eFinancialCareersEnglish (UK) – eFinancialCareers

If you work in a front office job in an investment bank and are unhappy with your pay, your hours or your prestige, you should try being a personal assistant. I am the PA to a managing director and his team of around 40 people. It is a mostly thankless task, but one with anthropological upsides.

As you sit there on the trading floor, safe in your six figure salary and your similarly sized bonus, you probably don’t realize that a lot of us PAs are hired on a contract basis. – This isn’t a full-time secure job for us and we therefore don’t get any of the perks that you get (I’m talking private heath insurance and a pension). As contractors, we’re not part of the bonus pool. And even if we’re not contractors, our bonuses are usually tiny or non-existent.

However, I’m not a PA in a bank for the money: I’m a PA for the people-watching. You may not see me, but I see you.

Firstly, I get access to the MD’s inbox. I arrange meetings for him and I delete his irrelevant emails. I also get to read things that the rest of you never see and that you never know about. I see your compensation numbers. I know which of you are to be made redundant. I see the topics that senior management are discussing. Sometimes I’m conflicted: a friend of mine was on the redundancy list last month; I said nothing.

I see some of your relationships and I see all of your spending habits. I have been asked to book lunches for senior bankers and their girlfriends, and I have been asked to book lunches for the same senior bankers and their wives. I am often asked to process expenses: I know who goes over-budget; who likes to eat at expensive restaurants, who is frugal.

At times, I am made party to your medical issues. We had an MD fly in from New York with a bad stomach. Guess who bought the medicine for his diarrhea? Some of you ask me to book your taxis and your cars: I am your concierge. Others of you endlessly ask me to change your plane tickets.

For this, I get a salary that is a fraction of your own, plus – usually – a generous Christmas present that reflects your quiet appreciation during the year. I’m sometimes asked to attend client dinners (so that there’s a female face) and I get the occasional advance from those among you who spend so much time in the office that any encounter with an apparently marriageable woman must be leveraged. I’m sometimes flattered. I always say no. I know what bankers are like; I have no urge to spend more time with them.

Sylvie LeGaz is the pseudonym of a PA at a US investment bank

Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com
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If you want to get in from the start as Goldman Sachs expands its Frankfurt office, we can point you in the direction of an executive director (ED) who has turned up in Frankfurt to grow the Goldman team.

The ED in question is Alexander Kretzberg, a fast-tracked Goldman Sachs ED who spent six years in London before arriving in Frankfurt two months ago. Kretzberg says his mandate is to grow the financing group within Goldman Sachs’ investment banking division for Germany, Switzerland and Austria.

Goldman Sachs’ financing group deals with acquisition financing, derivatives structuring and risk management for large and medium sized organisations, private equity funds and institutions. Goldman executives have regularly discussed the potential for big growth in the German market as the country moves away from a financing system based upon loans, to one based upon the “disintermediation” of Germany’s traditional banking sector and a shift towards capital markets.

In this sense, Kretzberg appears to be on the front line of Goldman’s German expansion plans. GS says his arrival in Frankfurt has nothing to do with Brexit – although he may well count among the more than 400 people whom the U.S. bank is understood to be moving out of London as a result of the U.K. leaving the EU.

As we’ve noted before, Goldman doesn’t have very many managing directors in Frankfurt, making it a good place to go if you want to get ahead. Kretzberg already seems to be on a fast-track with the firm: he joined in 2012 after graduating in the top 2% of his class from German business school WHU and was made executive director (one rung below managing director) last December.

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If you’re interning at an investment bank, Wall Street is the place to be. Analysts arriving at top Wall Street banks this summer tell us they’re earning far more than their counterparts in London.

The going rate for this summer’s front office Wall Street interns seems to be $85k, pro-rated over the eight or 10 week period. In London, interns tell us it’s closer to £50k ($66k), meaning that Wall Street interns are earning 29% more in dollar terms.

The discrepancy partly reflects the value of the pound, which has declined 30% against the dollar since 2013. However, it also indicates that U.S. investment banks are making the most of the pound’s fall and are paying their London interns in sterling terms only. This is in contrast to U.S. law firms, which pay their London juniors dollar-denominated packages that have risen significantly in recent years.

If front office interns are being handsomely paid, the same is not necessarily true for interns in other areas. Although banks like Goldman Sachs and Citi have hiked compensation for junior technologists, some of the technology interns we spoke to at other banks in London said they were being paid closer to £42k ($55k) (pro-rated).

In ‘near-shored’ technology locations, pay for interns is even lower: some interns at Barclays’ technology office in the UK’s Northampton are paid as little as £38k, pro-rated. And some interns at Deutsche Bank’s Jacksonville technology office say they’ve received as little as $8 an hour.

The ‘future of work’ is top of mind for many sectors across the market, and both employees and employers are being asked to think about the capability requirements needed to stay relevant and sustainable in tomorrow’s marketplace. The assessment industry is now starting to harness artificial intelligence (AI) to help recruit talent.

ANZ has started working with two assessment partners to use AI and machine learning to find the best candidates in a fair and unbiased way for its roles. The technology is being used to build predictive models, based on ANZ’s existing employees and their performance data, to assess how aligned potential candidates’ capabilities are to specific roles.

Michelle Hancic, Head of Assessment at ANZ, says: “When we started looking at using AI in recruitment and assessment, it was really around wanting to improve the candidate and Hiring Manager experience by using fewer, more accurate assessments to increase the accuracy of our hiring decisions.”

She explains that the partners ANZ is working with are not only looking at whether candidates provide the right answers to questions, but they also capture millions of other data points, such as how long it takes candidates to respond and whether they are learning from the feedback they are getting through the assessment.

“AI allows us to use a wider range of data and integrate that to form a much richer picture of the candidates. “You might need a 25,000-question test to collect the same data that you can in a 20-minute assessment, it is so much richer,” she says.Unsurprisingly, many potential employees are nervous about the use of technology in recruitment.

Hancic sympathises, and genuinely believes that AI improves the process for both the organisation and the candidates themselves.

