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Another day, another big move in emerging markets. As strategists at Bank of America warn of the potential for a correction as investors withdraw money that poured into emerging markets over the past two years, job moves in the sector seem to be speeding up.

In the wake of yesterday’s emerging markets layoffs at Nomura, BNP Paribas is understood to have lost Mary Egundebi, one of its top emerging markets salespeople in London. Egundebi had been with the French bank after joining from Barclays Capital in 2013. She is understood to be joining Standard Chartered, although this is not confirmed.

Egundebi’s exit comes as some banks are understood to be losing money on emerging markets desks, and staff are therefore fearful of poor pay at the end of the year. BNP Paribas built its London emerging markets desk last year with hires like Shokat Khan, who came from Cantor Fitzgerald, and Iftikhar Ali, who came from hedge fund Rhodium Capital Management.

Eyebrows have been raised at Egundebi’s alleged choice of Standard Chartered as a port in the storm. Insiders say that Matthew Dunker, an emerging markets trader hired in January 2017 from J.P. Morgan, has recently left, along with Paul Savini, the bank’s global head of credit trading in Hong Kong. Standard Chartered didn’t immediately respond to a request on the exits, but Savini is no longer listed as an employee and Dunker did not pick up his phone when we called.

While some banks are pruning emerging markets teams, others are hiring. Citi, for example, announced the hire of Michele Ferrulli from BAML in May. Ferruli is joining as managing director and Head of CEEMEA sales and sales trading.

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I’m in the wrong job. As a sales-trader in a bank I’m continuously told that my skills are on the way out. No one wants a human to read the markets any more. Everyone wants technologists – for some reason called engineers – who can write code to do the job instead. These engineers like to complain they’re not being paid enough. “How come front office people are still paid more than engineers?”, asked one on this site last week. Maybe it’s because we work a lot harder than you?

I work 12 hours a day. I’m in the office by 6.30am to establish what happened in Asia overnight and to prepare for the day. When markets close at 4.30pm I stay around to talk to clients and review what happened. This is not a nine-to-five job.

I also work fast. In my job, things are done with a sense or urgency. I am not proud of being in a hurry all the time, but it’s inherent in working on a trading floor. Markets move quickly.

In the technology team, I see a diametrically opposite approach. Our technologists arrive two hours later than me and they leave at least half an hour earlier. Their days are passed at a leisurely pace with a lot of surfing the internet. They’re always, “busy”, but there’s a lot of busy doing nothing. It’s like they have a different concept of time: one in which things are very slow.

The most surprising thing is that the bank seems to support them in this. While we’re being made to work faster to justify our existence, the tech team gets to wear hoodies and book tickets to music festivals on the company time. Management treats them like children: at J.P. Morgan they even get to draw on the furniture.

What’s worst, though, is their superiority. If you work in technology, you are cool. If you work in trading, you are not. A lot of these people seem to consider themselves overqualified for the jobs they’re doing here. Either that, or they just don’t like working because I see little sign of self-discipline or enthusiasm.

So, no – let’s not pay them more. Let’s pay them less and only reward them for their results. This is how it was in trading for years. If they don’t like it, they can try their luck at the Googles and Palantirs that probably won’t hire them anyway. And if they do like it, they can work harder and longer so that they deliver. Maybe they’ll start turning up 6.30am too? Then they can start talking about equal pay.

Cyril Lebrun is a pseudonym

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Some M&A bankers are having a busy 2018. In Europe, the Middle East and Africa, the value of M&A deals was up 50% on 2017 in the first half of the year, helped along by big deals like Bayer’s $66.3bn acquisition of Monsanto.

When you work in M&A, big deals don’t necessarily translate to big fees. While deals were up 50%, M&A fees were up only 18% and Dealogic says banks’ EMEA M&A revenues were up only 5%. Something got lost in translation.

In an article on the nature of the M&A profession, the Financial Times observes that M&A fees are tiny as a proportion of deal value and that the final payment for the deal covers long years of hand-holding ahead of it. ‘The average fee for selling a company worth between $10bn and $25bn is about 0.3%, and can cover years of unpaid work,” says the FT. This isn’t to say M&A bankers aren’t doing ok: in the case of Fox’s planned $71bn asset sale to Walt Disney, Goldman Sachs bankers alone earned fees of $58m. Not bad for a bit of advice.

How is that M&A fees haven’t been squeezed lower? Blame the febrile atmosphere in which M&A deals take place. The FT quotes a banker who says he and his contemporaries are like surgeons wheeling patients onto the operating table: the patient needs the best possible treatment and is in no position to quibble on fees. It helps too that the fees are paid with other people’s money – the acquiring company covers them in the asking price, and a few million is usually inconsequential.

How is it too that M&A roles haven’t been split into routine tasks and automated away? While this is happening with pitch-books and valuations at the junior end, the FT notes that senior bankers have a human factor that’s worth millions in the fraught conditions of a billion dollar company sale: ‘The senior banker’s tone of voice conveys a mixture of financial advice, human judgment and comfort.’

If you work in M&A – more than any other area of banking – you therefore need to stick around for the long term. Only as an MD are you really adding value, and only as an MD will you therefore get paid really big money. And at this point, you might want to make the most of your accumulated assets. “The boutiques are full of guys cashing in at the end of their careers,” one M&A banker tells the FT. It helps that leading boutiques like Robey Warshaw charge the same fees as banks, but with a far lower cost base. Some M&A bankers in big banks get a bit “sniffy” about this. Others are happy to see their counterparts monetizing their assets at ‘advisory kiosks’: “They get a bit of a free ride,” the big bank M&A banker says.

Separately, last year’s bonuses at Goldman Sachs continue to cause problems. Following various exits from the London rates and equity derivatives teams, in which poor bonuses were held partly to blame, Zerohedge says recent modest bonuses also precipitated exits from Goldman’s high yield desk. One of those to quit was Sam Berberian, a 32 year-old high yield trader who’s gone to run junk bond trading at Citi. It’s not clear whether Berberian’s exit was impelled by his bonus or the prospect of a bigger title elsewhere.

