lease on its London office building for ten years. (Bloomberg) 

Nomura has been put on negative credit watch by Moody’s because of its overseas investment banking aspirations. (Nikkei)

Barclays (still) wants its investment bankers to work more closely with its corporate bankers. (Financial News) 

Peter Tague, Citi’s global co-head of M&A who joined in the mid-90s, is leaving. (Business Insider) 

The global head of fixed income capital markets at Morgan Stanely has died aged 43. (Bloomberg) 


Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com

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High earners slashed at Barclays as new joiners get big guarantees

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There are a lot fewer euro millionaires among Barclays’ material risk takers than there used to be. This could be because Barclays has been splashing out to hire in a lot of new managing directors from outside. 

The Pillar 3 report accompanying Barclays’ 2017 results, announced today, reveals that Barclays paid 475 material risk takers (senior managers and individuals taking significant risk on behalf of the bank) in excess of €1m last year. This was down from 541 people in 2016, and 612 in 2015.

Barclays’ comparative parsimony follows a 22% decline in profits at Barclays’ International (which includes the investment bank) in 2017 vs. 2016. It also coincides with the addition of 40 new managing directors, 19 of whom were added in the second half of 2017. Today’s Pillar 3 report reveals that 29 people at Barclays International received “buy-out awards” last year worth a collective £31.5m, or an average of £1.1m each.

Barclays’ report today also suggests there are plenty of material risk takers (MRTs) at Barclays International who were zeroed in this year’s bonus round. Of 982 MRTs in total, only 845 received variable compensation – 137, or 14% got nothing at all. Average compensation (including salary and bonus) for material risk takers at Barclays International was £779k last year ($1.1m). This was less than the $1.2m paid to material risk takers at HSBC and considerably less than was paid to material risk takers at U.S. banks in London in 2016 (the last year for which figures were available), as per the chart below.

Nor does the bad pay news at Barclays end there. Despite the bank’s decision this time last year to eliminate automatic 100% bonus deferrals for managing directors, today’s annual report reveals that Barclays is still deferring 100% of all bonuses worth more than £1m ($1.4m). Most MDs will almost certainly fall into this category anyway.

Lastly, you probably wouldn’t want to be a woman at Barclays’ investment bank. Despite the presence of some high profile women, like Kathryn McLeland, the former FIG banker who now runs Barclays’ treasury operations and Asita Anche, Barclay’s head of systemic market-making, Barclays’ newly released figures on its gender pay gap reveal that women at Barclays’ international received bonuses that were, on average, 79% lower than men in 2017.

Photo credit: Alphotographic/Getty

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BNP Paribas’ ex-head of CEEMEA FICC trading joined a hedge fund

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Remember Simon Birch? He’s the former head of central and eastern Europe, Middle East and Africa (CEEMEA) fixed income trading at BNP Paribas. He’s just turned up at hedge fund Highbridge Capital Management.

Birch joined Highbridge this February according to his LinkedIn profile. He left BNP Paribas after nearly three and a half years in October 2017. Birch has been around: prior to BNP, he worked for Morgan Stanley, J.P. Morgan, Bank of American Merrill Lynch, and Barclays.

Birch’s migration to the buy-side comes as Eisler Capital and Citadel have also been hiring in London.

Highbridge Capital has 14 registered employees in the UK according to the FCA register, down from 24 at its peak in March 2016.

Birch left BNP despite the French bank’s emphasis on expanding revenues in its corporate and investment bank by an average rate of 4.5% over the three year period from 2017. His exit also follows cuts at the investment bank last year, although it’s thought that Birch left of his own accord.

Highbridge Capital Management has a strategic partnership with J.P. Morgan and is based out of New York. It operates a variety of funds, including multi and single strategy products, and has around $5bn in assets under management.


Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)

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Good and not-so-good excuses to get out of work for a job interview

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Unless the hiring company is willing to meet with you off the clock, you’ll likely need to spin a tale to sneak away from work for a job interview. It’s a situation where the correct thing to do may be to tell a white lie.

Tell your boss you have an appointment and you’ll be back in a few hours. However, you may feel compelled to offer more details, especially if you’re actively looking for a new job and need to make multiple trips away from the office during the workday.

Caroline Ceniza-Levine, career expert with SixFigureStart, advises approaching the issue with cunning. You need to get your boss inured to the notion that you might be out of the office.

“Start blocking off your calendar and getting people used to you having and keeping your own timetable for doing things before you even start interviewing,” she said. “This will make slotting in interviews easier and less obvious.”

Here’s a general framework of excuses you should never employ, as well as a few of the safer, smarter options.

Bad Excuses

One that insinuates irresponsibility. A common pitfall: You’re so worried about providing a believable excuse, you choose one that makes you look bad. In some situations, the impression you leave can be worse than if your boss found out that you had an interview.

One recruiter said he had a candidate tell him that, in an effort to get away with missing work, they called their current boss after the interview and said they went out the night before and slept through the alarm. Not a good choice. Never choose an excuse that makes you look like a bad employee.

Bad news involving a family member. It’s dangerous to involve someone else who is close to you in an excuse, especially if it is of a serious nature such as sickness, injury or death. What happens at an office party or a work outing that includes spouses or kids? Not only are you involving a second person, but you’ve stretched an excuse into an emotionally manipulative lie.

People can understand if it comes to light that a “dentist’s appointment” was, in actuality, an interview, but an excuse like “My son was in a car accident” is tough to look past. Even if you get the job, you risk burning bridges.