“No-one likes to be assessed, especially when there’s a job at stake, but the benefit of assessment is that both the hiring manager and the candidate actually learn more about each other through the process and therefore make a more informed decision around whether this role and organisation is right for that particular person,” she says.

“Sometimes people see technology as a blocker, stopping them from getting the job they want, but you have to see it as helping you to get the right job for you. Hancic acknowledges there is also a fear of the unknown and apprehension that a machine will be making the final hiring decision.

She explains that while that is not yet the case, research has shown that the models being applied to AI recruitment are far more accurate and bias-free than humans.“If I had a choice between someone reviewing my CV and making selection decisions based on that, or having a decision based on AI, I would go with AI every time because you can be more comfortable that the results are aligned with what makes people successful in the role,” she says.

Another advantage of the technology is it increases efficiency, enabling managers to do their job quicker, which in turn means candidates do not have to wait as long for the outcome of their application.

Hancic adds that the technology can also provide candidates with a much better experience, creating video introductions to assessments, giving candidates a greater insight into the position, and even providing real-time feedback on the process.Technology also has a role to play as employers move away from only assessing candidate’s technical skills, to looking at other things that are harder to identify.

Hancic explains recruiters are increasingly interested in attributes such as ethical decision-making, curiosity, complex problem solving and creativity, as well as emotional intelligence and organisational culture fit. She says: “The recruitment focus is very much shifting from people who can do the job today, to selecting people who have the mindset and capability to evolve with the organisation and be successful in the jobs of tomorrow.”

With this in mind, ANZ also uses psychometric testing to help it determine candidates’ workstyles and preferences, as well as to learn what motivates and inspires them, to help it find candidates that have the capability to grow and evolve with it.

Hancic acknowledges that some candidates are nervous about doing this type of personality profiling. “They think we will find something dark and sinister, but that is not the case. The assessment that we do in a recruitment context is very much about work style and behaviour, and they are what we call self-report measures, so we will only find out what you tell us about yourself.”

Hancic expects technology to continue to play an important role in the recruitment process.“I think assessments will get shorter and more targeted, and there will be a greater level of customisation – a trend we are already seeing playing out, particularly around short assessments collecting millions of data points,” she says.

“Assessments will also get better at engaging candidates through better interfaces, giving them more insight into a role and organisation.” She thinks they will also increasingly provide candidates feedback along the way, while the data gathered could be used to support candidates’ ongoing development once they are hired.

There is also talk of incorporating virtual reality into the hiring process to enable candidates to experience and engage in the work they would be doing if they are successful.

Image credit: getty

How much can a workplace really change in nine years? Fiona, a Senior Manager in our Audit team, talks about the tech transformation she’s witnessed since re-joining EY Belfast.

Spot the difference: the tech transformation of EY Belfast

When I started at my first audit job as a fresh-faced graduate with EY Belfast, there can’t have been more than five computers in the entire office. Naturally, I was given one – a perk of being the computer science graduate in the early 1990s.

Throughout my first 16 years here, I stayed close to the unfolding tech revolution. Then I changed course, leaving private practice to take on in-house roles, including CFO for a charity. But when I found myself sitting across from EY – the auditors on our accounts – I realised that there was only one place that offered the buzz I was looking for.

After nine years away, here I am – back at EY Belfast. The biscuits haven’t changed, but everywhere else I look it’s a different story.

The new frontiers of audit

Using advanced data analytics, we’re doing things we could only have dreamed of before. Going into a final audit meeting a decade ago, we’d be armed with a small selection of indicative items to comment on. Today, we’re able to give clients real insight through their data.

Recently, we showed the client exactly which staff members were publishing what documents over the weekends – useful insight they’d never normally have at their fingertips. Watching their reaction was quite incredible.

We’re working hand-in-hand with our data experts to build new levels of insight into the audit process. As part of this, I’m involved in bringing together different specialists across EY to learn from each other. It’s very exciting.

A hub for innovation

From data analysts to developers, I find myself surrounded by people with job titles that didn’t even exist nine years ago. A big reason for this is the investment EY has poured into Belfast as a hub for innovation.

Take our Delivery Centre, which builds the tools that bring ideas to life across our business (“everything from bots that draft letters to real-time reporting on traffic camera data”). We’ve doubled the number of staff here during the past nine months and now expect to do the same again.

A global outlook

This growth story at Belfast is evident in the diversity of our teams. You can hear it in the accents of people working around you. This is no longer a local office with local staff – it’s attracting people from around the UK, Ireland and the wider world.

Our client base is equally as global. The brands we work with are household names. Plus, we tap into the thriving entrepreneurial scene on our doorstep in Belfast.

A place to progress

Before I left, I was very involved with graduate recruitment. A real highlight for me has been bumping into colleagues I interviewed all those years ago, who are still progressing and enjoying their EY career today.

While all this transformation is exciting, it’s reassuring to see that not everything has changed while I’ve been away.

To find out more about EY in Belfast, click here

Lest we forget: most banks are still in cost-cutting mode. The bloodletting at Deutsche Bank has been the big news of 2018, but public pain at the house of Sewing isn’t the only instance of forced staff evacuations this year. Headhunters say most banks are letting people go, in blocks of four or five. – Quietly, while no one notices.

Credit Suisse is a practitioner of this method of headcount reduction. Under CEO Tidjane Thiam, the Swiss bank aims to cut another CHF200m from operating costs in its markets business this year. Three per cent of CS managing directors and directors were allegedly eliminated before bonuses were announced in February. Cuts were made to emerging markets and prime broking teams in New York in March. And now that it’s July cuts are being made again to U.S. prime broking again.

Bloomberg reports that CS is letting go of seven people this time around. They’re all in prime broking and include senior people like Tony Bertoldo (18 years at the Swiss bank) and Justin Carey (eight years at the Swiss bank). The exits follow the announcement last month that Ryan Nelson from UBS is joining Credit Suisse as head of global prime financing, and suggest that Nelson might be indulging in cutting ahead of upgrading. Either way, the ongoing trimming is a reminder of the new reality: just because you survive one round, don’t presume you’ve survived.