Meanwhile:

High humidity is slowing high speed trading in New York by impeding radio transmissions among three New Jersey data centers. It’s taking 8 microseconds longer to send information from Nasdaq’s facility in Carteret to the New York Stock Exchange. (Bloomberg)

To the extent that Bob Diamond’s Barclays had shared values, they were based around the pursuit of bonuses. (Financial Times)

James Boyle, Deutsche Bank’s head of Asian equities, resigned two years after joining from Citigroup. (Bloomberg)

More than 100 banks in the UK use passporting to operate in Europe, but only 20 have applied for a license to operate in the EU after Brexit. (Bloomberg)

UBS did nothing to support its junior trader in his recent LIBOR fixing trial – he had to fund his defence with profits from his burger restaurant. (Financial Times)

Hedge funds Bridgewater and Winton are opening in China. (Financial News)

Drinking eight cups of coffee a day may help you live longer. (CNBC)

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Promotions don’t seem to count for as much as they used to in investment banks. Managing directors promoted last November have been leaving Goldman Sachs, and now one of Credit Suisse’s top equity derivatives structurers in Europe says he’s resigned after receiving a big promotion a year ago.

Walter Cegarra says he resigned from Credit Suisse sometime in the past week. He worked for the bank for nine years after joining from Lehman Brothers in 2009. Cegarra didn’t respond to an inquiry about his exit.

Cegarra was promoted to MD at Credit Suisse in 2012 when he was head of EMEA product management origination for flow-linked products. In May 2017, he was promoted again to global head of quantitative investment strategies (QIS) structuring within Credit Suisse’s investment banking global markets solutions business. As such, he was responsible for all the Swiss bank’s cross-asset dynamic investment strategies, including fund derivatives, algos and quantitative investment strategies.

It’s not clear what Cegarra intends to do next, but his exit comes at a time when various banks are building both their equity derivatives and algo trading teams. Morgan Stanley, for example, poached two of Deutsche Bank’s most senior London equity derivatives professionals in June.

Credit Suisse has been building out its equity derivatives team under global head of equities Mike Stewart. In May, the bank appointed Anthony Abenante, whom it hired from KCG in 2017, as head of a new execution services unit combining program trading and electronic trading. CS has also suffered big losses from its equities team, though: Nas Al-khudairi, the popular head of electronic products, left in September 2017 and is now building the electronic equities business at Barclays.

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Facing stiff competition from thriving tech companies, many investment banks have had to open up their purse strings to land top-level interns. This is particularly true in the U.S., where Silicon Valley looms large. Wall Street firms are paying a premium for interns this year. Investment banks in London haven’t felt the need to do the same.

We went to Glassdoor to compare current salaries for summer analyst interns working in investment banking divisions (IBD) at 15 of the largest banks in New York and London. These are full-time summer analysts who are likely working 80-100 hours a week; we disregarded sophomore university students who may be paid hourly as well as interns who work in non-IBD divisions like technology and wealth management who tend to earn much less.

Looking at the numbers below, the most obvious narrative is that the difference in pay between banks in New York and London may be as wide as its ever been, even when taking into account the devaluing of the pound. Banks in New York simply don’t have much choice. Tech companies like Google and Facebook pay interns prorated salaries that top out at around $88k while offering way more perks and a better work-life balance. Many banks in New York have increased intern salaries to be on par with Silicon Valley.

In fact, it almost seems as if they came together and agreed upon a number. Seven of the 15 banks pay the average New York summer analyst roughly $85k, including all three domestic names you’d expect: Goldman Sachs, J.P. Morgan and Morgan Stanley. The surprise at the top is Deutsche Bank considering its recent decision to cut 1,000 jobs in the U.S., but offers were likely made before Deutsche announced its new strategy. Besides, cutting off the intern pipeline is a rare cost-saving measure.

Over in London, intern salaries are depressed by around 25% compared to their counterparts in New York. Big payers in the U.S. like Goldman Sachs and Credit Suisse are taking a more measured approach in London. Both banks also finished in the bottom-third when we did this exercise a year ago. Deutsche Bank and homegrown Barclays again led the way alongside RBC Capital Markets.

One note of possible interest: banks tend to advertise pay for summer analysts as prorated annual salaries rather than breaking out a lump sum for the full 10 weeks. It’s a more impressive sounding number and acts as a good starting point for potential full-time offers. But when you break the numbers down, summer analysts at top-paying New York banks will only make around $2.5k more during their internship than those at the worst-paying Wall Street banks. While that likely sounds like a lot of money to a student, it amounts to a drop in the bucket once their banking career gets started.

Source: Glassdoor

Follow @BeecherTuttle

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So you thought banks had stopped prop trading after the Volcker Rule?

You were wrong.

Big banks can always find away around regulation and for the moment – even while the Volcker Rule is being weakened – they’re doing this via their central risk desks. Don’t be fooled by the word “risk” in the name: a lot of these are actually prop trading desks.

Many are staffed with former star prop traders. These are people who know all about regulation and its circumvention. There are banks out there with huge central risk books – far bigger than you would have thought the case, and these books are quietly being used by the traders who run them to trade prop.

The secret behind central risk desks is client flow data. As the nexus of client activity, the desks have a high level of visibility across the market. They’re not supposed to trade against that data – and many are explicitly forbidden from doing so, but these are traders. They will argue that they need the data for purely analytical purposes (maybe in a “strategy group”) and yet quietly use it to trade against anyway.

I’ve seen it happen. Because central risk desks are automated trading teams, it’s possible for them to analyze the client data they have access to and to incorporate the signals they find there into their trading models. Central risk is classified as an “internal trading desk” and as such it can often bypass rigorous model validation and control processes. Ultimately, the danger is that central risk desks will reverse engineer clients’ transaction information and use it to trade against them. Needless to say, clients have no idea that this is going on.

It’s time both banks and regulators wake up to the dangers. For the sake of stability and transparency in financial markets, central risk books need to be very heavily regulated. Central risk desks are supposed to be about risk internalization and monitoring and as such they don’t need traders and trading “strategists”. The more traders and “strategists” they employ, the greater the likelihood that these desks will simply become a foil for prop trading and the inappropriate use of client data. You have been warned.