“If additional questions are asked, likely when colleagues want to be supportive because of your loss, your lie will be forced to grow and that is never a good thing – ever,” said Alyssa Gelbard, the president of Resume Strategists.

Many others seconded that notion.

“Most people don’t like to say it’s a family emergency, lest they jinx themselves,” Ceniza-Levine said.

Anything your boss can help you with. You say that something small and inconvenient came up, like a flat tire or your nanny didn’t show, and you’ll be a few hours late. What if someone from the office can help in that situation? Larger financial firms often have backup daycare to guard against their employees missing work due to issues with their children. Some firms even offer concierge services. Know your employer’s policies.

One that doesn’t give you enough time. If an interview is going well, sometimes a one-hour conversation can quickly become a three-hour marathon with multiple people. The last thing you want to do while trying to make a good impression is telling someone you need to walk away. Give yourself plenty of time.

Doing It Right

The easiest, most professional way to get out of work for an interview is to not have to do it at all. Inquire if a hiring company can meet you before or after typical work hours. Even if they say no, they won’t be taken aback by the request. If anything, it will make you look like a responsible employee.

If the interview must happen during work, then consider taking a vacation or personal day, giving more than a day’s notice. Then there is no excuse needed and you won’t have to worry about timing or what to do with your interview clothes.

“You don’t want to be worrying about annoying a supervisor with a last-minute excuse and having that distraction when you are going on an interview,” Gelbard said. “A vacation day also gives you the luxury of not having to worry about rushing back to the office.”

If that is not an option, ask for an early a.m. or late afternoon interview time. Your absence won’t be noticed as much and you won’t need to concern yourself with the “before” and the “after” fallout at your current office.

When making excuses, it’s best to be as vague as possible. “I need to take care of some personal business” or, even better, “I have an appointment” works 90% of the time. Often there is no need to go into more detail and, quite literally, you aren’t fibbing. You can also try “I’m taking a couple of hours’ personal time” or “I’m picking a friend up from the airport.” Try to work from home that day if at all possible.

“For finance pros who need to ditch work for an interview, old standbys include a doctor or dentist appointment, or a maintenance issue in the home – for example, a water leak coming out of my apartment’s sink,” Ceniza-Levine said. “If it’s a lunch-time interview, you can mention an old friend is in town so you’re taking a longer lunch.”

When expecting a series of interviews, either with one company or with different firms, dental problems may be a good excuse. Just don’t make this mistake:


Photo credit: LuminaStock/iStock/Thinkstock
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Morning Coffee: HSBC decides it’s too much hassle to pay some people bonuses. Risky game at Barclays

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HSBC is shifting away from discretionary bonuses towards fixed pay. The decision has some bonus-starved back-office employees up in arms.

HSBC is capping bonuses for thousands of operational staff globally to streamline remuneration, even as ex-CEO Stuart Gulliver is getting a cool $8.5m payout, a 7.2% pay raise, according to the FT. The bonus-streaming seems to be about making managers’ lives easier: an HSBC insider said it’s intended to “simplify” processes and free up management time.

The UK-headquartered bank, Europe’s biggest by assets, plans to restrict bonuses paid next year to junior employees within its back office by limiting payments to the equivalent of two-and-a-half months’ salary. It will increase the base salary for some staff starting next month “to ensure an appropriate balance between fixed and variable pay.”

Even though HSBC tried to assure employees that “this is simply a ‘rebalancing exercise,’” it’s a bit strange, because most banks do not have such caps for junior staff.

The number of full-time employees at HSBC at the end of last year amounted to 228,687, a decrease of 6,488 staff year-on-year.

However, it wasn’t all bad news. The memo to staff comes a day after HSBC reported an 11% increase in annual pre-tax profit to $21bn thanks to strong loan growth, particularly in Asia. HSBC boosted its variable pay pool for all staff by almost 9% to $3.3bn for 2017. Of this, investment bankers received $1.1bn, an increase from $954m the previous year.

Separately, there’s been a bevy of Barclays news causing a wide range of reactions, but some employees are not happy, as the bank is playing a risky game.

Despite recent talk of dividends and share buybacks, Barclays has been stingy with shareholders for some time because huge costs potentially lurk from regulatory penalties for which it has no cushion. The bank has been battling fraud charges related to its 2008 capital raising and crisis-era mortgage-bond sales. Rivals such as Deutsche Bank made very large provisions before they settled their fines, but Barclays is heading to court with nothing put aside, according to the Wall Street Journal. That’s risky business, indeed.

People at Barclays earning over £1m ($1.4m) have 100% of their bonuses deferred, so they could lose a lot if these fines come through and Barclays’ share price collapses.

Compensating the best-performing traders and dealmakers while laying off others is part of CEO Jes Staley’s plan to build a bulge-bracket investment bank capable of competing with the biggest players on Wall Street, according to Bloomberg.