Separately, SocGen’s equity derivatives business is being held as a warning of what can happen when top talent leaves en-masse. So says an article in the Financial Times today, questioning what went wrong at a place that was once known as “the Goldman Sachs of French banking.”

By some measures things aren’t that bad at SocGen. The French bank still ranked second globally for equity derivatives in 2017 according to Coalition. It’s been making a push into fixed income as a foil to its dependence on equity derivatives and is a “cross-asset house.” But detractors point to the fact that equity derivatives revenues didn’t keep pace with rivals in the first quarter. A comparatively high proportion of people at SocGen aren’t happy with their pay, and costs in the fixed income unit are thought to be disproportionately high. Some insiders say things began to go wrong for the French when a generation of its top traders left 10 years ago.

“They lost some real leaders in the field who were instrumental in getting SocGen where they got to,” one equities professional who used to work at SocGen and who now works for a rival bank told the FT. “It’s a real real shame for the amazing franchise that they had.” SocGen’s lost talent is said to include Jean-Pierre Mustier, the current chief executive of Italian lender UniCredit, who has been touted as a potential CEO of Deutsche Bank or of a merged Commerzbank and Unicredit, or even Unicredit and SocGen. To the extent that SocGen has suffered from the exit of Mustier et al, maybe it could be reversed by a merger that brings the big man back?

Meanwhile:

U.S. hedge fund Varde Partners is expanding in EMEA. (Hedge Fund Intelligence)

J.P. Morgan is losing share in high yield bond underwriting. Barclays is gaining. (Seeking Alpha)

Barclays is thinking of going back into South Africa. (Financial Times)

Between 1997 and 2010 the UK finance sector’s productivity soared almost 6% on average every year, between 2010 and 2015 it was barely above zero. Blame all the extra control staff. (Bloomberg)

Advice to interns: “Treat your immediate bosses like the one and only God. “ (LeQuynMai)

Want a job in big tech? Forget big universities and try apprenticeships or two year courses at community colleges partnering with the likes of Amazon, IBM (and Credit Suisse). (Wall Street Journal)

Rise of the bullsh*t job: “A lot of workers in middle management, PR, human resources, a lot of brand managers, creative vice presidents, financial consultants, compliance workers, feel their jobs are pointless.” (Economist)

The joys of cognitive appraisal: try to experience pain and fatigue in a dispassionate way and you’ll feel much better for it. (British Psychological Society)

Naked, foraging, hermit prised from island utopia. (Gizmodo)

Ex-Goldman Sachs EMEA CIO now volunteering at fintech start ups. (WSJ)

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Barclays has hired one of the top financial sponsors bankers from Citi as it continues to grow its investment banking business.

Johannes Vavrovsky, who had been with Citi Group for the last 13 years, joined Barclays as a managing director in its London office in June. While at Citi, he was with the bank’s European alternative asset group, Citi’s equivalent of a financial sponsors division.

Vavrovsky began his career as a consultant for IT firm Cap Gemini in 2002 and left a year and a half later to pursue an MBA from NYU Stern School of Business. He landed a job with Citi Group in 2005 and rose through the ranks to become a managing director a decade later. Now he’s moving on.

Vavrovsky’s arrival at Barclays comes when activist investor Edward Bramson, who took a 5% stake in Barclays earlier this February, is aggressively pushing for closing down the bulk of trading functions at the British lender’s investment bank to cut costs and boost returns. Barclays let go of 100 directors and managing directors earlier this January, In May, it cut four senior people from its European credit trading team.

However, under pressure to deliver results, Barclays is strengthening its position by bringing in new talent, particularly in the investment banking division. Investment bank CEO Tim Throsby outlined his plan to increase revenues at the bank in September last year. Under Throsby, Barclays hired around 40 managing directors across its investment bank in 2017. So far this year, it’s hired around nine managing directors to its EMEA investment banking business, Vavrofsky included.

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Just how hot is the current M&A market? A financial services company known mostly for its credit cards is jumping into the game. Capital One has hired a managing director from Bank of America to launch an advisory business in New York.

Jeffrey Porphy joined Capital One this month as its new head of M&A. The company said in a statement to eFinancialCareers that Porphy will be focused on building an advisory business for its current commercial banking clients. Capital One has previously provided financing for deals but this is its first official foray in into pure M&A advisory.

Known more for its retail products, Capital One has been active recently in divesting from non-core businesses. It exited the mortgage industry in May after selling its $17 billion portfolio of home loans to a subsidiary of Credit Suisse. Capital One also sold off its asset and trust management unit in December while shuttering its retail brokerage business in a January deal with E*TRADE.

Meanwhile, the company has been slowly building up its capital markets team over the years, highlighted by its $9 billion acquisition of General Electric’s healthcare financing unit in 2015. The firm also built out its technology, media and telecom (TMT) lending business with a host of former GE Capital hires.

Prior to his four-year stint as an MD at Bank of America, Porphy was the head of M&A and financial sponsors coverage at JMP Securities, which specializes particularly in healthcare and technology. He previously worked as an MD at Cowen and Co. and Barclays after cutting his teeth for over a decade at Credit Suisse, according to LinkedIn.

Capital One didn’t provide any details on whether it will build a team around Porphy, but one would expect additional hires to follow. Global M&A revenue is up over 60% on the year.

Follow @BeecherTuttle

Have a confidential story, tip, or comment you’d like to share? Contact: btuttle@efinancialcareers.com
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There is apprehension on Bank of America’s London trading floor. Ever since the bank announced its intention of moving Sanaz Zaimi, its head of fixed income currencies and commodities (FICC) sales, to Paris last week, there’s been a realization that Brexit is deathly serious. BofA is not messing around.

“BofA managing directors are calling and saying they’re nervous,” says one senior fixed income headhunter, speaking off the record. “A lot of them don’t want to go to Paris, but they know that they may have no choice.”