Seb Palowski is a pseudonym

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Two longtime Société Générale traders have left the bank. Olivier Blaise, SocGen’s head of volatility trading stocks and ETFs, and Benjamin Messas, head of exotic equity trading in the Americas, each exited in May, according to FINRA records. SocGen didn’t comment on the nature of their departures.

Both Blaise and Messas are SocGen lifers – literally. Messas has been working at the French bank since 2005, directly after earning his Master’s in Finance from Panthéon-Assas University in Paris. He has spent his entire career working for SocGen in New York, according to LinkedIn. Blaise, a managing director who has held a number of equity derivative roles, has been with the bank since 2000 after earning his own Master’s in Finance from École Centrale Paris. Neither has yet called another bank home.

The news comes just two days after Société Générale said that it will buy Commerzbank’s equity markets and commodities business as the German bank continues its restructuring. The departures are understood to be unrelated to this deal.

SocGen also lost its most senior credit trader in June. Laurent Henrio, global head of credit trading at the French bank, resigned last month and is said to be joining the buy-side, insiders told us at the time.

SocGen has been lightly trimming staff within its corporate and investment bank after promising “strict control on costs” during its first quarter earnings report. The bank had noted at the end of last year that it planned to expand in select areas, including in rates, FX and corporate equity derivatives trading.

Follow @BeecherTuttle

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Remember Alok Modi? He’s the Barclays trader who cunningly quit the British bank for Morgan Stanley in late 2013, just before Barclays began trimming its fixed income trading business. He’s just received another big promotion.

Insiders say Modi is moving to Singapore, where he will become head of macro trading for Morgan Stanley’s APAC business.

Modi joined Morgan Stanley in 2014 as head of government bond and CDS trading for Europe. In January 2015, he was promoted to managing director. Three years later, he’s now been promoted again – and been transferred to the other side of the world.

Modi’s move to Singapore with Morgan Stanley comes as banks like Goldman Sachs need to rebuild their London macro trading businesses following various exits earlier this year. It also follows Goldman’s addition of Hamza Hoummady the former head of European rates and options trading at Barclays, as an MD level strat at Goldman Sachs. Hedge funds Citadel, Balyasny and Eisler Capital are also building rates trading teams in London: someone like Modi is in demand.

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Internships are now in full swing, so let me tell you about my stint as a summer analyst at Goldman Sachs in Singapore back in 2017. You may want to draw comparisons with the bank you’re at now, or you may want to find out what’s in store if you’re one of the 2% to 3% of applicants who secure internships with GS in SG.

First up, Goldman being Goldman, I must have worked crazy hours, right? Actually, no. I usually started at 9am and finished between 9pm and 10pm. Goldman is trying to show that it’s serious about managing intern working hours in Singapore. Every day my fellow interns and I had to enter our hours into an HR system, and the HR team would alert our managers if they spotted us clocking 80-hour weeks.

Moreover, I never worked on a Saturday or Sunday during my Goldman internship, and there was never any pressure to do so. On the rare occasions I had extra work on, I just stayed late on a weekday evening. I may have had manageable hours because I had an equities-related job in the securities division rather than a role in IBD – there’s only so much you can do when the markets aren’t open.

But I think there was a more important reason. As an intern, if you’re always working past midnight and coming in on Sundays, it shows you’re not good at prioritising projects and managing your time. This is a bad thing.

In Singapore at least, time management is one of the rubrics that Goldman uses to assess interns. It’s not just about doing an excellent job; it’s about doing an excellent job within a certain timeframe and being able to prioritise your workload to achieve your main goals. This is what it takes to prove that you are ‘Goldman material’.

Other than having decent (but still challenging) hours, I found that I was landed with ‘real work’ during my internship. I learned about different equities products – from vanilla ones to derivatives – via working on trade execution and liaising with the front-office, the strats team, and our clients. There was no hiding out just in my department.

Singapore is far from being Goldman’s largest office and (perhaps as a result) I had ample contact with senior people across the firm here – VPs, directors, MDs, and even (once) the country head. I found the structure to be non-hierarchical and nobody appeared bothered by me asking them work or career-focused questions that weren’t related to my day job as an intern.

The biggest (and most pleasant) surprise I had during the internship was how all the interns got along with one another. I was initially expecting quite a toxic environment, with everyone competing for return offers and trying to impress the senior people. But it was actually quite collaborative and chilled out.

This may be a Singapore thing. Goldman only hires about 25 to 30 interns in total each summer here and most of them are deployed in separate teams, meaning that you don’t go head to head against each other. It’s probably different in larger offices, like New York and London, where a single team might have several interns.

This summer, I’m interning at a European bank up in Hong Kong and by comparison I think Goldman pumps more resources into its interns. For example, I had better access to business intelligence tools like Bloomberg Terminals at GS than I do now.

In summary, there’s a lot of support for interns at Goldman but making a success of your summer ultimately boils down to how you take advantage of this support. My key advice if you want to intern there is to look for problems to solve. Everyone at Goldman seems to run toward problems – you should to.

Josie Lei (not her real name) is a student at Nanyang Technological University in Singapore who’s currently working as a summer analyst in Hong Kong.

Image credit: RoBeDeRo, Getty

If it seems as if banks are dragging their feet with their post-Brexit plans, they are. An EU regulator chastised U.K. banks last month for their “inadequate planning,” telling them to “speed up their preparations” and stop assuming a last-minute deal between EU and U.K. authorities would be reached. Count J.P. Morgan as one of the few that actually listened, though it may have done so with a bit of an eyeroll.

J.P. Morgan has asked “several dozen” employees to relocate from London to continental Europe by the beginning of next year, and said it plans to “migrate or add” hundreds more employees to its EU offices before the March 2019 deadline. The memo, which represents J.P. Morgan’s first official Brexit-related communication to employees, provided a bit of good news for those who will be affected. The bank said it would increase its presence in cities like Paris, Madrid and Milan. J.P. Morgan was widely expected to push employees to the less desirable Frankfurt, Luxembourg and Dublin, locations where it currently holds banking licenses.