Meanwhile:

Treasury Secretary Steven Mnuchin said that the Trump administration’s policies will raise U.S. wages without causing broader inflation. (Bloomberg)

Big banks in the U.S., which have been seeking to hire more foreign workers in recent years under the H-1B visa program, are now being forced to reconsider their approach after the Trump administration made it harder to obtain the work permits. (Bloomberg)

Claiming unfair dismissal, a former executive director-level currency salesman at J.P. Morgan says that he unfairly lost about £2m ($2.8m) in compensation, including bonuses and unvested stock awards, after he was let go for a practice that was previously commonplace at the bank. (Bloomberg)

ECM bankers rejoice: Securities regulators hoping to spur more initial public offerings are weighing a move that would allow all companies to stage private talks with investors before announcing they will sell stock. (WSJ)

Goldman Sachs raised $2.5bn to buy minority stakes in private-equity firms, betting on an industry that is commanding increasing influence as more businesses choose to stay private longer. (WSJ)

Matt Moberg, the lead portfolio manager of the $5bn DynaTech fund at Franklin Templeton, says that his European history major as an undergraduate student gives him an edge when it comes to assembling the perfect portfolio. (Business Insider)

New York-based LUX Fund Technology and Solutions (FTS) hired Christopher Bloechle, Point72 Asset Management’s former head of IT, as its new CTO. (HFMWeek)

The biggest private-equity firms are in a fund-raising frenzy, but it will be increasingly hard to find the returns that have made them such money magnets. (WSJ)

Eight months after the VC world was rocked by widespread claims of harassment, the industry trade group in charge of lobbying is distributing HR guidelines. (Bloomberg)

What is Wall Street’s relationship status with guns? It’s complicated. (Bloomberg)


Have a confidential story, tip or comment you’d like to share? Contact: dbutcher@efinancialcareers.com
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by actual human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t).

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Is this the best trading job in a bank? Or the worst?

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If you’re looking an exciting trading job in an investment bank, one where you actually get to take proprietary risk with a bank’s own balance sheet, where you’ll deploy some of the most complex algorithmic trading techniques, you might want to try the central risk desk. Then again, you might not. Central risk jobs can be good, or they can be awful.

Central risk desks first came to our attention in 2016, when banks like HSBC were busy building out their central risk functions. Banks like Barclays are still building in central risk now – Asita Anche, the former Goldman quant trader who joined Barclays last June, has been tasked with risk centralization, and is recruiting. Good luck to her: people working in central risk say roles can be very hard to fill because no two central risk desks are the same.

“The central risk desk, or central risk book is an extremely vague concept,” says the global head of central risk at one major bank. “When we look to hire and examine what’s going on at other banks, it’s become apparent that every bank treats central risk completely differently.”

As the places that (in theory) centralize the execution of trades for the whole bank, and offset the aggregated risks with hedging, central risk desks are always highly quantitative. They can also be highly powerful: most banks employ brilliant quantitative traders to devise central risk trading algorithms. Some banks, however, then reduce those quant traders to the role of mere administrators.

“Central risk is the only place now where you can really get to manage risk with the bank’s own capital,” says a senior central risk trader at one leading U.S. bank. “It can be a really great place to work – you can be the quantitative engine that drives the pricing and hedging power across the bank. But first you have to get through the politics.”

Central risks desks evolved along with program trading. As banks traded large portfolios of stocks together, they needed a way to price and hedge those trades in aggregate. From there, central risk moved into placing and hedging trades associated with exchange traded fund and delta one products. It’s now being integrated into banks’ systematic trading offerings (as at Barclays) and ultimately is expected to over both derivatives and cash trades. “There are only a few banks now that are sophisticated enough to be centralizing derivatives risk,” says the central risk head, “but this is the way that it’s going.”

Central risk is political, because as its purview expands other trading desks see it as treading on their turf. “There’s natural push-back,” says the global head. “We’re asking traders to give their flow to one central book, where technology does 80% of 90% or 100% of the work and of course they don’t want to give up that freedom.”

One central risk trader says the main point of dispute is pricing power: “If you just take the inflows that come from clients and put those into a bucket and manage them, it’s a halfway house. You need pricing power over the flows you get in the first place. If you can get that mandate, you’re in a pretty powerful position. If you can’t you’re just a utility function and all the innovation dies.”

That’s not all though. Central risk desks also charge other desks for their services. “If you’re a profit centre and you’re charging other desks for making money, they don’t like it,” says one central risk trader. “It’s game theory – I’m not making money, so neither can you.”

For both these reasons, some central risk desks aren’t seen as sources of P&L and are viewed as little more than utilities employing teams of programmers. Insiders say this is one reason why senior central risk professionals have left for hedge funds over the past year.  “Some people just see us an algo execution team who are complaining that we’re not getting a lot of admiration,” says the global head. He adds, however, that central risk desks’ time has come. They have been raised up by MiFID II.

Under MiFID II, banks are queuing up to become “systematic internalisers” which execute orders for clients outside regulated markets. As such, they do a lot more than just agency trade (matching buyers and sellers), but buy and hold for periods of time, however, short. This introduces them to execution risk, and with execution risk comes the need to manage risk centrally. “There’s a revolution taking place on central risk desks,” says the global head. “Everyone’s trying to become a systematic internalizer and everyone is trying poach from each other in the central risk space. It’s another MiFID II headache.”

As central risk desks become increasingly integrated and increasingly powerful, they are growing. “We used to be just four people when we were siloed and central risk was managed separately,” says one trader. “Now we’re nine and we’ve got headcount for more people. There will be fourteen or fifteen of us eventually and we’ll be managing all the risk that touches the bank’s balance sheet in our space. This is the only way to do it – you can’t have central risk desks managing some of the risk and desks doing the rest.”