Bank of America has a fancy Parisian office in an art deco building that was formerly a postal exchange in Paris’s eight arrondissement. The building can house up to 1,000 people, and although there has been talk of subletting unused space, Zaimi’s arrival – along with Vanessa Holtz as the Paris-based head of EU FICC and Othmane Kabbaj as the Paris-based head of EU FICC sales – is being taken as an indication that the migration of jobs to “La Poste” will be at the upper end of what’s possible. Some claim that the new Paris office will become BofA’s global hub for sales, with a big migration of jobs tabled between now and the end of the third quarter.

BofA isn’t commenting on its plans, but one senior BAML sales-trader in London says the expectation is that fixed income salespeople and traders will be moved first, with equities salespeople and traders to follow. “We’re expecting to be approached one by one and told the terms of our new contract,” he said, adding that a lack of communication from the bank is causing confusion. “I need to make plans because of my children, but we have been told nothing. I would prefer to move soon so that I can find a house and school before everyone else.”

Moving soon makes sense. Bank of America isn’t alone in shunting jobs to Paris this summer. Goldman Sachs said in June that it intends to move “tens of bankers” to the French capital before autumn comes. Bankers who arrive from London early should have first-mover advantage in terms of homes and education.

Some may be able to stay in the UK and to commute into Paris, or to work part of the week in both cities. BofA bankers with French ties reportedly have a history of doing precisely this. Sorbonne-educated Zaimi herself is understood to have had houses in Paris and London for some time, and Marc Tempelman, BofA’s former co head of DCM and corporate banking in EMEA (who left for a Paris-based start-up in January), is understood to have spent a few days a week working in London and a few days a week working in Paris for years.

With international schools in London suddenly emptying out, leaving the family in London could yet prove the best option. Some middle-office professionals at BofA tell us they’re already working partly in continental Europe and partly in London in preparation for Brexit. However, salespeople and traders who need to be in Paris early in the morning for the market open may yet decide they’re better off fully committing to the French city than flitting between the two. For them, this summer is unlikely to be spend on the Mediterranean. There is a lot to sort out.

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Remember Richard Gathercole? If you’ve spent any time in the London high yield market, you really should. Gathercole (who’s LinkedIn profile photo is Auric Goldfinger from the eponymous Bond film) has been in the markets for 36 years, many of them at RBS. Now, he’s returning to his roots.

After leaving his last role at Mizuho in October 2017, Gathercole is understood to be joining Natwest Markets (formerly known as RBS) later this month as a director of high yield sales. For Gathercole, it’s a homecoming to a bank which appears to have shaped his career.

No one knows exactly how long Gathercole spent at RBS in the unrecorded days before the internet, but the FCA Register shows him working at the British bank in 2001 (when the FCA Register began) and leaving in 2002. He then rejoined in 2007 and left in 2009, before going on to work for Hoare Capital and Mizuho, at which he latterly spent nearly seven years.

Natwest Markets declined to comment on Gathercole’s return. He’s understood to be reporting to Sean Finnerty in leveraged finance. Finnerty himself has worked in the markets for a mere 14 years according to his FINRA registration, and may therefore want to defer to Gathercole’s superior experience – particularly in a cycle of rising rates. Headhunters suggest NatWest Markets may have picked up Gathercole cheaply as he’d been on the beach for nine months, and counting.

Gathercole’s return follows various big hires to RBS’s London fixed income business last year. There have also been exits however: James Konrad, Robbie Anderson, Ian Walker and Biagio Lapolla all left the European government bond desk last month, with many of them now understood to be joining Nomura.

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Getting a job at a bulge-bracket bank is already a battle of wills. You’ll need the proper network, resume and people skills to earn an offer, after which you’ll have to dance through red tape from HR, including background, credit and employment verification checks as well as a drug test, more than likely. But if a global financial regulator (of sorts) has its way, the hiring process may soon feel more like a proctology exam.

Buried in the latest 70-page report from the global Financial Stability Board (FSB) are a number of rather specific recommendations surrounding the hiring process at banks that could create equal headaches for managers, candidates and human resources.

The FSB, tasked with monitoring the global financial system and making recommendations to regulators, is asking banks to consider conducting interviews with candidates that are separate from traditional sit-downs with hiring managers. Instead, they would be strict behavioral assessments that focus on previous conduct as well as hypothetical situations aimed at spotting potential red flags.

Admittedly, many of these types of questions are already being asked, but by hiring managers. The FSB guidelines call for having candidates respond to hypothetical ethical dilemmas from “trained observers” as well as employees who work in control functions, which may “send a signal” to candidates from the outset on the importance of risk and compliance. But control staffers would hold more than just a ceremonial role in the interview process. “Members of control functions could also provide an employer with an alternative view on the suitability of a candidate for a position,” the authors wrote. The potential involvement of organizational and behavioral psychologists was later mentioned.

Another recommendation includes the creation of more comprehensive databases on financial services professionals where firms could share information on past employees. The FSB also promotes conducting exit interviews with outgoing employees and maintaining records of those conversations that could be later viewed by competing banks.

Perhaps the most eye-opening suggestion is to have financial firms redo background checks on current employees at certain career milestones. The examples the FSB give are three months and one year following a hire, as well as when employees are promoted and even when they make lateral moves within the company. Banks may also want to routinely review voice recordings of client interactions and mine information from employees’ social media posts, according to the FSB.

Quite how this Big Brother-like behavior would sit globally with EU data protection legislation isn’t clear, but to some extent it has already been happening. Barclays, for example, installed heat and motion detecting sensors below bankers’ desks to see how much time they spend at their post. Other banks have at least tested predictive analytics software to identify whether employees are exhibiting odd behavior. Now, hiring managers may soon need to get the sign-off from a behavioral psychologist and a social media expert to make a senior hire.

It’s important to note that the FSB isn’t technically a regulator as it can’t impose mandates. It simply monitors the global financial system and makes recommendations to authorities and banks based on its research. Still, the FSB is chaired by Bank of England Governor Mark Carney and was once called one of the “four pillars” of global economic governance by former U.S. Treasury Secretary Tim Geithner, so it wields considerable power behind the scenes.