The “several dozen” in question will include mostly client-facing investment bankers and asset and wealth managers as well as those who work in risk management, according to the Wall Street Journal. Written with a rather compassionate tone, the memo appeared to suggest why banks have been so slow to make such decisions – and why J.P. Morgan has only contacted a few dozen employees and not the several hundred that would need to go.

“We want to avoid affecting the lives of employees and their families with changes that could prove to be unnecessary or premature,” the memo read. While a last-minute deal to allow financial firms in the U.K. to continue to operate as they do currently would likely be celebrated by J.P. Morgan and its rivals, none want to make dramatic changes to their staff if they ultimately weren’t required. The European Central Bank said yesterday that just 20 banks met the June 30th deadline to apply for a license to operate in the EU. Saying banks are dragging their feet may be an understatement.

Elsewhere, the Wall Street Journal just published a long expose on hedge fund titan David Einhorn, who has seen assets under management at Greenlight Capital drop by more than half as the firm has struggled with performance over the last three years. The piece provides a clearer window into what it’s like working for a hedge fund that once posted double-digit annual returns with ease.

While he can be difficult to deal with – sometimes insulting investment managers who hold dissenting opinions – Einhorn reportedly gives Greenlight employees plenty of outlets to blow off steam. Known for his penchant for poker, Einhorn whisks his staff off to annual gambling adventures in Atlantic City and Las Vegas – sometimes on a private jet – and doesn’t dissuade staffers from late nights at New York nightclubs. The hedge fund also hosted an annual poker tournament for employees, friends and clients, “where alcohol flowed and thousands of dollars changed hands,” according to the Journal.

“We worked hard and played hard,” one employee told the paper. The mood has likely soured a bit over the last three years with Greenlight posting a double-digit loss against the S&P’s 38% gain.

Meanwhile:

London boutique Robey Warshaw has advised on just a handful of deals during the first half of 2017, yet it owns a 20% market share in the U.K. The three-partner firm has a knack for advising on some of the largest M&A transactions. (Business Insider)

Former Harvard University president Drew Faust has been named to Goldman Sachs’ board of directors. (Bloomberg)

Swedish bank SEB is hiring 100 people a month, mostly in technology. (Bloomberg)

Google Cloud COO Diane Bryant has resigned after only seven months on the job. Speculation is mounting that Bryant could be in line to be the next CEO of her former company, Intel, though insiders say Bryant also struggled to find her role at Google. (Business Insider)

The chief executive of Allianz Global Investors is “very worried” about London’s ability to attract top graduate talent post-Brexit. The City may soon see a “brain drain…of the best and brightest.” (FN)

Deutsche Bank’s stock has been so battered that it may soon get booted from a key Euro stock index. (Bloomberg)

Morgan Stanley’s top lawyer is working to create a new political party in the U.S., the Serve America Movement (SAM). Eric Grossman hasn’t offered much detail on the party’s political and social leanings, but that hasn’t stopped him from eliciting big donations from Morgan Stanley veterans. (Bloomberg)

Dealbreaker is disputing a Bloomberg report that Credit Suisse is “wrapping up” its investigation into claims that an MD acted inappropriately with an intern at a company event. Dealbreaker, which broke the news last week, says the investigation hasn’t been concluded and the disciplinary process hasn’t even begun. (Dealbreaker)

Follow @BeecherTuttle

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People keep leaving hedge fund Millennium Management (AKA Millennium Capital Partners in the UK). The latest to disappear is a 38 year-London portfolio manager who’d been there since 2012.

Insiders say that Neil Smith a top relative value trader who previously spent six years with RBS in London and New York, resigned on Monday. His destination is unclear. Millennium declined to comment.

The suspicion, naturally, is that Smith is off to join former Millennium trader Michael Gelband at ExodusPoint, the new $8bn hedge fund which has been hoovering people up from across the market. ExodusPoint, which already has over 125 employees – mostly in New York – opened a London office in April 2018. In New York, Gelband has been hiring various of his former Millennium colleagues amidst rumours of exceptionally generous multi-year pay packages. In London, however, headhunters working for ExodusPoint say Gelband is inhibited from hiring his ex-colleagues by a restrictive covenant, and that while the packages on offer may involve accelerated vesting of past bonuses, multi-year guarantees are not on the table. Nonetheless, ExodusPoint is understood to be Smith’s intended destination.

Smith isn’t the only trader to have left Millennium this year. Since January, six traders have left for Albar Capital, a long short equity hedge fund set up by Javier Velazquez, another ex-Millennium portfolio manager. Albar is backed by Millennium, however, while ExodusPoint is not. Like many other hedge funds, Millennium also has a reputation for ruthlessness with under-performing staff. The Financial Conduct Authority (FCA) indicates that at least eight people have left since the start of the year without other jobs to go to.

The most recent accounts for Millennium Capital Partners LLP in London indicate that the fund made a profit of £105m ($139m) for the year to December 2017, up from £94m a year earlier. The highest paid partner earned £7m, while the other 11 partners were paid £1.1m each, down from £1.4m the previous year.

Smith isn’t the only hedge fund PM on the move. David Curtin, who left BlueCrest in May, is understood to be joining Graham Capital soon.

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When you lose your job at an investment bank – or any other organisation in the UK – it’s rarely a smooth process. Instead of simply being let go, employees in the UK are entitled to a consultation period. Depending upon the number of jobs being dispensed with, this must begin anything from 45 to 30 days before redundancies take effect.

Nomura is in the middle of just such a consultation period now. The Japanese bank is making around 50 people redundant in its London sales and trading unit. Individuals put at risk are understood to include emerging markets traders only hired last year and Omar Ghalloudhi, the former head of investment grade credit at Citi, who only joined in November 2017.

During the 30-45 day consultation period, banks are obliged to offer employees at risk of redundancy the opportunity to move into any vacant roles they have which match their previous positions in terms of pay and seniority. For the individuals concerned, this can present a problem.