While this is the way things are going, some banks still seen as dead-ends for ambitious central risk traders. Insiders say Goldman Sachs is ahead of the curve, as is Citi. By comparison, European banks en-masse are accused of not operating the “for profit” central risk desk model. In general, however, central risk desks in Europe are seen as more advanced than in the U.S.

“There’s so much liquidity in the U.S. that you can unwind the risk you facilitated quite easily,” says the global head of central risk. “In Europe it’s much harder to flush that risk out and so the central risk desk is more important.”


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RBS traders outperformed (again). This is how much they’re paid

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Nowadays, traders at RBS’s investment bank work for an entity known as NatWest Markets. This is in memory of the old NatWest Securities division acquired by RBS in 2000. When it comes to compensation, however, they are still most definitely working for the UK’s government-owned bank, as today’s RBS remuneration report makes amply clear. 

While most other banks in Europe sought agreement from their boards to set bonus levels at 200% of fixed pay under the European Union’s bonus cap, RBS did not. As a result, RBS is forbidden from paying bonuses greater than 100% of combined salaries and allowances to its material risk takers (senior managers and significant traders). Today’s report reveals it’s even more frugal than this: the bonus pool at NatWest Markets was just 65% of fixed pay last year.

In theory, RBS has whomped up salaries to compensate for its miserable bonuses: traders at other banks in London talk with envy about alleged million pound fixed packages on offer to a small coterie of top people there. This might be so, but – frankly – there’s little sign of it in the pay figures.

As the chart below depicts, the average salary for NatWest Markets’ 248 material risk takers (MRTs) below senior management level was £407k ($570k) last year. This was less than at both HSBC and Barclays. The average bonus for the same NatWest MRTs was $370k. At HSBC global banking and markets, the average bonus was 67% higher.

What have traders at NatWest Markets done to deserve diminished pay? Performance doesn’t seem to be part of it. In 2017, revenues across RBS’s macro business (the combined rates and foreign exchange trading desks) rose 5% on 2016. Macro trading accounts for most of the divisional income. By comparison, macro trading revenues at Barclays and HSBC were down 29% and 7% respectively last year. Measured in terms of revenues, RBS’s rates traders are the undeniably best in the industry: while other banks’ rates desks complained of a bitter 12 months, they achieved an 18% increase in revenues to £985m in 2017.

Of course, it can always be argued that RBS’s rates revenues are everything to do with corporate flows and little to do with the skill of its traders. It might also be the case that RBS’s top rates traders are very well paid indeed – the figures in the chart below are only averages. However, it looks like most traders at RBS are still paid well below market, despite performing better than the rest. For this, blame the past: a £1bn loss at RBS’s “legacy” business, which was (somewhat unfairly) incorporated into NatWest Markets last year, resulted in return on equity of -9% at the division in 2017. When you’re a government-owned bank, it’s hard to pay big bonuses when there are losses like that.


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What no one told you about the investment banking dress code

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Banking is a people business.You might think it’s about the numbers, but it’s not. It’s about what people think about you and what you think about them. Perception becomes reality.

In a world like this, the way you dress conveys multitudes about you. Don’t treat it lightly.

During nearly two decades in banking, there are three simple rules I’ve learnt about banking dress code. One rule trumps them all, and it will very rarely be articulated: under no circumstances must you be prettier than your boss.

I’ve seen plenty of interns specially transgress this. They show up with Hermes or Ferragamo ties and Tod’s loafers. Their futures (unless they happen to be children of very important clients) are almost always limited. Never dress better than those above you. It’s one of the CLM’s in finance – Career Limiting Move.

Keep your look clean, polished, professional. But don’t go too far towards looking like you could be an extra in a movie. Looking poor or disadvantaged isn’t a bad strategy. It shows you are hungry and hard working. I personally shoot for an understated Don Draper look.

Secondly, keep it old school.

This isn’t Milan; you aren’t on the runway. Don’t bring out the latest fashion and don’t be trendy. I’ve had guys come in with roll-up jeans on casual days. You want to keep your stuff traditional and simple: dark suits, white shirts. You can break out the Gordon Gekko suspenders when you’ve made a couple of hundred million.

The thing is that it’s very easy for people to stop taking you seriously if you dressing like a super model or pretending you are Mark Zuckerberg.

This applies to weekends too. Weekends are when you might be the office with your MD. But if all she sees is a grease ball in a T-shirt smelling like last night’s party, you just committed another CLM.

Lastly, its not what you wear, but how you wear it. People don’t remember outfit details: they remember generalities and they remember your general demeanor. You can be wearing a low-key suit and a well-tailored shirt, but it will get you nowhere if sit all hunched-up, or talk so that no one can hear you.

What I Learnt on Wall Street is an education focused business founded a group of Wall Street veterans from the best firms determined to help the next generation. 

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Deutsche Bankers complain they still don’t know who’s being laid off

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It’s been a full working week since Bloomberg first reported news of Deutsche Bank’s imminent 250-500 investment banking redundancies and insiders are starting to feel a bit twitchy. They still don’t know who among them will be laid off.

While some big names like Marc Benton and Evans Haji-Touma are definitely on the list, Deutsche M&A bankers say they’re still not clear who else is going. All the while, Deutsche’s bonus announcement date towards the end of the first week of March is drawing ever closer.

“The tone is terrible here,” says one DB investment banker. “People are asking why management is taking its sweet time with these layoffs. As bonus day gets closer, it seems increasingly unfair to let people go.” Another Deutsche insider compares the atmosphere to “mordor.”