The bulk of the FSB report focused on the importance of assigning personal accountability to senior bankers to help prevent employee misconduct – a point that largely overshadowed some of the recruitment recommendations.

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You need to be academically excellent to get into Goldman Sachs. Whenever we’ve looked at the sorts of students who make it through Goldman‘s recruitment process they seem to have both exceptional grades and a list of prizes to their names. This is hardly surprising: with over 220,000 people applying for what are thought to be little more than 4,000 positions, academic achievement is a clear differentiator.

Fabrice Tourre seems to be one of these academically gifted sorts. After studying at the Parisian college Lycée Henri IV, followed by the elite prep school Lycée Louis le Grand, which also educated Jean Paul Sartre and countless French bankers, he went to prestigious École Central to read mathematics. Then he went to Stanford and studied a masters in management and engineering. Then he joined Goldman Sachs.

You might remember that Tourre’s time at Goldman Sachs wasn’t exactly shrouded in glory. Yes, he had a $4k a month apartment on New York’s 10th Avenue. Yes, he became a vice president and then an executive director (the latter in London, where he asked for a 20% rent cut to reflect the falling housing market), but Fabrice Tourre will mostly be remembered for being found guilty on six out of seven counts of mortgage fraud relating to the financial crisis and for writing that note to a girlfriend of the time (“More and more leverage in the system, The whole building is about to collapse anytime now! Only potential survivor, the fabulous Fab standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!”)

Five years on from the court case, and aged nearly 40, Tourre is undoubtedly a changed man. But he’s still the same impeccable student. And this academic brilliance seems to have been the foundation of a new career. The Wall Street Journal reports that Tourre has a Ph.D. in economics from the University of Chicago and is conducting postdoctoral research at Northwestern University. He’s also a teaching assistant for a course on asset pricing.

“The reason I picked him up [to be a teaching assistant] was because he was the top student when I taught the course the previous year,” says the professor on the course. “As a TA, you want to be empathetic and help the students, and he did that very well.” In this sense Tourre sounds like the model Goldmanite: excellent academics and an emotionally intelligent team player. What went wrong?

Separately, following last week’s allegations that an MD at a well known bank behaved inappropriately towards an intern, the bank says it’s investigated and found the claims to be unsubstantiated.

Meanwhile:

Sean Hodson, a former bank trader who joined various hedge funds, has reappeared as head of U.S. government bond trading at Citi. (Financial News)

Barclays is moving 40 to 50 London investment banking jobs to Frankfurt (Guardian).

Donald Trump’s plan to ban spouses of high-skill visa holders from working will likely push 100,000 people out of jobs. (Bloomberg)

Earn £1k a day as a “chief feminism officer” (Interim.Team)

Top lawyer at Morgan Stanley would like you to get involved with his very own political party. (Bloomberg)

Goldman Sachs no longer thinks the UK will win the World Cup. (Business Insider)

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Goldman Sachs is all about strats. Current CEO Lloyd Blankfein underscored the bank’s emphasis on quantitative strategists or “strats” in a presentation in February. Soon-to-be CEO David Solomon spoke about Goldman’s emphasis on quants and technologists in his own presentation in June. Other banks have been busy copying Goldman Sachs’ strats model. So, why would you want to be a mere trader nowadays when you could reinvent yourself at the highest level in the hottest role in the industry?

This may have been the thought process of Hamza Hoummady the former head of European rates and options trading at Barclays. As of this month, Hoummady is no longer a trader: he is a managing director in Goldman Sachs macro strats team in London.

Goldman didn’t respond to a request to comment on Hoummady’s arrival, but it’s a significant move both for Hoummady and the firm.

Hoummady himself studied the infamous DEA with Statistics course in Paris before becoming an equity derivatives quant at Calyon and then moving into rates trading. He’s therefore well placed to become the sort of macro strat who might be found sitting on a trading desk, creating quantitative pricing models and insights into market behaviour. At Barclays, he was working on new pricing formulas for swaptions.

Goldman Sachs, meanwhile, is building its strats team under Thalia Chryssikou, its London-based co-head of global sales strats and structuring across FICC and equities, and a former head of EMEA interest rates sales. In a post on Goldman’s own website, Chryssikou said in January that the firm is hiring a new generation of strats to apply artificial intelligence and machine learning to gain business insights. Chryssikou added that Goldman was as interested in experienced hires as hiring people out of college. Houdy appears to fall into the former category.

Goldman’s rates traders have a history of becoming interested in machine learning. David Ha, the bank’s former head of Japanese rates trading, is now a research scientist at Google Brain.

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Getting paid well in finance can often come down to timing. Bonuses and deferred compensation are weighted heavily and often vary significantly over long stretches due to factors unrelated to personal performance. Want to avoid becoming a slave to your bonus? Work at a regulator like FINRA that pays out big salaries and bonuses that bend but don’t break.

While authorized by Congress, the Financial Industry Regulatory Authority is a private non-profit that is not part of the government – a key distinction that enables FINRA, which oversees broker-dealers and exchange markets that pay it membership fees, to have more autonomy over compensation than other regulators. The end result: the average FINRA employee took home roughly $193k in pay in 2017, with several of its top execs netting over seven-figures, according to its latest annual report.

CEO Robert Cook is earning a $1 million salary for 2018 and was paid $1.35 million in incentivized comp in March for his work the previous year. That $2.35 million total will likely increase once deferrals and other compensation like multi-year retention payments are accounted for. Those payments netted Cook an additional $440k last year. As a point of reference, Federal Reserve Chair Janet Yellen makes just over $200k.

Meanwhile, FINRA CFO Todd Diganci has a $600k salary; CIO Steven Randich and chief legal officer Robert Colby each make $500k; and six executive vice presidents earn base salaries of between $365k and $450k.

