eFinancialCareersEnglish (UK) – eFinancialCareers

On paper, Anshu Jain and Howard Lutnick make for a bit of an odd couple. Lutnick, who has essentially run Cantor Fitzgerald since he was 29, is known to be outspoken and unafraid to ruffle a few feathers. The former co-CEO of Deutsche Bank, Jain is soft-spoken and well-traveled, holding a number of roles at several different firms throughout his career. Yet after only 18 months co-manning the helm at Cantor Fitzgerald, Lutnick and his number two in command appear to have developed quite a partnership – one that has put the firm on an aggressive and disruptive growth path.

Lutnick, Cantor’s longtime CEO who lost two-thirds of his staff – including his brother – during the terrorist attacks on September 11th, admitted to Bloomberg that he’s “been lonely” and “wanted a partner.” Adding Jain, who resigned from Deutsche Bank in 2015 amid scandal, seemed to fix what was ailing him. The two are said to be extremely close, with their relationship extending beyond the walls of the office. The pair and their wives vacationed together this summer and speak every day, even when Jain is in London.

Inside the walls of Cantor Fitzgerald, Lutnick and Jain are pushing the envelope, expanding the firm’s presence in the highly-competitive worlds of prime brokerage and advisory while also growing in sectors like healthcare, real estate, and power and alternative energy, according to the report. Add that to firm’s burgeoning trading business and it’s clear that Cantor and its 1,300-plus employees are pushing full steam ahead while larger banks are paring down some business lines.

Cantor has reportedly offered pay packages north of $10 million to poach bankers from larger rivals, including an entire team from Jefferies to launch a power and renewable-energy franchise. The firm also took an aggressive line by hiring Sage Kelly as its head of investment banking. Kelly resigned from Jefferies in 2014 after making major headlines when his ex-wife accused him of committing some of the more salacious acts you’ll read about, all of which he denied. But Kelly’s exit seemed to have a ring of finality to it, until Cantor came calling over a year later.

Lutnick and Jain both know a thing or two about handling controversy. Cantor has been sued on multiple occasions, including by former employees, while Jain left Deutsche Bank just a month after the German lender agreed to pay a record $2.5 billion fine for rigging Libor rates. Either way, the two appear to be content in their current position as “the biggest little guy” on the Street.

Elsewhere, Bank of America’s issues may extend well beyond Christian Meissner, the head corporate and investment banking who is leaving the firm. Reports suggest that internal tensions over the bank’s appetite for risk – or lack thereof – may have led to his departure. Meissner’s exit comes three months after rumors began to circulate that BofA’s M&A bankers were upset with the firm for passing on potentially lucrative deals in emerging markets and scrapping “years-long” plans to expand key lines of business within its investment bank. Additional executives are weighing leaving the bank due to its risk-averse strategy, according to Bloomberg. It’s possible Meissner is just the first piece to fall.

Meanwhile:

Incoming Chief Executive David Solomon is certainly making his presence felt, despite not even technically owning the CEO title for another 10 days. The latest shakeup is the departure of the bank’s equities trading head, Paul Russo, who is said to be negotiating his exit. He’s the latest senior trader to be shown the door since Solomon was named CEO. Russo started at Goldman as a summer intern in 1989. (WSJ)

Wells Fargo plans to cut as much as 10% of its global workforce over the next three years, resulting in the loss of as many as 25k jobs, mostly in retail. (CNBC)

The group that’s trying to oust HSBC global banking boss Robin Phillips reportedly contacted more than 60 senior bankers at the firm before sending a scathing letter to the group’s chairman, chief executive and board, demanded he and his management team be dismissed. (Financial News)

Lawyers for two former Deutsche Bank traders accused of manipulating Libor rates have put together an interesting defense: the rules regarding rate submissions at the time of the accused rigging were unclear. (Bloomberg)

Former AllianceBernstein chief executive Peter Kraus has launched a new asset management firm based on a novel concept. It will only charge higher fees if its funds beat the overall market. Employees will be paid based on how they performance against passive index funds. (WSJ)

Danske Bank Chief Executive Thomas Borgen has resigned following a lengthy investigation into money laundering practices at the Danish bank. (WSJ)

French regulators have introduced a proposal that will strengthen MiFID rules and make it more difficult for U.K. banks to conduct business in the EU post-Brexit. (Bloomberg)

Follow @BeecherTuttle

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

““

In 2017, the brothers Zaoui had an exceptional year. Recently released accounts published on the Companies House website in the UK reveal that their boutique M&A advisor, Zaoui & Co., increased its revenues by 241% on 2016, to £13m ($17m). The previous year’s loss of £1.3m was transformed into a profit of £5.3m in the process.