At Nomura, for example, we understand that senior salespeople who were previously structuring derivatives solutions for publicly traded clients are in the process of being offered alternative roles at the Japanese bank. Instead of working with publicly traded clients, they will be on the “private side”, structuring solutions for privately traded companies and private equity funds. They can accept – or accept redundancy. Some appear to be choosing the latter.

Employment lawyers caution that refusing alternative roles in lieu of redundancy can be a risky strategy, however. “If you unreasonably turn down what is an obviously suitable alternative role, an employer can say you are not being made redundant but are resigning, and that you will therefore not receive a redundancy payment,” says Philip Landau of Landau Law. While there is no indication that Nomura has been deploying this technique, Landau says he’s seen it used in banking, with expensive consequences for the individuals concerned.

Severance packages in investment banks are typically one month’s pay for every year worked, although Deutsche Bank offers much less than this. To count as a suitable alternative to the role being made redundant, Landau says other jobs offered must have comparable pay, responsibility and status. They must also be based in a similar location – unless your contract includes a relocation clause, which is often the case in banking.

This, then is the choice for around 50 employees at Nomura now: accept what’s on offer, or look for alternatives elsewhere. Early indications are that many front office staff will look outside, with the Japanese bank at risk of losing talent across the sales and trading business as staff not put at risk also contemplate leaving.

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The bulk of what we’ve heard about Deutsche Bank’s massive layoffs plans – either directly from bank or through back channels – is that they’re focused on the bank’s equities business, with the elimination of 25% of all jobs within the unit. Deutsche Bank’s U.S. equities sales and trading business was said to be taking the brunt of the punishment.

Yet roughly 10 weeks out from the first round of cuts (around 400 U.S. staffers were already let go by the third week of April) Deutsche Bank’s U.S. equity capital management (ECM) team seems to have weathered the secondary market storm quite well considering. Deutsche Bank finished 11th in the U.S.. ECM league tables during the first half of the year, pulling in over $101 million in net revenue, according to Dealogic. While that’s down from 9th in all of 2017, Deutsche Bank’s U.S. ECM business is actually on pace to slightly trump last year’s performance, when it booked $195 million in revenue with a full team. And it only trails the 9th place position by 5% as of the end of June.

The numbers give credence to the theory of some current U.S. Deutsche bankers that the firm was simply cutting unnecessary fat without hitting the bone. Deutsche’s ECM team was extremely efficient, generating more revenue-per-deal than any of its surrounding peers on the league tables. Deutsche Bank’s debt capital management (DCM) business survived in equal fashion, falling from 8th in 2017 to 10th in the first half of the year. Again, they were around 5% from equaling last year’s ranking.

So where has the real carnage taken place? We’d suggest looking at Deutsche Bank’s U.S. mergers and acquisitions group. Deutsche Bank has fallen from 13th to 18th in the league table rankings, and now trails the likes of San Francisco-based boutique Qatalyst Partners, which was involved in one-quarter of as many deals as Deutsche Bank, according to Dealogic. In U.S. M&A, DB currently sits behind eight boutique investment banks.

Deutsche Bank’s U.S. M&A unit brought in virtually the same revenue as its ECM team during the first half of this year – around $101 million. No other full-service investment bank came close to equally this feat in the U.S. (most far exceed it). And it’s not that Deutsche’s M&A business is simply being outperformed by competitors in an up-market. They are on pace to miss last year’s revenue total by 28%.

The league tables suggest that a smaller headline may have had a much more material impact than the broader news surrounding the firm’s restructuring. As part of the moves, Deutsche Bank closed its Houston, TX office which primarily focused on advising oil and gas companies. The decision to walk away from oil and gas in the U.S. and the U.K. came as a bit of a shock to some insiders as it was said to be one of the better performing units within Deutsche Bank’s languishing global M&A business. Paranoia among other Deutsche M&A bankers ensued.

The closing of the Houston office and other oil and gas advisory cuts reportedly resulted in loss of around 70 jobs – mostly dealmakers and other front-office staff, according to the Wall Street Journal. The layoffs surely saved Deutsche Bank millions in overhead, though it appears they may have had more impact on earnings than other cuts within the U.S. investment bank, at least for now.

Follow @BeecherTuttle

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Over eighteen years in banking and finance, including five as a managing director at a major U.S. bank, I’ve noticed what makes some people succeed. Why some people get hired with guaranteed bonuses and some don’t. One is that they’re charismatic and have great relationships. In banking parlance, they have great, “social capital”.

Relationships are critical because that’s how humans work. We evolved out of small tribes. Relationships are simply about having people in your life who like, trust and want to help you. If those people also happen to be powerful and can get you a job at the same time, well then that’s excellent.

So how do we go about acquiring social capital? The rules are a lot like investing – you have to invest to grow your assets. Regular inputs of charisma will increase your returns.

Break your social capital down into three categories: people, knowledge and emotional support. People are simply the relationships you have. Knowledge is the information you possess (for example, the facts, insights, opinions, or expertise that you can share with the people you know.) Emotional support is the psychological and emotional well being you can offer – the support, friendship, inspiration and guidance you bring to your relationships.

The most powerful people on Wall Street use charisma to work all three.

When it comes to people, you want to be a facilitator. You want to bring the best people together and step aside. The most charismatic bankers know that connecting up a network is the greatest way to grow it. When you know two people who have similar interests, hobbies, or you think might just like talking to each other, ask their permission and introduce them.

When it comes to knowledge, Wall Street’s most charismatic share what they know. Whenever I read something interesting, for example, I try to have a habit of thinking who else would like to read it. You could do the same – or help a friend with a resume, or share a perspective with a colleague. Start thinking of your mind as an open-source project that other people can benefit from.

When it comes to emotional support, the best bankers will “be there” for the people and the clients they know. They’re emotionally present. They make phone calls, send handwritten notes and gifts. They say thank you and they are available as sounding boards. They make a difference to others.

Once you start investing in your social capital, once you start using your charisma in the style of these bankers, you’ll notice something. You’ll see that you start growing your social capital. When you start introducing people, you’ll see that they return the favour, When you need an introduction, you’ll see they’re more willing to make it happen. Just like that, your network and relationships will grow.