While IBD bankers in London wait to learn their fates, markets bankers at Deutsche on Wall Street are allegedly faced with a different predicament: their salaries are too high. As Deutsche sought to increase its presence in the U.S. in recent  years, headhunters say it hiked salaries well above the level of rivals. Now that it needs to cut costs, it’s lumbered with a heavy layer of fixed expenses.

Insiders say Deutsche’s layoffs cover the whole of the investment bank, including the investment banking (IBD), and fixed income and equities sales and trading, but that they are skewed towards IBD. One area, however, is thought to be immune: the large strats team set up by ex-Goldman co-head of strats Sam Wisnia. The suspicion that Wisnia’s strats will remain intact is also said to be causing resentment.

Clarity should, at least, come soon. It will certainly come before bonuses are announced – but maybe not too soon before. “There’s one senior manager who likes to layoff on bonus announcement day,” complains a DB M&A banker. “Sad.”


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Citigroup Malaysia CEO: “Why I’ve stayed at my bank for 27 years”

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Lee Lung Nien has worked for Citigroup for the best part of three decades and he’s clear about what’s motivated him to stay for so long.

“I’ve been based in London, New York, Singapore and Kuala Lumpur, and held 10 jobs in 27 years that have all challenged and stimulated me in different ways. Because of the great internal opportunities that Citi has afforded me, I’ve grown my career without changing companies,” says Lee, who’s been Chief Executive Officer of Citibank Berhad, Citigroup’s wholly-owned subsidiary in Malaysia, since 2014.

Lee spent much of his time at Citi in senior markets roles, before becoming the bank’s COO for Singapore, his home country, in 2010. He then made what he describes as “the most interesting” move of his career in 2012, taking over as Anti-Money Laundering Business Head for Asia, overseeing Citi’s AML monitoring hub in Kuala Lumpur.

“Citi is truly global and its extensive network offers every employee tremendous opportunities to progress and build a successful career with the organization.  One of the best lessons for me is to always be curious and to look for new challenges that will enable you to develop new capabilities or strengthen existing ones. For me the opportunity to move from Sales in Markets to a Controls/Operations role at our Citi Service Centre in Kuala Lumpur exemplifies this. It was a radical shift but it provided me with an environment where I could learn and grow as a leader,” Lee shared.

“It was a big job and it came with added responsibility. I also had to re-locate from Singapore to Malaysia. It wouldn’t have been possible without the great team around me who progressed  and supported me  in charting some new achievements in terms of lower employee attrition and stronger team morale.  That job and the COO position in Singapore prior to the KL posting, gave me the combined leadership skills which are an advantage to me now that I am in a country head role,” he added.

Lee now leads more than 5,500 employees in Malaysia and is extremely proud of the recognition Citi received  as Best Foreign Bank by Finance Asia and The Asset in 2017. “That means several things: being an employer of choice,a trusted advisor to clients and having first-class governance in place by building great relationships with regulators and within the firm.”

This vision is helping Citi recruit some of the strongest  talent in Malaysia, with an emphasis on compliance and anti-money laundering jobs, as well as front-office roles in corporate and consumer banking. “This year we’re looking to hire more fresh talent – particularly in these functions – as we grow our business here,” says Lee. Here at  Citi, we nurture our best talent  and groom them to be global professionals. You get the best of all worlds if you work here.”

No matter which job you’re applying for at Citi in Malaysia, you must be a motivated self-starter and progressive thinker to succeed at the bank, says Lee. “These are  the fundamental  attributes that we look for. For example, if you’re talking to your manager about your career, don’t say ‘what’s the next job for me?’, say ‘I want to move into securities services, how do I get there?’ If you show your boss that you have a plan, doors will open up for you in the future at Citi.”

Lee’s own career is testimony to this. “When I look back, all my bosses at Citi have been supportive of my ambitions. I think working across different job functions and markets helps to develop stronger leaders and  progression within the company.”

Citi employees can look forward to not just a job, but a long-term fulfilling career that could take them anywhere in the world..  The 2+2 programme allows employees to apply for internal transfers every two years, and leave their current teams within two months if they  secure a new job elsewhere in the firm. There is also  a leadership development initiative, called LEAD, that gives high-potential staff short-term work experience in other divisions – a trader could join the transaction banking team, for example.

“I’ve enjoyed helping some of the people I manage to move into totally different roles within Citi because it keeps them motivated,” says Lee. “We believe in equal opportunity for all employees – everyone is eligible for mobility. Being adaptable and having the right capabilities is what counts and will help create opportunity

“For expatriates like me, one of my key priorities is to  grow local talent. I  counsel all my foreign managers to ensure that having strong succession plans in place, including local talent, should be their ultimate objective.  – If you don’t have someone earmarked to replace you now, you’d better have in three to five years. It’s about creating a strong bench, just like you would at a football club,” he adds.

Evidence of this can be seen in the  increasing number of locals who are moving into leadership roles in Malaysia. Identifying top performers from the Citi management associate programme is an important way of building a strong talent pipeline, says Lee.

Lee’s vision for Citibank Berhad is already bearing fruit. Staff retention rates have improved as has workforce satisfaction, according to the bank’s latest employee survey. Last year Citi also won best retail mobile banking experience in Malaysia at the Asset Asian Awards, and was named world’s top consumer digital bank by Global Finance.