The Zaouis, who are known for Italian suits and French panache, and who were formerly global head of M&A at Goldman Sachs (Yoel Zaoui) and chairman of European M&A at Morgan Stanley (Michael Zaoui), only employ 11 people at their tiny M&A boutique (sometimes referred to as a ‘kiosk’). Last year, they worked on a series of major deals, including the £2.7bn acquisition of Berendsen by Elis, and the Carlyle Group and CVC Capital Partners €4.7bn acquisition of ENGIE’s E&P activities.

In the circumstances, you might presume that the Zaoui’s handful of exemplary and very hardworking staff would be exceptionally well paid. In fact, this doesn’t seem to be the case.

The boutique’s 13 employees, including its directors (the Zaouis) were paid a total of £4.6m for 2017, amounting to an average of £353k ($467k) each. Much as this is an exorbitant amount of money, it’s a lot less than Paul Taubman is paying over at PJT Partners in London, despite his large annual loss. It’s also less than Evercore pays (globally). But it’s on a par with pay at Perella Weinberg in London.

The Zaoui’s comparative caution when it comes to paying their staff, seems to extend to paying themselves. The two brothers only paid themselves £300k each for 2017 according to the firm’s accounts. This was the same as in 2016. In payroll terms, therefore, the directors are equal to the rank and file.

However, there’s still that £5.3m of profits to be accounted for. Zaoui & Co. is a limited company, meaning the profits can be distributed among shareholders. In 2017 there were no dividends paid to shareholders at all. However, shareholders received dividends of £8.5m for 2016 (despite the loss). The controlling shareholders are, of course, the brothers Zaoui, who own their boutique through two other vehicles – Diadochi Limited, and Fusione Limited. Past performance suggests they might be saving up to pay themselves a generous dividend in 2018.

Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com in the first instance. Whatsapp/Signal/Telegram also available.
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.)

Photo: Getty

““

As Brexit approaches and British bankers contemplate a new reality in which client-facing people in the U.K. will have minimal access to clients in Europe, headhunters in Frankfurt say calls and applications from London are becoming more frequent.

“Word has spread that you can make a career in Frankfurt faster than in London,” says Behi Farid of Robert Walters in Frankfurt. “The teams are smaller and the competition less intense. For some time now, we have been receiving more and more applications from the British, which of course is related to Brexit.”

It’s not just Farid. “Only yesterday I received a call from a Brit who wants to change to Frankfurt,” headhunter Jan Graffelder of Look & Graffelder in Frankfurt, although he questioned whether this was Brexit-related or due to, “private matters.”

For the moment, most of the jobs publicly advertised in both Frankfurt and Paris are still for the middle office.

Bank of America’s decision to move Sanaz Zaimi, Vanessa Holtz and Othmane Kabbaj to Paris in July created fears that a rush of sales and trading jobs would soon follow, but despite persistent rumours that 20% of BofA sales staff will move from London before the end of this year, the only jobs actually advertised at BofA’s Paris office so far are in compliance and risk. Barclays alone has begun advertising trading vacancies in Frankfurt, with around 12 jobs for equity derivatives traders, FX traders, credit traders and rates traders.

This week’s clarification that the European Banking Authority won’t completely ban so called-back-to-back trading after Brexit, means fewer trading jobs are likely to move than previously thought: trades that are made in Frankfurt or Paris can simply be transferred to London through an internal trade, and the risk offset in the City.

Even so, one senior German banker who previously worked in London, says City bankers have reason to be increasingly interested in Germany: “Everyone’s job in Frankfurt has just become a lot safer.” This is despite imminent changes to Frankfurt labour laws, which will make it easier to fire people earning in excess of €234k a year. “No bank wants to risk losing existing Frankfurt staff now,” he adds.