Similarly, you’ll find that when you start sharing your knowledge more openly you become both a source and an authority on useful information for the people you know. This builds your credibility and inspires your relationships to share information back with you. Again people will see you someone with intellect and credibility, yet another reason to let you in.

And as you grow closer to those people as a result, you become a better friend, a better listener, which moves other people to become a better friend to you, deepening your rapport, trust and goodwill, and inspiring more and more acts of generosity.

It’s self-perpetuating. The most powerful and charismatic people on Wall Street understand that. It’s time you did too.

The authors are former managing directors at Wall Street banks who blog at What I Learnt on Wall Street.

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When you resign from your job on the trading floor of an investment bank, it’s standard practice to be locked out of a bank’s systems and immediately bewith escorted from the building. After all, no bank wants exposure to the risk that you make a mistake or solicit its clients after declaring your intention to work elsewhere. At Deutsche Bank, however, some traders who resign are now being required to stick around.

We understand that several traders who’ve resigned from Deutsche Bank’s London fixed income trading business in the past few weeks are still at their desks. In a highly unusual development, we also understand that the German bank has required them to carry on trading and dealing with clients instead of taking the summer off on paid gardening leave. Deutsche Bank declined to comment.

The new policy follows a report last month that Deutsche Bank had cut paid gardening leave for its senior U.S. bankers to just 30 days, down from 60 days or even 90 days previously. During gardening leave, departing employees are unable to start new jobs elsewhere and are effectively paid to relax. Deutsche Bank’s truncated approach therefore denies exiting U.S. bankers summers off in the Hamptons.

In London, Deutsche insiders say they have signed contracts giving the bank the opportunity to cut gardening leave from three months to just one month within five days of handing in their notice. Even when gardening leave continues for three month, the bank is still requesting some traders to continue working.

Charles Ferguson, a veteran London lawyer with a long history of dealing with traders’ employment queries says Deutsche Bank is perfectly entitled to require its employees to continue trading, although it’s not standard practice. “Most banks immediately stick traders on gardening leave because they don’t want them chatting up clients after they’ve left.”

Headhunters who work with traders say Deutsche Bank’s new approach is unprecedented. “Usually, anyone in a risk-taking position is asked to leave the building as soon as they resign or are fired,” says one. “It’s possible that Deutsche Bank has decided not to follow this policy because they’ve lost a lot of people and need the desks manned over the summer for regulatory reasons.”

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At the end of last week, Credit Suisse paid out fines of $47m to the DoJ and around $30m to the SEC, to settle the investigation into its “princelings” hiring scandal. This was an investigation into the practice of hiring the children of highly-placed Communist Party officials in China into lucrative banking jobs in the hope the kids would be able to help CS Hong Kong get banking business from their parents. This was felt by the regulators to breach the Foreign Corrupt Practices Act. But the official press release on the settlement might strike many of us as familiar.

One employee, described at length in the DoJ press release, was hired after a slightly less-rigorous-than-normal process in which a CS banker wrote her resume for her, and warned colleagues that “she is a princess who is not used to too many rounds of interview”. After joining the graduate intake, she was rated bottom of her analyst class, and criticised for little things like rarely coming into the office and bringing her mother along to training events.

This didn’t affect her promotion prospects. She got evaluations with phrases like “try to answer the phone and not be rude” and “come into the office more – we love to see your smiling face”. Other bankers were asked to send her “congratulations, couldn’t have done it without you” emails relating to deals they had done thanks to her connections. She ended up getting about $1m total comp before the investigation turned into a career speed bump. The settlement doesn’t record what the other employees thought about all this, but it’s hard to imagine that it was anything very positive.

This is something of an extreme case. But haven’t we all worked alongside someone who was just a little bit of a teacher’s pet? A relative of someone who is a senior executive, or a kid of a big client, or someone with a surname that’s on one of the conference rooms, for example. The fact is that investment banking is about doing deals, and for this reason, people who can help the bank get deals are more valuable than people who can’t. And the P&L account doesn’t really care whether the deals are brought in by financial brilliance and business savvy, or by family connections. That’s why this isn’t the first princelings scandal by a long way – JP Morgan, for example, paid $264m to settle similar charges two years ago. The old proverb that “it’s not what you know, it’s who you know” is in many ways true.

Separately, which bank begins with D, ends with E and has a load of compliance trouble? Well yes, them too, but Danske Bank’s Estonian operations appear to be caught in a major money-laundering scandal which has grown and grown the more it’s been investigated and might involve as much as 53bn Danish kronor ($8.3bn). The bank is now seeing some customers shifting their own deposits in protest, and Bill Browder (of Hermitage Capital, and a perennial lobbyist against Russia-related organised crime) is planning to launch a criminal complaint against them.

What it looks like is a scandal similar to the HSBC Mexico case of a few years ago – a local operation that has never been properly integrated into the compliance framework of the group as a whole, and which has never in the past been seen as important enough to be worth supervising properly. A bad branch of a good bank is the most dangerous thing in financial crime, as it tends to be given the benefit of the doubt earned by the reputable parent, so there are much weaker constraints on its ability to expand its activities to truly amazing proportions. That’s another old proverb – “what you don’t know can hurt you.”

Meanwhile:

The top hedge funds in Europe surveyed, including some which don’t usually get much publicity. (Financial Times)

Steve Cohen gets turned down by the FCA as not “fit and proper” to open Point72 to the British hedge fund investing public. (CNBC)

A poem made up of Wall Street platitudes. (WSJ)

The inside story of the Blackrock / Hovnanian CDS affair. (WSJ)

HSBC and L&G chief executives will be having dinner with Donald Trump on his official visit to the UK. (Financial News)

Old Mutual Global Investors is to be renamed “Merian”, after a 17^th century butterfly expert. (Financial News)

A review of “Finn”, the new J.P. Morgan banking brand aimed at millennials. (Business Insider)

Citigroup has hired Gregoire Haemmerle and Pierre Drevillon from UBS to run CIB and M&A in France. (WSJ)

Arif Hussein is now running a burger restaurant rather than trading sterling rates for UBS, but he still wants them to cover his legal fees. (Daily Telegraph)

Credit Suisse has appointed Antoinette Poschung to the newly-created “Conduct and Ethics Ombudswoman” post, with responsibility among other things for handling all #MeToo cases. (Reuters)

Image credit: tuu Sitthikorn, Getty

It’s getting into that time of year when London is filled with the perennial sounds of an English summer. Leather on willow (or if it’s an Ashes series, leather on stump). Sausages sizzling on the barbecue. And the weary sigh of a posh kid in a new suit going “I just feel like I’m not really making use of my degree”. Yep, the interns are coming back again.