“It’s great to be receiving these ongoing accolades,” says Lee. “They are recognition of how far we’ve come as a bank in Malaysia and what our employees have achieved over the past few years. Now we look forward to welcoming   new talent on board  to help us take Citi to even greater heights.”

Morning Coffee: Goldman Sachs associates’ weird weekends. Deutsche Bank curtails perk

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If you’re an analyst or associate at Goldman Sachs these days, you get Friday nights off. Some Goldman juniors are said (by others) to spend their weekends in states of mild debauchery.  Others catch up on sleeping. Others spend their time….making dog food.

Goldman associate David Nolan and analyst David Glynn fell into the latter category. Inspired by a flatulent family dog whose digestive problems disappeared when fed home-cooked food, they began spending their weekend away from Goldman preparing dog food, and not just for “Rudy”.

“We were leaving work on a Friday, cooking dog food Friday night, packing it Saturday, and delivering to the dogs of friends and family,” Nolan told Business Insider. “It was a basic homemade recipe — one protein, one carb — and Rudy’s problems seemed to drop away…” They started working with paying customers and,  “more people kept coming.”

The resulting dog food business, Butternut Box, was so successful, that Nolan and Glynn eventually left Goldman and made a go of it with funding from two of their former GS bosses. Nowadays they don’t have to work weekends, have 12 employees working in a 3,500 foot factory producing the food during the week, and have raised £1m in seed funding to expand further.  As banker side-gigs go, Nolan and Glynn’s was one of the more unusual ones, but they’re not alone: Michael Rose, a former analyst at Morgan Stanley went to work for Berlin-based “Pets Deli” in March 2017.

Separately, Deutsche Bank may be rewarding its employees with additional holiday, but it’s simultaneously curtailinganother perk: Amazon deliveries to its London office.

While Jamie Dimon and Jeff Bezos get along well personally, J.P. Morgan does not accept personal deliveries at its office, and now Deutsche Bank is adopting that same policy, calling Amazon Prime a “scourge.” That is part of a broader plan to lessen the stream of vehicles arriving at its London offices, according to Financial News.

The good news is that the deliveries won’t be stopped altogether. All personal deliveries will in future be taken to a location offsite and then will only come to the office once or twice a day for people to collect.

Meanwhile:

Even as it prepares to open a new London office, Deutsche Bank is making preparations for Brexit. CEO John Cryan said that it was about to rebook the institutional clients in securities trading, which were previously looked after in London, in their computer systems to Frankfurt. (Handelsblatt).

McKinsey named Kevin Sneader its new global managing partner. (FT

Royal Bank of Scotland and Standard Life Aberdeen both revealed an acute gender imbalance between male and female employees’ pay. (Bloomberg)

Female fund manager bonuses in the U.K. are approximately 70% below men’s. (FT)

Hospitality in the City used to mean boozy outings to sporting events, but MiFID II requires that hospitality beyond a “de minimis value” has to benefit ordinary customers, so skittish high-rollers are turning down invitations, including those from a U.S. investment bank that couldn’t give away tickets to a recent NBA basketball game in London. (The Times)

Four traders charged in the U.K. for rigging interest-rate benchmarks at Deutsche Bank AG will escape prosecution after German officials refused requests to send them to London to face trial. (Bloomberg)

What causes wealthy Wall Street men and women to run, elbow and lunge for candy bars – and then pack them into boxes to be shipped home? (Bloomberg)

Former Credit Suisse investment banker Imran Khan, the chief strategy officer of Snap, got $100m worth of restricted shares last year and a $145m stock grant in 2015. (Business Insider)

The case of an investment banker who suffered severe brain damage following a heart attack will be heard by the U.K.’s supreme court in a test of whether judges need to authorize the withdrawal of life support treatment. (The Guardian)

Google is planning to double its 800-person workforce at a new three-building campus in Boulder, Colorado, featuring pinball machines, pool tables, a library with easy chairs, a climbing wall and a pizza oven in the cafeteria. (Bloomberg)

Here’s what it takes to be an official member of the top 1%. (Bloomberg)


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Five ex-Credit Suisse equity derivatives MDs founded a new hedge fund

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Five former senior Credit Suisse equity derivatives professionals have come together to set up a new UK-based hedge fund, Pluris Capital.

The five founders are: Eric Van Laer, Credit Suisse’s ex-head of capital development and investor services and structured equity derivatives sales; Anis Akl, a former CS senior equity derivatives trader; Mounir Elarchi, a former managing director, fund-linked products; Cameron Hedger, the ex-co-head of fund-linked products for Credit Suisse’s global solutions business; and Walter Rotondo, former head of European equity derivatives convertibles trading.

Pluris Capital was registered with the UK’s Companies House website in December 2017, but isn’t yet licensed by the FCA. While Akl and Hedger were appointed as the LLP designated members of the company on December 1 last year, Laer, Elarchi and Rotondo were appointed designated members this February.

Laer spent 14 and a half years at Credit Suisse and previously worked for Commerzbank. His LinkedIn profile suggests he left the firm earlier this month to join Pluris. Elarchi spent 15 years at CS and it’s not clear when he left. An LSE graduate Elarchi was a trader at Credit Lyonnais Securities prior to joining CS.

Akl, who led flow and corporate derivative trading for developed and emerging markets at CS, spent fifteen years at the firm. Before joining CS, he was an equity derivatives trader at Societe Generale for two years. He also worked at Commerzbank as a fixed income trader from 1998 to 2000, at about the same time when Laer was there. It’s not clear when he left the bank either.