The same banker says British financiers are eager to buy Frankfurt property to help hedge against falling property prices in London. “I know a London banker who just bought a 200 square metre flat 10 minutes walk from the centre of Frankfurt, with a roof garden, for €1.6m,” he says. “Frankfurt real estate is super-safe and super-cheap. It’s the perfect hedge against the huge downside risk to London and to sterling.”

““

Is your stride long enough? Are your legs strong enough?

Into the 3^rd year of my start up I have started to question the decision I have made. Why did I leave a very comfortable job in an investment bank to begin a company? At the time, it seemed exciting. The risk, the reward, the options, the opportunity.

Now I am hit with the reality.

This is frickin hard.

This is harder than anything in investment banking. At least in banking you get to travel nicely, you eat at great restaurants, you have annual parties, you get a salary and a bonus. Yes, you work hard, but you also receive pleasures.

At a start-up, the time to succeed is on average 5 years, unless you are lucky. I am only 50% of the journey. Mismatched chairs in the office, no coffee machine, no monthly pay slip to look forward to, budget airlines flights at 2am. This is brutal.

It tests your clarity of thought, your patience and your drive. I must admit, I am beginning to wither. I believe in my product more today than when we started. But, the virality hasn’t come. Everyday feels like we might be on the brink of having to close. Work hard, fund-raise, go to market, no virality. Next time, work harder, be angrier, fund raise harder (for less) and go to another market. Still no virality.

There are millions of Apps in the App stores. How do I become a Top 100? There is literally a 0.001% chance of this happening.

You can read all the literature in the world about beginning a start-up. Nothing can prepare you for the actuality. You go to sleep thinking about your product. You wake up to pee, and you grab your smart phone to check your company messages. You wake and login to your website. How many users joined in the last 6 hours whilst you were restlessly asleep?

The day is about people, product, meetings, stakeholders, customers, more users! All, without pay. All with hope and potential glory with a 0.001% chance of success. Banking, even at -50% of my previous pay is starting to look very attractive!

Zalim Naidu is the pseudonym of a former Goldman executive director who left to launch a start-up, and regretted it

Image: Getty

Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com in the first instance. Whatsapp/Signal/Telegram also available.
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.)

““

Tech behemoths like Google and Apple have overtaken investment banks as the destination of choice for many blue-chip recruits. While this narrative has been slowly building for several years, highly recruited students first began passing on careers in banking in large numbers following the financial crisis. Pre-2008, the likes of Goldman Sachs and J.P. Morgan stood atop the rankings of ideal employers. Now, many top tech companies rank ahead of banks when it comes to prestige. While investment banks have been fighting the PR war to win back top junior talent, there may be nothing they can do. Somewhat ironically, banks may simply need tech companies to do what they did in 2008: fall flat on their face and lose the faith of the general public.

Taking a quick glance at the latest employer branding study from Universum, there were few surprises. In the business category, Google finished as the most attractive employer, Goldman Sachs was second, while the Big Four accounting firms filled out the top half of the first dozen companies in the rankings.

The top of the engineering and IT category was even more predictable: Google, Microsoft and then Apple. But where was Facebook? The social networking giant fell precipitously over the past year – all the way down to 23rd – behind the likes of Goldman Sachs and consulting firms McKinsey & Co. and Boston Consulting Group. J.P. Morgan found itself just a dozen spots behind Facebook. No matter the bean bag chairs and casual dress code, Facebook’s scandal-plagued year has significantly affected its brand in the minds of future recruits.

“Over the last 12 months the social giant has faced a bevy of crises—from the privacy scandal of data partner, Cambridge Analytica, to claims of Russian-funded operatives using Facebook to interfere with elections across the world,” the study authors wrote. “Mark Zuckerberg, once the epitome of digital innovation, now often appears tone deaf to public concerns about Facebook’s power.”

A current Facebook employee who formerly worked in the tech department of a large bank said he hasn’t yet seen the company lose its recruiting edge but wouldn’t be surprised if the incoming generation of talent starts looking elsewhere and if there is more employee churn than in years past. He spoke of a sense of acrimony at the office caused by politically-based divisiveness. “The perception that Facebook has been used as a medium for right-wing influence is very much part of the discussion,” he said.