It’s an arrangement that seems to be set up in the best interests of absolutely nobody. A lot of college kids spend what ought to be the finest summers of their lives, sweating away in London and New York at the time of year when the city is at its smelliest. The banks pay money which could, pro rata, finance a pretty good management consulting project in return for work of close to zero value. And dozens of investment bankers face a choice between three equally undesirable options. You either spend time and effort in coming up with a challenging summer project unrelated to your real work. Or you bite the bullet and actually let a twenty year old rugby player loose on a few millions of client deals.

Or, like most of us, you come up with half an idea and some binders from last year, and put up with a gloomy bored presence sighing at the end of your desk for five weeks, occasionally looking up to ask a bizarre question. Heaven forfend, by the way, that you ask the person on the desk with least real work to help out with a bit of photocopying or make a tea run; in the brave new world of human resources, asking an intern to get some coffee is a grave faux pas.

How did it come to this? Once upon a time, there was a thing called “campus recruitment”. People interviewed for jobs in banking during their last year at university, on their campuses. Then, when they got their results, if they had passed, they started work as an employee. They were usually on six month probationary periods, so you could fire them if you’d made a mistake.

But MDs and Directors got tired of wasting their time going round the country, and they weren’t always very good at interviewing. So a system was devised whereby the candidates could come into the office and waste our time there, with the interview process spread out into an agonising getting-to-know-you exercise over a period of weeks. There might be some net saving of time and effort but I doubt it.

And there are real consequences for the industry. Since the recruitment process came to be dominated by internships, it has been entirely focused on a particular type of person – the type of person who knew that they wanted to work in an investment bank early enough to get their applications in for internships in their second year.

That’s not a representative cross section of society; most 18-year olds haven’t even heard of the investment banking industry, let alone decided on a career in it.

The people who apply for internships are generally very impressive in their academic results and extracurricular accomplishments. But there’s a certain similarity to their worldview, which is a result of a competitive treadmill of internships that robs them of any chance to have experiences that aren’t resume-enhancing. Graduate programmes today have achieved the feat of consisting of an impressively diverse group of young people, all of whom think exactly the same.

We should give the kids their summers back. It might not be possible to put the genie back in the bottle – now that this is the normal recruitment process for top talent, no bank is going to want to be the first to go back. But it wouldn’t be hard to shorten them, to a fortnight at most. Turn internships back into what they were meant to be – short work experience placements, not pretend summer jobs. All we have to lose are a whole load of bound Powerpoint projects that will be dumped in the bin five minutes after the intern class of 2018 leave the building.

Dan Davies, is a senior research advisor at Frontline Analysts and a former banking analyst at Cazenove, Credit Suisse and BNP Paribas.

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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MBA admissions officers used to look more favorably upon applicants with financial services experience. The strong work ethic associated with investment bankers and money managers and the prestige that comes with working for a big brand are attributes that business schools such as Harvard, Wharton and Stanford covet, as they demonstrate readiness for the rigors of the MBA classroom.

These days, finance candidates have to take a more critical approach to MBA application strategy, as they represent the largest pool of incoming students at top business schools. And while MBA admissions committees do accept applications from oversubscribed populations, they are now focusing more on diversity of profession, gender and nationality, because it enriches peer-to-peer learning and contributes to their success in the rankings. With finance an overwhelmingly male-dominated profession, men in particular have a higher bar to reach in the current MBA admissions climate.

So, how do you rise to the top of a competitive pool when you’re a common commodity? Every element of the MBA application should be optimized if you are to set yourself apart from the financial herd. Here’s how to do it:

Recognize that your resume doesn’t make you special

The default among financiers is to assume that their strong work ethic, employer brand and high stats will get them into a top school, but that is not the case today. About 50% of our finance inquiries do not realize that the bar is higher for their cohort, and that their application must be more compelling to differentiate themselves from the competition. Accepting that truth is the first step to securing a place on a top MBA program.

Top business schools expect holistic interests and achievements.

Highlighting personal qualities and triumphs is essential to your MBA application strategy. At SBC, we charted the application journeys of 21 MBA candidates from private equity firms applying to Harvard (HBS), Stanford (GSB) and Wharton.

Our study concluded that past academic background nor GMAT (admissions test) scores could reliably predict whether candidates were admitted or rejected. Success — defined by either an admit or interview invite – was rather predicted by how interesting the candidate was to admissions officers, our study found.

Being “interesting” was conveyed through activities that candidates engaged with outside the classroom during their undergraduate degree or in recent years, to the extent work/life balance allowed. For example, debate leadership, athletic activity and a remarkable thesis were undergraduate experiences that correlated with admits to GSB and HBS. Emphasizing earlier life interests that show character and values can differentiate finance candidates vying for top MBA programs.

Display responsible leadership credentials

Admissions committees want you to demonstrate more than financial success. “Show how you have made a positive impact on the communities in which you have operated, as this demonstrates leadership and predicts success at HBS,” shared a former HBS Admissions Officer on the SBC consulting team who asked to remain anonymous as they still work in the industry. It’s important to list your leadership roles and titles held, but also how you interacted with others and worked well in teams.

Many business schools also want to educate people who will lead society, not just business, and consider how their career impacts the environment around them. Schools are thinking about employability when reviewing applications – a critical factor in MBA rankings – and whether candidates will use the MBA to achieve their career goals.