Cook announced a freeze on salary increases in 2017 that continued into 2018 following a 6% drop in revenue and another round of public scrutiny over executive pay. (FINRA was heavily criticized in 2011 after acknowledging paying its now-former public relations head over $1 million the previous year). Compensation costs dropped by 7% in 2017, but there were no wild swings in incentivized comp like you’d see at a bank. And no executive took a salary cut.

All top execs other than Cook earned a bonus that fell within 12% of what they made the year previous. (Cook declined his bonus for 2016). While incentivized comp was down, top executives still took home bonuses that neared 100% of their base salaries, with deferred compensation and other benefits adding another $100k to $270k. Despite the recent changes, around two-thirds of FINRA expenses are still earmarked for employee compensation and benefits – a number that dwarfs comp ratios at most every financial institution.

The reason is that FINRA uses investment management and securities firms as benchmarks for its own pay policies. The organization said in its annual report that the philosophy is critical to recruitment and employee retention. Clearly, the policy is working. FINRA’s ability to retain top-level talent is eye-opening, particularly in light of the current salary freeze.

Diganci has been with the organization since 1995, before it was even known as FINRA. Thomas Gira, who oversees FINRA’s market regulation department, joined in 1992, while fellow VP Cameron Funkhouser started in 1984. At least half of Finra’s top execs have been with the organization for over a decade. Meanwhile, other regulators constantly complain about being chronically understaffed due to employee churn.

Interestingly, only one of the highest-paid executives has experience working at firm with an investment presence. Randich was the former co-CIO at Citigroup. The best avenue toward employment with FINRA seems to be through exchanges and law firms, though it clearly isn’t afraid to hire juniors and promote from within.

Follow @BeecherTuttle

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Thank goodness for MiFID II. The new regulations may be causing problems for some salespeople who can no longer persuade potential clients to even pick up the phone for fear of being charged, but they’ve also delivered a big advantage: the relentless cycle of client entertainment is fizzling out.

MiFID II comes with some strict rules on inducements. These followed the UK Financial Conduct Authority’s own restrictions on entertainment that doesn’t directly enhance the quality of service provided to clients. In combination, these two developments would always have made client entertainment less important than it in the past. However, the real blow has been MiFID II’s stipulation that trades must be executed in the most efficient way possible. It’s no longer possible to give business to a broker just because he or she entertained you the night before. And it’s therefore no longer worthwhile for brokers like me to bust their livers drinking with clients until 3am.

This is a good thing. Client entertainment can be both messy and exhausting. Restraint is often not an option: I have known head traders give business to brokers who injured themselves and ended up in an ambulance. This is bonding, at an intense level.

It’s bad for your health. In my career, the typical evening with clients began in a steakhouse, sushi or fusion-food restaurant and progressed to a bar or club in the City or Mayfair. Nights were long and the calorific intake was huge. Try staying healthy when you’re up until the early morning eating and drinking, and then sitting at your desk again for 10 hours from 6.30am.

There were times I didn’t go home. When you’re out late and you need to be in early, it can make no sense to commute back to London’s zone three. I have slept at work rather than waste valuable hours in a taxi: if you wake up at 5.30am you can go to the gym and shower before everyone else arrives. It’s not ideal, but it can be preferable to getting no sleep and no exercise.

Thanks to MiFID II, this is all in the past. I would like to compliment the regulators on rescuing my health and giving me my evenings back – and so would my family.

Bruno Beauvais is a pseudonym

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First Deutsche Bank. And now Nomura. 2018 isn’t turning out to be a good year to work on an emerging markets desk.

Following the exit of David Ishoo, whom Nomura hired from Goldman Sachs in March 2017 as head of CEEMEA credit sales, we understand that Nomura has now cut the roles of Waleed Haram and Jallal Koubiati, two long-serving emerging market credit traders who’d been with the bank for eight years and seven years respectively. Nomura declined to comment on the exits. The two men are understood to be at risk and still Nomura employees.

The cuts follow last month’s ejection of Fred Jallot, Nomura’s global head of credit and asset-backed securities in Europe, the Middle East and Africa, plus various other recently hired credit staff. They also follow cuts to Deutsche Bank’s emerging markets credit trading team.

Revenues in Nomura’s fixed income business rose 14% year-on-year in the most recent reported quarter, thanks to what the bank described as improvements in both rates and credit. However, the exits come after Nomura’s own credit strategists have warned against a rout in emerging markets bonds as borrowing costs rise and the dollar rallies.

Nomura made a big push into emerging markets in 2016 and 2017. Now it seems to be pruning the team back again. Not everyone’s left: Gokhan Buyuksarac, the top trader whom Nomura hired from Goldman last year and who heads the emerging markets trading desk is still in his seat, suggesting recent exits may simply be a culling of pre-existing staff.

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Bank of America has lost its head of rates analytics to TD Securities. Andrew Gunstensen was hired by the Canadian investment bank as its global head of FICC quantitative modeling and analytics. He’s working out of New York as a managing director.

Gunstensen spent more than a decade at Bank of America supporting their rates trading desks, analyzing and providing pricing on swaps, options, exotics, governments, futures, clearing and repo. At TD Securities, his team will cover rates, fx, credit, commodities and e-trading, according to LinkedIn.

While technically not a homecoming as he’s based out of New York, Gunstensen earned his B.A. from the University of Toronto before getting his PhD from MIT. Prior to Bank of America, Gunstensen spent 15 years at Morgan Stanley covering rates analytics as an MD. He also did some moonlighting as an adjunct professor at NYU for a few years teaching an interest rate modeling course.

This is at least the second big-name veteran Bank of America has lost in the last month. Jeffrey Porphy also left the firm in June to launch Capital One’s first-ever M&A advisory team in New York. It also lost a senior salesperson to Goldman Sachs in May. Across the pond, Bank of America has seen a deluge of exits from its European equity derivatives business.

TD Bank didn’t immediately respond to a request for comment on Gunstensen’s hire.

Follow @BeecherTuttle

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Barclays has been doing a lot of hiring. So far this year, the UK bank has added at least nine managing directors to its investment banking division in Europe, the Middle East and Africa. Last year, it recruited 40 managing directors and directors across its investment bank globally. Significant new hires are still being announced on an almost weekly basis as Tim Throsby, CEO of Barclays’ investment bank and Jes Staley, CEO of Barclays group, pursue their strategy of making Barclays’ investment bank great again.