Late last month, Business Insider reported on an employee divide at Facebook where roughly 160 workers joined together on an internal message board to protest the company’s “intolerant” liberal culture that is “dripping of hate” for conservatives. And just yesterday, news broke that Facebook gifted $15,000 to the National Republican Campaign Committee in mid-August with no offsetting donation to the Democratic side. “That won’t help,” the employee said.

No longer a young and nimble company, Facebook is beginning to face pressures that accompany great influence. Its response to those pressures has apparently caused some potential recruits to move the company down their list. “Facebook has been unable to restore trust among Generation Z, particularly among those seeking careers in engineering and IT,” according to the study authors.

But before banks celebrate a potential recruiting edge, it’s worth noting that tech companies like Google and Apple have faced their fair share of criticism and remain atop the rankings. Google has been fined over privacy breaches while Apple has taken heat over the working conditions of some of its suppliers, yet neither has taken a fall like Facebook, at least with this study. The Facebook employee believes the difference lies in the fact that the social network’s scandals are intertwined with politics at such a polarizing time.

The other issue facing banks is that a full decade may not be enough time to clear the memory of the financial crisis and who the public blames for it. “I was surprised at how much vitriol there is about the financial crisis 10 years later,” New York Times’ columnist Andrew Ross Sorkin said this week in response to J.P. Morgan CEO Jamie Dimon’s comments on being able to beat President Trump in an election. “The amount of anger was so palpable, and I think that to this very day it pervades the entire conversation.”

The only silver lining is that the next batch of top university recruits were eight years old at the time. So there’s that.

Follow @BeecherTuttle

““

In theory, Goldman Sachs is building out its electronic trading business. Incoming CEO David Solomon said in June that the firm is moving away from its “cash business, flow business and electronic platforms” as it pursues $1.5bn in extra fixed income trading revenues and $0.5bn in extra equities trading revenues. In reality, a surprising number of people seem to been quitting Goldman’s electronic trading platform for rivals, particularly in New York.

Around seven people, many of them vice presidents (VPs) or executive directors (EDs) have left Goldman’s NYC electronic trading business in the past three months. Few of them have been reported.

The exits include Steve Leo, an electronic trading coverage professional who spent 11 years at Goldman and who quit in July. He’s now at UBS in NYC. There’s also Jared Pollard, a VP in Goldman’s equities business, who left in July and is now at RBC. There’s: Nick Uljaj, a VP in electronic trading technology at Goldman, who also left around July (for J.P. Morgan); Alex Sahu, a former member of Goldman’s cash algo strats team, who quit (in July) and just turned up at Citadel; Hunter McMaster, a former associate on the team who’s understood to have left for Morgan Stanley; Matthew Mendoza, a former sales trader on Goldman’s NYC electronic trading and multi-asset platform, who left for Citadel in August. And…there’s Bill Jacobs, a New York-based VP in securities strats, who’s understood to have resigned recently (but is still registered with GS and is on the firm’s internal directory.)

The departures in New York come as Goldman recently lost Gordon Ball, a former executive director director in its London equities business, to Citi. Ball joined Citi as EMEA head of electronic execution this month. He was followed by Max Middleton, a Cambridge graduate who spent eight years on Goldman’s electronic trading desk. Meanwhile, Alex Skrypnik, a London-based quant developer left in July to become a director in electronic trading at Citi.

Goldman Sachs didn’t immediately comment on the U.S. exodus. However, the global flow hasn’t been entirely one way: there’s been plenty of hiring in London. In July, Goldman hired Tim Rohkemper from Credit Suisse as an executive director for its London electronic trading desk. It also hired Matt Kilsby, the former chief operating officer of Systematica Investments, as a managing director in London, plus traders from Instinet and Cannacord (in London). And then there have been various hires into the London quantitative execution services team. This month Goldman hired Salim Benkirane from SocGen for its systematic trading team.

The staff churn comes after Goldman hired Mike Blum, the former chief technology officer at high frequency trading firm KCG Holdings in October last year. Blum arrived with a mandate to sharpen-up Goldman’s electronic trading systems after years of comparative neglect. – Bloomberg observed that Goldman lost its edge in trading to Morgan Stanley after its rival pursued excellence in algorithmic trading after the financial crisis and GS did not.