“Clarity of goals is extremely important to Wharton, especially as they’ve combined MBA admissions, career management, and student life under the same deputy vice dean,” according to Meghan Ellis, a former Wharton Admissions Officer on the SBC team. “The Wharton admissions committee will look at applications to see: is this person already on the fast track, are their goals logical and reasonable, do they have a plan for how they will use their time during the program and how they will meet their goals?”

In addition, illustrate how you will contribute to your new community at business school. Convey that you will be active and engaged on campus — how you will take on a leadership role within a club that you are passionate about, for example.

Use recommendations to show how you are at the top of your class

A career at a prestigious firm such as Goldman Sachs may not be enough to get you into business school, but it sure can help. A recommendation from a senior manager at a leading bank or fund can add some stardust to your MBA application.

Use your recommendation letters to convey what made you stand apart from your peers at the firm — including project or people management, and evidence of high performance, such as receiving promotions more quickly than others, which are all valued by MBA admissions teams. It’s not generally permitted to write the letters yourself, of course, but you can guide your recommender by explaining what business schools want to know about you, relative to the strengths and vulnerabilities of your profile.

Being a banker can still be an advantage to gaining an admit to an elite MBA program, if you know how to sell it.

Stacy Blackman is the president and founder of Stacy Blackman Consulting, an MBA admissions consulting advisory launched in 2001. Stacy earned her BS in Economics from the Wharton School at the University of Pennsylvania and her MBA from the Kellogg Graduate School of Management at Northwestern University.

Follow @BeecherTuttle

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Credit Suisse has brought on board Raymond Sisson, a veteran salesperson who has spent his entire career in aircraft leasing, as a new managing director in New York.

It is not immediately clear what Sisson’s role will be at Credit Suisse given that he has never worked for a bank before. However, it is very likely that he has been hired by Credit Suisse’s private bank, which has built up an aviation finance unit for corporate customers and high-net-worth individuals as one of its core strengths.

Credit Suisse had previously been named the best private bank for business jet finance and advisory in EMEA by Corporate Jet Investor. Aside from bankers, the group also employs pilots, aeronautical engineers and lawyers for its aviation finance team. Sisson’s background would fit in well. He comes with more than two decades of experience in the aviation industry and has a JD from Georgetown University Law Center and an MBA from the University of Chicago Booth School of Business.

Before joining Credit Suisse last month, Sisson served as the chief executive officer and chairman at AVi8 Air Capital, a commercial aircraft leasing company that he co-founded in late 2016 with Ed Wegel, the former CEO of Eastern Air Lines Group. The company’s website is not functional at present, and Sisson’s LinkedIn profile implies he already ended his association with the firm in June.

Sisson began his career in 1995 with GE Capital Aviation Services where he served as a senior vice president and regional manager for 13 years. He moved on to become CEO and president of Titan Aviation Leasing Ltd. in 2008, but shifted to aircraft maintenance repair and overhaul service provider SR Technics as the chief commercial officer a year later. Between 2010 and 2016, he served as the CEO and president for Ansett Worldwide, a commercial jet aircraft leasing company. Up until last month, he was on the board of directors for Hudson Structured Capital Management, which focuses on equipment financing in aviation, shipping, rail, containers, and auto among other segments.

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The two U.S. co-heads of prime brokerage at Cowen Inc. have left the firm just a year after joining. Michael DeJarnette and Douglas Nelson were named co-heads of the U.S. business in 2017 after coming over as part of Cowen’s acquisition of brokerage firm Convergex Group. Insiders say the pair left the company in June.

Nelson had been the CEO of Convergex for over a decade before Cowen’s $100 million acquisition. DeJarnette was an executive director of prime services. The two were only named co-heads of the U.S. business in October after Cowen fully integrated Convergex within its own platform. The acquisition closed in June of last year.

Prime brokerage has been an interesting area to watch over the last few years. Executing trades and covering margins for hedge funds, prime brokerage units are capital-intensive yet can be highly lucrative. Banks that are looking to reduce their leverage and satisfy regulators have been cutting their exposure to prime brokerage while others have looked to fill in the gaps.

Credit Suisse has been scaling back its prime brokerage unit for several years. The Swiss bank cut seven staffers from its New York operations just last month. Faced with similar capital restraints, Deutsche Bank has also recently made cuts to its prime financing business in the U.S. Meanwhile, BNY Mellon launched an FX prime brokerage unit earlier this year while Standard Bank started offering prime services late last year.

Cowen was voted the best boutique prime broker at the 2017 U.S. hedge fund services awards while earning the same honor in Europe in 2018. The company declined to comment on the departures. DeJarnette also declined comment while Nelson didn’t respond to an inquiry about the nature of his exit.

Follow @BeecherTuttle

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BNP Paribas lost one of its top emerging markets salespeople

“Technologists in banks are lazy. They should be paid less, not more”

Morning Coffee: The art of making millions when you work in M&A. Ongoing rumblings about recent bonuses at Goldman Sachs

Meanwhile:

Credit Suisse lost a top quant, a year after giving him a big promotion

The highest paying internships at investment banks in New York and London

“Central risk desks are getting out of control”

Two senior equities traders exit SocGen in New York

Ex-Barclays trader just got a big promotion at Morgan Stanley

Crazy intern hours at Goldman? Actually, I left by 9pm and never worked weekends

Morning Coffee: J.P. Morgan reluctantly tells staffers to start packing. What it’s like to work for a hedge fund that’s rolling

Millennium Capital Management lost one of its top London portfolio managers

Why you should accept the alternative jobs banks offer instead of redundancy

Where jobs cuts have – and haven’t – hurt Deutsche Bank in the U.S.

How to network with all the charisma of a top Wall Street banker

Disconcerted Deutsche Bank traders are being made to work their notice periods

Morning Coffee: The $1m “rude” banker who wouldn’t take phone calls. The small bank with big compliance problems

Against banking internships – give the kids their summer back

How to leverage your banking resume to get an MBA at Harvard, Wharton or Stanford

Credit Suisse hires airplane salesman as new MD

Top prime brokerage execs depart Cowen in short order

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