But amidst all the happy hiring, there are signs of insurgency. Headhunters suggest that Barclays’ staff, particularly in the U.S., are resentful of the newcomers whom they suspect of arriving on inflated packages and of rewarding anyone they themselves recruit in a vein of equal generosity. “The old guard are super-p*ssed,” says one U.S. fixed income headhunter. “It’s not a happy place right now.”

Barclays declined to comment for this article, and it might be argued that headhunters simply like to stir discontent in order to pick-off top staff. However, some Barclays insiders agree with the prognosis. “There’s a different culture at Barclays now,” says one London managing director. “People are coming in on really huge packages and not many seem to be generating the returns that were expected. It’s a bit like being part of the AA [Automobile Association] – if you’re a new member you get a special deal, while everyone who’s been around for a while misses out.”

Who are the new guard? In the U.S. you might want to be in with Chris Leonard, the head of rates trading who joined in June last year after spending around 12 years in self-employment running his own hedge funds. There’s also Eric Childs, the head of U.S. macro swaps trading, who joined in September last year after four years at BlueCrest, and Michael Lubinksy, the former RBS trader who joined last year via hedge fund Brevan Howard. As if to confirm suspicions of Barclays’ generosity, Lubinsky spent $5.5m on a beachfront home shortly after joining the bank. Both Childs and Leonard previously worked for J.P. Morgan, along with Throsby and Staley.

In London, traders say the new turks are a clique of senior people who live in and around St. John’s Wood. They include Adeel Khan, a long-serving Barclays credit trader who has thrived under Throsby and was appointed global head of credit last September. There’s also Sharut Kalra, who joined from Goldman Sachs last year, and Asita Anche, the head of systematic market making who joined from Goldman Sachs last July. In equities, there’s Stephen Dainton and Nas Al-khudairi, both from Credit Suisse. “It’s no longer about performance. You have to be in with them – you have to kiss the ring,” complains the disaffected MD.

It probably doesn’t help that there have been layoffs alongside the recruitment. 100 Barclays’ managing directors and directors lost their jobs at the start of the year. There have been subsequent cuts to electronic sales and execution and to credit. There have also been voluntary exits, such as that of Hamza Hoummady to Goldman Sachs, and those gaps need to be filled – often at a premium to the rest of the market. “We have to pay more to get good people,” complains the MD. “- Everyone can see that the U.S. banks are increasingly dominant. Their home turf pays real money in fees, while in Europe it feels like a race to the bottom.”

Plenty of people at Barclays are happy, however. – When we ran our recent compensation satisfaction survey, people at the British bank were comparatively very contented with their pay, at least. Some insiders point to a refreshing commitment to the investment bank and markets business under Throsby and Staley after years of neglect under Antony Jenkins. Barclays’ first quarter results were good, particularly in equities, suggesting all the investment in new hires has been worthwhile.

Another longserving London MD says claims of disgruntlement are overdone: “You always get some complaints with new hires – it depends who you speak to. In general morale is fine right now and there’s not much grumbling. It helps that we got a fair few expensive people out the door at the start of this year.”

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“Here For A Good Time, Not For A Long Time”. The recent announcement that 50 posts at Nomura have been put at risk should remind us that the old T-shirt slogan can apply to markets jobs as well as to bikers and spring break students. It appears that some of the names on the list to be laid off include senior traders who were recruited comparatively recently. Omar Ghalloudi, for example, was only hired in 2017 (from Citigroup, where he was head of investment grade trading). He’s not the only recent hire from Citi to be leaving, either – Fred Jallot left in June, after less than a year.

When senior hires don’t last long, it’s not always a sign of anything deep seated – sometimes people’s faces just don’t fit, or their personal style fails to find a way to work with a new institutional culture. Nomura also had of a reputation for paying very well for people that it decided it really wanted (it even showed up in an Emolument survey as the best paying bank in London), and typically that sort of deal comes with some ambitious targets attached to it. If someone isn’t happy in a role, or if the franchise isn’t developing in the way that was envisaged, it’s often a lot better for all concerned to chalk it up to experience and part ways once more, rather than struggle on in denial.

That said, the turnarounds at Nomura have been quite noticeable. After building an equities business in the years to 2015, the Japanese bank pulled out of equities in 2016. It then built a proprietary trading operation, which subsequently closed down its proprietary trading operation. 2017 was all about emerging markets hiring, but the latest cuts include staff from the emerging markets desk along with some of their peers.

The fundamental problem Nomura appears to have had in London is that it wasn’t making money, which is always bad for employment prospects. The prop desk was closed down after some large losses, while the overall fixed income trading operation did not seem to be generating the revenues it needed to cover its cost base. There are also suggestions of surprise losses and compliance issues, all of which might have stood out when top management back in Tokyo were looking at half-year budgets.

Does this mean that Nomura was wrong to make so many expensive hires, or that people were wrong to join? Not really. Like everything else in markets jobs, it’s a risk versus return calculation. Joining an ambitious foreign player from a seat in a bulge bracket firm is always a decision that people make with their eyes open – if it goes well, you can get very rich and leapfrog a few steps up the promotion ladder. If it doesn’t, then in the modern world of investment banking you can no longer expect the overseas office to keep paying the bills. There will always be people willing to take the risk, simply because, as that t-shirt slogan reminds us, sometimes there are more interesting things in the world than career longevity.

Separately, in the more genteel world of investment banking, Javier Oficialdegui at UBS is looking out for 40-to-50-year old bankers, with continuity and relationships built up over the course of a career. The head of European investment banking thinks that these grey heads are undervalued in the industry , relative to energetic younger bankers. His strategy, according to his interview with Financial News, is to keep the older guys making deals, rather than putting them on a path into managing teams. In this way, UBS aims to compensate for the fact that it’s no longer able to bring a balance sheet.