Goldman Sachs insiders say the firm’s outdated electronic trading product is part of the problem. So too, though, is the influx of new hires. “Management are diluting the culture with outsiders,” says one. Solomon has added five executive directors and one managing director to Goldman’s securities business in the past two months. It doesn’t help that existing traders are already concerned about bonuses this year, particularly as the CEO seems quite likely to prioritize the investment banking division over securities when the time for splitting the compensation pot comes.

““

If you’re a finance professional considering your MBA options, you face a bewildering array of choices across hundreds of universities around the world. Not all MBAs, though, are specifically designed to advance your career in financial services – and that’s what makes ESSEC Business School’s Global MBA stand out from the crowd.

Alongside compulsory core modules covering key business functions and management topics, participants can choose to specialise in Finance as their major. The option to major in Finance was introduced last year during a revamp of the Global MBA, says Sofia Ramos, an Associate Professor in the Finance Department and the Finance Major Coordinator of the Global MBA program at ESSEC.

“Other MBAs offer finance-related courses, but ours is a unique approach,” explains Professor Ramos. “It’s a structured, in-depth and career-focused Finance major, and isn’t just a few generic finance courses tacked onto the end of an MBA.”

The Finance major is taught over all three terms of the one-year full-time Global MBA, with each term focused on different themes. Term one includes courses on Entrepreneurship, Business Law, and Statistical Analysis for Management, while term two teaches Firm Valuation and Financial Analysis. The final term features a deep-dive into specific parts of the finance sector, including Equity and Debt Markets, Mergers & Acquisitions, Private Equity, Project Finance, and FinTech.

But why study finance within an MBA instead of, for example, taking a Master in Finance? “Our programme is designed for professionals who want to enhance their technical finance skills and concurrently gain the management expertise they need to take their finance careers to the next level as senior leaders,” says Professor Ramos. “This combination gives you the best of both worlds.”

The wide range of finance topics taught during the Global MBA also makes the degree relevant if you want to move into a new part of the finance sector. “It can certainly help you make a career change. The finance industry is competitive, and to get ahead many people want more in-depth learning in areas they’re not so familiar with,” says Professor Ramos.

Participants who choose the Finance major begin the program at ESSEC’s campus in France, and have the option to spend at least 1 trimester at ESSEC’s campus in Singapore. Many of the participants choose the programme because they want to work overseas after graduating, says Professor Ramos. “We call it ‘global’ for a reason. Not only is it based in two major financial centres – something that many other MBAs don’t offer – but the content of the degree is also very international.”

The Global MBA “helps you to bridge the gap between Western and Asian business models”, adds Professor Ramos. “Our Finance major includes Asian case studies alongside European and US ones. And we invite Singapore-based guest speakers from the finance sector – from banking to private equity and energy markets – to talk at our campus.” Singapore has been consolidating its role as an important financial hub in Asia, including its position as a fintech hub.

ESSEC’s own faculty also brings an international perspective to the classroom. “The professors come from more than 30 different countries, while the MBA participants are from a diverse mix of nationalities and backgrounds, too,” says Professor Ramos. “This creates a global environment and leads to interesting and rich discussions in class. The participants are open to challenging you and being challenged. They’re not afraid of sharing their opinions, and this contributes significantly to more active learning in the classroom,”

This open sharing of ideas comes to the fore during the case-study discussion groups that MBA participants take part in throughout the programme. “You’re assigned a complex problem based on a real business scenario. There’s no one correct solution, so you need to work together closely as a team,” says Professor Ramos. “These groups are a key element of the ESSEC teaching methodology as you typically learn better when interacting with others. These experiences also improve your time-management and relationship-building skills as you have to divide up tasks efficiently.”

Both the management and finance courses within the ESSEC Global MBA are designed to link academic theory to the realities of the modern business environment. “This is a very hands-on programme because we take into account that the participants already have a few years of work experience,” says Professor Ramos. “We lay down the theory, but our main goal is that you understand the practical application of it – that you know how an M&A deal works in practice, for example.”