Hedger ran the fund-linked products business at Credit Suisse and left after over a decade when the bank made cuts in December 2016. Rotondo, a long-serving Credit Suisse banker who joined in 2006, left Credit Suisse last year amidst the cuts that followed the arrival of Mike Stewart from UBS as the head of equities at the Swiss bank.

It’s not clear which strategy Pluris Capital will follow: the fund simply describes itself as a “private investment company.”


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Top quantitative trader quits Citi after bonuses

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A London-based top quantitative trader quit Citi after seven years earlier this month.

Jun Liu was Citi’s head of short-term interest rate trading quants. His Linkedin profile suggests he left Citi this month and is now a “stay at home dad” on gardening leave.

Liu started his investment banking career in 2009 at Barclays Capital as a quant developer and modeler for the fixed income aates business. One and a half years later, he shifted to Citi as the vice president for short-term interest rate trading in 2011 and became a director in 2016.

Liu completed his Ph.D. in Computer Science from the University of Manchester in 2007 and worked as a Marie Curie Research Fellow in Trinity College Dublin as well as a research engineer in computer graphics and visual effects company Foundry between 2008 and 2009.

Banks are having a hard time keeping quant traders despite offering generous bonuses. Last month, director of quantitative strategies at Credit Suisse Martin Priego Wood left the bank to join Eisler Capital. Similarly, Yashar Aghababaie, a managing director at Goldman Sachs, who led design and deployment of trading algorithms and risk management systems among other things, joined Chicago Trading Company in January. Both men left their respective firms before receiving bonuses for the previous year.


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The hottest new hedge funds in the U.S. – and who they’ve hired

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Despite industry-wide performance challenges and fee pressures over the past few years, there were plenty of new hedge funds that debuted in 2017, and many new launches announced this year already.

Ex-GLG Partners and Moore Capital star trader Greg Coffey, who retired at the age of 41, is preparing to launch Kirkoswald Capital Partners, which will be headquartered in London but have offices in New York and possibly Sydney.

Ex-Goldman Sachs and MF Global CEO and former New Jersey governor Jon Corzine is returning to Wall Street after seven years in exile with a new macro hedge fund, and he has been making senior hires, including ex-Taconic Capital Advisors investment director Richard Chappelear as co-CIO and portfolio manager.

Ex-Viking Global Investors investment chief Daniel Sundheim, ex-Millennium Management fixed income head Michael Gelband and ex-S.A.C. Capital and Point72 founder Steven Cohen, the billionaire who is no longer barred from trading client money, are the other biggest names launching hedge funds soon. However, smaller fish are entering the pond as well.

Here’s a roundup of the hottest new hedge funds that have launched (or announced their plans to launch) this year and examples of who they’ve hired so far.

New hires at hedge fund launches announced so far this year

The following are just a sampling of new hedge fund launches announced last month, many of which are hiring in the New York tri-state area.

Ex-Tradeworx CIO Mani Mahjouri’s Redbank, New Jersey-based Blueshift Asset Management launched earlier this month with more than $300m under management and recently got an investment from New York-based private equity firm White Oak Equity Partners. In October, Blueshift hired ex-Blackstone and Cardo Capital Management COO/CFO Michael Zecher as CFO. In December 207, it brought on ex-Tradeworx MD Dmitry Sarkisov as COO/CCO. And in January 2018, it hired ex-Tradeworx MDs Lewis Hyatt as CTO and Scott Kornblum as chief security officer, ex-Tradeworx CTO Georgios Choudalakis as a senior strategist, ex-Tradeworx AVP Fen Fu as a strategist, ex-Tradeworx quantitative analysts Priyesh Patel, Pavel Bachurin, Fabio Rocha and Xiaoming Zhong as strategists, and ex-Tradeworx business analyst Corey Dean.

Ex-D.E. Shaw trader Parvinder Thiara launched Athanor Capital, a discretionary relative value hedge fund, and hired several U.S.-based ex-Brevan Howard employees, including Gabriela Teodorescu Bockhaus as the head of business development and risk management professional Ela Maksymiuk. In September, the firm hired ex-Balyasny executive Mudit Gupta as the head of operations. In August, Athanor hired former Jadara Capital partner Tariq Musa as the head of equities and ex-Deutsche Bank executive Maisha Rashid as the chief of staff. In July, ex-YipitData senior software engineer of data products Shaun Viguerie became the head of technology. In April 2017, ex-D.E. Shaw SVP Hilario Ramos came on board as COO/CCO. Senior strategist Preston Schiroky, formerly with UBS, Deutsche Bank, Cantor Fitzgerald and The Midway Group, and ex-Caxton and Vermillion trader Neel Rai also joined the firm last year.

Ex-S.A.C. Capital analyst Norbert Gottesman launched New York-based Triple Gate Capital, long/short equity healthcare-focused hedge fund, toward the close of 2015, but he is just now opening it to external investment.

New York-headquartered Mudrick Capital Management, which currently manages $1.8bn in distressed and event-driven credit strategies, recently launched a new fund to invest in senior secured debt from distressed companies. In July 2017, John O’Callaghan joined the firm as general counsel/CCO. In April, Beau Harbor, formerly with Credit Suisse, Citadel and Mount Kellett/Fortress Investment Group, became an MD-level senior analyst at Mudrick and ex-Lazard and Brookfield Asset Management senior associate Eric Heiman joined the firm as an investment analyst. Last March, it hired ex-BlueMountain Capital Management head of platform distribution Katherine Rynone as a business development and investor relations executive.