Jefferies, for its part, conveys a similar message in a recent all-staff letter, but in a characteristically American way. At first glance, “Please Disrespect Your Senior Management Team” looks like a call to disruptive behaviour and valuing the exuberance of youth. But on reading the letter in detail, CEO Rich Handler is asking younger employees to “disrespect” the management by asking their advice and involving them in deals, rather than holding back from doing so out of concern for time and seniority. The common theme seems to be that, as Jeffries says, “You need to stay engaged in the trenches regardless of your length of service, history of success or job title”.

Meanwhile:

Karen Miles has been promoted to head of European high yield strategy at Credit Suisse. (Financial News)

UBS has created a 3D scan of its chief economist and linked it to a database of things he might say, to create a “digital avatar”. (AFR)

Panos Stergiou becomes head of institutional clients at Deutsche Bank fixed income, as part of a series of promotions. (Financial News)

Citigroup, possibly acting on the advice of Sherlock Holmes, say that traders are distracted during World Cup matches. (Financial Times)

The senior banker fired from BoA after #MeToo allegations is fighting back, suing for defamation and for his bonus. (CNBC)

Participation in some telecoms and media megadeals has pushed Robey Warshaw to the top of the M&A league tables, despite it being a boutique with only three partners. (Business Insider)

Everyone’s moving out of London. (Financial Times)

SocGen buys some commodity and equity trading businesses from Commerzbank, but not the cash equities brokerage. (Reuters, background in Les Echos)

App developers apparently have access to your Gmail account. (WSJ)

Bridgewater and Winton have registered to sell funds in China – this is a use-it-or-lose it authorisation which requires them to do something within six months. (Reuters)

Uday Furtado, a co-head of Southeast Asia at Goldman Sachs, has left for an ECM role at Citi. (Reuters)

Image credit: Herianus, Getty

The word is starting to go out. As March 2019 draws nearer and there’s still no clarity on the likely Brexit deal or on the extension of the transition period, banks are starting to review their contingency plans. Some London staff are being moved to Europe this summer. More will follow.

“Banks are beginning to have conversations with people on their trading desks as they seek to establish who might be open to a European move if necessary,” says Christian Robbins at Tradestone Search. “It’s still early days, but people are being asked to flag their willingness to go to Paris or Frankfurt.”

At some banks, small moves have begun already. Goldman Sachs has already declared its intention of shifting “tens” of staff to Paris in the next two months. After announcing last week that its global head of fixed income currencies and commodities sales is relocating to the French city, Bank of America is widely expected to begin shunting fixed income salespeople to the French capital soon.

Internal transfers are complicated. The pay differential between London and Europe means U.S. banks are often keen to avoid them and to grow their new European teams by hiring afresh in local markets. Goldman Sachs, for example, has built its Paris equity derivatives team with people like Guillaume Paulhac, who joined last December after leaving London 12 months previously – he was in Paris already.

However, there’s also an awareness that front office sales and trading talent in continental Europe will be hard to come by. Hence the internal moves. And hence some early mapping of employees at rival firms who might be willing to migrate from London for the right deal.

“We have already been asked to look for good salespeople in London who would be interested in moving to Europe,” says Kumaran Surenthirathas at Rosehill Search. “Most banks are initially exploring moving people internally. But if existing staff don’t want to go, then we will be engaged to look for replacements on a case by case basis.”

The upshot is that anyone in London who expresses a willingness to emigrate to continental Europe could soon find themselves popular with both their current employer and with rival banks courting their favour. “If you are willing to move, you stand to be in high demand,” says Surenthirathas.

It helps that not everyone wants to go, even if they’re French or German by birth. “My preference is to stay in London,” says one senior German equities trader, speaking on condition of anonymity. A German bond trader notes that moving to Frankfurt has traditionally been a career risk: “The most senior guys have always sat in London, and this has made it difficult to get ahead in Germany.”

As Brexit-moves pick up in pace, this could change. Already, there are signs that banks like Goldman Sachs are offering extra responsibility to London bankers who move to Frankfurt to build German-based teams. The historic dearth of managing directors at U.S. banks in European financial centres could work to early movers’ advantage: banks may promote quickly to fill gaps at the top of local hierarchies.

One London headhunter predicts that big titles will become a way to justify giving new arrivals from London more money than employees already in situ: “You can’t have a regional salesperson in Paris earning €120k base and then bring in someone from London on €180k base without giving the London person a bigger role to justify the discrepancy.”

Willingness to move to Paris, Frankfurt or Dublin could therefore become a way to secure a better job, with a bigger title, stronger promotion prospects, and at least equal pay. With school summer holidays in London about to begin, London bankers with families have reason to move soon. Their children may be less enamoured of the move though: Frankfurt school holidays began at the end of June; term starts again on August 15th.

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Wall Street interns receive far higher pay than the rest

Organisations are turning to Artificial Intelligence to improve their recruitment processes. Here’s how it can benefit candidates

How Technology transformed EY Belfast

Morning Coffee: Credit Suisse and the quiet layoffs. This is what happens to a bank when its top traders leave

Meanwhile:

Barclays poached a top financial sponsors banker from Citi

Capital One poaches Bank of America MD to launch new M&A business

BofA’s London markets professionals fear a Parisian exodus

Natwest markets just rehired an RBS high yield sales veteran (again)

The hiring process at banks could soon become a nightmare

Morning Coffee: Proof Goldman hires the best students, even if they’re not great employees. MD exonerated from touching intern

Meanwhile:

Goldman Sachs hired Barclays’ head of rates trading as an MD level strat

Want a huge salary in financial services? Work at this regulator

MiFID II saved me from a life of drunken debauchery

It’s a bad year to work in emerging markets at Nomura lays off traders

Bank of America loses senior quant to bigger role at TD Securities

Disgruntlement at Barclays as old guard said to resent influx of new staff

Morning Coffee: Nomura’s latest expansion goes into reverse with mass layoffs. Should investment bankers respect their elders?

The new hot profile in London banking: anyone who’s willing to do this

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