The digitalisation of business, including financial services, is also “at the heart of the Global MBA”, adds Professor Ramos. “The programme prepares you for the digital revolution and even includes a Digital Week Competition, during which participants work in consulting teams to provide a solution to a digital-related issue faced by a company. Furthermore, a FinTech elective offered during the program allows participants to go even deeper into this emerging business area.”

The ESSEC Global MBA is geared to prepare you for the workforce. Through the 1-2-1 Mentoring Program, participants in the Finance major will be paired with a mentor possessing knowledge and experience in line with the participant’s areas of interest in the Finance sector. Through regular interactions, mentors would be able to provide them with career advice and guidance. ESSEC’s Career Services unit, meanwhile, guides participants on optimising their résumés and LinkedIn profiles, refining their interview and salary negotiation skills through interview simulations, and runs a variety of job-focused training and networking events. “Our careers team and mentors know the key trends in the finance industry, so they can steer you in the right direction for your career based on a comprehensive understanding of your professional aspirations,” says Professor Ramos.

The first batch of Finance majors graduated at the end of August and many of them went straight into new jobs or internships. “For example, one has joined IBM in a Fintech role, while another is consulting in cyber security for financial institutions,” says Professor Ramos. “These are both areas of high demand within financial services.”

The intense mix of both academic and professional activities during the Global MBA means that a strong degree of commitment and skilful time management is required. “It’s a challenging but exciting one-year journey, so you need to manage your time and energy well,” advises Professor Ramos. “Above all, come with a positive attitude and open mind, ready to learn new perspectives from people from different backgrounds to yourself.”

For more information about the ESSEC Global MBA Finance Major, please go HERE

Workplace diversity and gender equality advocates are up in arms after a male director at Credit Suisse who alternates between dressing as a man and a woman was named as one of Britain’s top female executives.

Philip Bunce, a married father of two who has previously described himself as “gender fluid,” splits his time at work as Philip or Pippa, depending on whether he is dressed in a men’s suit or in women’s clothes (a short pink lacy dress, high heels and fishnet tights according to the photos) and a wig. In an October guest column in Financial News, Bunce said he came out at work roughly four years ago and was greeted with positivity and support by his bosses and colleagues at Credit Suisse. He has since been recognized with several external awards, including being named as one of Britain’s top 10 LGBT inspirational leaders.

But his inclusion in Financial Times’ latest “Her-oes Champions of Women in Business list” has elicited a negative reaction from several gender and LGBT equality champions who believe the accolade is “sexist” and “insulting” to women who face other work-related challenges, according to interviews from The Times and the Daily Mail. The main point of contention seems to be that the organizers of the awards issue a separate list that lauds male executives who support women in business, but Bunce chose to be nominated in the women’s category, according to the Times.

“This makes a mockery of women and their achievements,” Kiri Tunks, co-founder of Woman’s Place UK, told the publication. “I would be the first to applaud Bunce’s gender non-conformity, especially in [the male-dominated business world] as it would be brave and boundary-pushing. It’s a shame he has to spoil it by accepting accolades for female executives,” added Kristina Harrison, an LGBT activist who was born male but transitioned two decades ago.

Former Credit Suisse employee Caroline Farrow weighed in on social media, suggesting that if a female banker wore “a shocking pink lace dress [and] towering heels, a manager would have a word,” according to the Daily Mail.

The head of a global markets engineering team, Bunce has been with Credit Suisse since 2005 following stints at Goldman Sachs and UBS. “We are very proud to be an inclusive employer which celebrates all aspects of diversity,” Credit Suisse said in a statement to the Daily Mail.

In a tweet, Bunce initially described his detractors as ‘sad terfs’ – an acronym meaning ‘trans-exclusionary radical feminists.’ However, this was later deleted.

Elsewhere, a host of banks and boutiques are celebrating Comcast’s $39 billion majority takeover of British media company Sky following a dramatic blind auction that included First Century Fox, which already owns a 39% stake in the company but wanted full control. Acting as Sky’s advisers, bankers from Morgan Stanley, Barclays and PJT Partners will share a pool of roughly $80 million. Robey Warshaw, Evercore, Bank of America and Wells Fargo represented Comcast, and will split roughly $50 million. Fox’s bankers – Goldman Sachs, Deutsche Bank and Centerview – would have made a bit less if they advised on their winning bid but will still see some love for their work.