On New Year’s Day, Brigade Capital Management launched the Brigade Calvary Fund, a long/short equity fund targeting highly leveraged companies. In September 2017, it hired Marielle Bush, previously with Goldman Sachs, Merrill Lynch, GoldenTree and Hutchin Hill, as director of marketing.

After BP Capital founder T. Boone Pickens announced that he will convert his investment firm into a family office, ex-BP head trader/PM David Meaney and co-CIO/principal Brian Bradshaw left its energy hedge fund business to become co-founders of Dallas-based Assert Capital Management.

Ex-Scopia Capital Management analyst Connor Haley ponied up $10m of his own money in preparation for the launch of Alta Fox Capital Management, a long-biased small- and micro-cap-focused hedge fund based in Fort Worth, Texas. The firm has not announced any hires yet.


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Jeremy Corbyn’s Brexit speech won’t do anything to secure banking jobs

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As is probably appropriate for someone who has declared himself a “threat” to banks, which he accuses of being, “destructive”, “pernicious and undemocratic”, UK Labour leader Jeremy Corbyn’s speech on Brexit today offered little solace to anyone concerned that their banking job will move out of the UK after Brexit.

Corbyn’s speech was notable for its omission of any mention of the financial services sector which generates around £70bn of UK taxes annually.  – In a nearly 5,000 word speech, his only reference to banking was in the context of market failure. “The free market has not worked in the banking sector. It has not worked in the water industry. It has not worked in the energy utilities. It has crashed in out-sourcing and it has failed our fragmented railways,” said Corbyn – thereby categorizing the banking industry with three other industries which the Labour party intends to nationalize if elected.  

Finance professionals in the wealthy London borough of Kensington voted for Corbyn’s Labour Party in June 2017 in the hope of averting hard Brexit under the Conservative Party. While the Conservative government has reportedly told senior bankers it will put financial services at the heart of a new EU trade deal, however, Corbyn’s speech today implied that banks could be left in the cold if Labour is elected.

Corbyn used his speech to criticize the Conservative government for being overly, “concerned about cutting deals with each other and for their friends and funders in the City.” Instead, he said he plans to cut a Brexit deal that,”offers security to workers in the car industry worried about their future, hope to families struggling to pay the bills each month and opportunity to young people wanting a decent job and a home of their own.”

Corbyn’s emphasis on protecting manufacturing jobs was also reflected by Labour’s new support for remaining in a permanent customs union after Brexit takes place. In today’s speech, Corbyn mentioned the customs union seven times, whilst only fleetingly referencing the far broader single market (which he said vaguely that Labour wants to ,”maintain the benefits of.”) “The customs union is just about the trade in goods and not in services,” says the head of one financial services think tank in the City. “If the UK were to find itself in an EU customs union without a broader agreement on financial services, it would certainly have an impact on the banking industry in London.”

“Membership of a customs union in itself would do nothing to solve the problems facing the UK’s financial services industry after Brexit,” agrees Peter Bevan, global head of the financial regulation group at law firm Linklaters. “The financial services sector is more focussed on continuing access to the single market, or a licence to cover the provision of those services.”

Meanwhile, there are signs that some finance firms are going ahead with contingency plans. Goldman Sachs has begun making equity sales hires in Paris, for example, and Aberdeen Standard Investments has opened a new EU base in Dublin. 


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Does Goldman Sachs now pay its tech juniors more per hour than its bankers? Looks like it

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If you want to earn good money in an investment bank and to have a life, you might want to work in an investment bank’s technology division. As banks try to hire and retain thousands of STEM students, tech teams suddenly offer a very appealing effort to reward ratio. Or, Goldman Sachs does, at least.

So suggest new figures for working hours and compensation for 2018 published on the investment banking forum Wall Street Oasis. WSO’s sample size isn’t huge. Nor is it validated by the banks concerned. As a perspective into new pay practices at investment banks it is, however, “interesting”.

Despite attempts by Goldman and other banks to cut juniors’ working hours in investment banking divisions (IBD), WSO’s figures suggest the reality for banking juniors is still harsh. First year analysts in IBD at Goldman Sachs and Bank of America both said they’re working between 75 and 90+ hours every week. Technology jobs in banks look like a doddle by comparison: tech juniors at Goldman in New York and in London both said 45 hour working weeks are the norm.

The upshot is that some first-year technologists at Goldman Sachs now say that they earn more on an hourly basis than first some first-year investment bankers do. WSO’s figures suggest that average compensation for a first-year tech analyst at GS is around $78k for 2018. This follows Goldman’s decision to increase pay for its entry-level technologists (allegedly to around $100k) last year. By comparison, average compensation for a first-year in investment banking is around $122k.

With tech analysts working around 2,160 hours a year to IBD analysts’ 3,960 hours, technologists look a lot better off on an hourly basis.

Of course, this may not last beyond the first year. Pay for front office investment banking jobs famously increases exponentially and junior bankers are likely to earn more than junior technologists from years two and three on. However, it should give students contemplating banking careers pause for thought. Compared to technology, front office IBD jobs already aren’t quite as appealing as they used to be, and with banks like Goldman going all out to hire-in STEM students as engineers, technologists in banks are only likely to get paid more in future.


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