Seven of the top 10 firms in the M&A league tables worked on the massive deal, set to be the largest takeover in the U.K. this year. J.P. Morgan and Citi, the first- and fourth-ranked dealmakers during the first half of 2018, were the only big names that were left without a piece of the pie.

Meanwhile:

Despite a lack of interest among bank executives, the German government appears in favor of a potential merger of Deutsche Bank and Commerzbank. News also broke on Friday that Deutsche Bank’s former U.S. head of mergers and acquisitions delivered a presentation back in April suggesting the bank should be broken up. (The Independent)

2018 is setting up to be a horrible year for oil traders. Dwindling profits and ill-timed bets amid wild price swings will result in the restructuring of trading desks and smaller budgets for the coming year. (Bloomberg)

If you work at a hedge fund or private equity firm, it pays to be based in Connecticut and not New York. A new tax provision allows employees based in Connecticut’s gold coast to reduce the amount of taxes that are applied to carried interest. (Bloomberg)

A former banker quit his Wall Street job to launch a startup that organizes home parties to sell legalized marijuana products, similar to the business model adopted by cosmetics giant Mary Kay. (WSJ)

David Tcholakian, UBS’s head of consumer products and retail investment banking, has left the firm to join J.P. Morgan as a managing director. Based in New York, Tcholakian had been with UBS since 1999. The Swiss bank has now made several big-name hires as it looks to expand its presence in U.S. consumer and retail M&A. (Reuters)

Facing a shortage of tech employees, Singapore is looking to recruit foreign software engineers for high-end jobs involving artificial intelligence and other technologies. (Bloomberg)

A former Deutsche Bank trader who was charged with manipulating interest rates in the U.K. in 2015 has been arrested in Italy and is facing possible extradition. Andreas Hauschild was living in Germany, which earlier had rejected an extradition request, but his travel triggered an arrest warrant when he arrived in Italy. (Bloomberg)

Here are two wacky workplace trends. Some companies are now “sugar shaming” employees by discouraging birthday cakes and unhealthy snacks in an effort to cut down on obesity and diabetes-related healthcare costs. Meanwhile, firms are beginning to offer “furternity” leave – allowing new pet owners to work remotely for a period of time as they bond with and train their new furry friend. (WSJ)

Follow @BeecherTuttle

““

It wasn’t long ago that all sorts of people were leaving investment banks to work for hedge fund Balyasny Asset Management. Between 2016 and 2017, the fund massively increased its London headcount. Balyasny’s results for the year ending December 31st 2017 help explain its popularity.

Balyasny employed 92 people at the end of 2017, up from 69 one year earlier. To these people, it paid a total of £41m in wages and salaries – excluding pension payments and employer’s national insurance contributions – an average of £442k per head.

Balyasny’s generosity was accompanied by a 22% increase in U.K. revenues to £77m and a 14% increase in operating profits, to £2.5m.

Needless to say, things haven’t been quite so merry at Balyasny in 2018. In February, the fund let go of around 10 macro traders from the training programme that were previously so popular with young bankers. In May, another five traders left voluntarily for Point72. Colin Lancaster, the former head of macro strategies at Balyasny joined Citadel in October last year, and has been busy building a team there instead.

Changes to the FCA register suggest hiring has slowed at Balyasny this year, with recent London recruits more likely to include staff transferred from the U.S. (eg. research analyst Stefan Ljubisavljevic) than hired externally.

Separately, Citadel Europe LLP also filed some results for 2017. The fund allocated a massive £125m in profits to its members (partners) during the year. However, alongside Citadel’s 13 named members, including the likes of Stefan Ericsson (a senior portfolio manager), Chris Foster (head of European gas trading), Iain Gannon (a director), Benjamin Ansellem (head of power trading), Fotios Panagiotopoulos (another director), Jonas Diedrich (also a director) and Sam Elsokari (a global financials portfolio manager), Citadel’s partners are also listed as two corporate members – Citadel Management (Europe) and Citadel Investment Group (Europe), suggesting a large portion of the £125m may not have gone directly to individuals.

Revenues at Citadel Europe were more than twice those of Balyasny in 2017, at £188m. This was an increase of 20% on the previous year.

““

BNP Paribas has made two new hires in London as it looks to strengthen its investment banking team while increasing its client coverage.

John Bigham, a veteran investment banker with over 25 years of experience who previously headed Nomura’s natural resources and power for EMEA, joined the French bank as a managing director. He will be handling client coverage for the firm.

BNP also hired Tejus Morland from Barclays, where he was an associate in the UK financial institutions group (FIG) within debt capital markets (DCM).

Bigham began his career as an associate with L.E. K. Consulting in 1992. He moved on two years later to Deutsche where he worked for eight years. His later stints include serving as a managing director for European M&A at Bank of America for four and a half years and heading the advisory business for Standard Bank Group in London for three and a half years. He joined Nomura in 2011.

On the other hand, Morland joined Barclays in 2013 and held various roles including that of a risk analyst before moving into DCM.

BNP’s hires come as the French bank struggles to stick to its 2017-2020 business development plan. Under the plan, BNP’s corporate and investment bank (CIB) is supposed to increase revenues at a compound annual average rate of 4.5% each year. However, revenues at the CIB have been shrinking. Although BNP ranked first in France for investment banking division with $134 million in revenues for the first half of 2018, according to Dealogic, it ranked 10th in the EMEA with $429 million in IBD revenues.

““

If you’re looking for the sort of graduate job that might pay you generous amounts of money from the start, you will probably have contemplated entry-level positions in banking, or with the Big Four accounting firms, or in technology. A new survey by the UK’s Institute of Student Employers (ISE) is a reminder of how hard it can be to achieve any of these jobs, and how much you’ll earn if you do.

For sheer numbers of graduate vacancies, it’s difficult to beat accountancy. This year, the ISE says there were more than 3,000 accountancy vacancies in the UK. They weren’t all with the Big Four (EY, KPMG, PWC and Deloitte), but the Big Four were unquestionably the biggest hirers of graduate accountants. IT (technology) jobs were also plentiful, with over 2,400 graduate vacancies. Investment banking was super-niche by comparison: the banks in the ISE’s sample only recruited a tiny 133 people into investment banking jobs in 2018.

This doesn’t mean you should give up on banking. It does mean you might want to broaden your horizon beyond the tiny band of front office investment banking jobs that everyone’s chasing: banks also hire people into technology and operations roles, and do so in big numbers (although the ISE didn’t monitor this).

The first chart below shows the ISE’s figures for the number of applications per job for graduate vacancies in each broad sector of the U.K. economy. They suggest the most desirable jobs are not in banking. Nor are the most desirable jobs in tech. – They’re in Fast Moving Consumer Goods (FMCG). This year, a massive 204 graduates applied to each FMCG vacancy, compared to ‘just’ 86 for investment banking, ‘just’ 67 for digital (ie. big tech companies) and just 36 for IT and telecoms. Big Four graduate jobs look easy to get by comparison: there were only 29 applications for each accounting and professional services (ie. consulting) job this year. The least desirable graduate jobs seem to be in the public sector, with only 12 U.K. students applying for each one.

The second chart below suggests that some of the highest paying graduate jobs in the U.K. in 2018 are in law firms, which pay new hires over £37k per head. Investment banks pay an average of £32.9k ($43k) in starting salaries; digital companies (tech firms) pay more at £34.8k. Accountancy and professional services firms pay an average of £24.6k, which might explain why fewer students want to work there.

The ISE points out that its figures are only taken from a small sample of the British graduate hiring market, and that its median pay figures tend to be higher than the rest. In niche investment banking jobs, however, they may understate the reality: headhunters who specialize in M&A jobs within corporate finance put total first compensation (salary plus bonus) at closer to £72k at top tier U.S. banks in London. The effort may well be worth the reward.

“”
Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com in the first instance. Whatsapp/Signal/Telegram also available.
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.)

Barclays must be wondering what it’s doing wrong. In the past year or so, the British bank has lost at least five juniors who’ve gone on to impressive things outside of finance. Insiders suggest the bank is becoming a breeding ground for technology entrepreneurs as a result.

The exits include: Alexander Opeagbe, a former power and utilities banker, who left after three years in June 2017; Kaysan Nikkhah, a London School of Economics graduate, who left Barclays in 2017; James Dean, formerly of Barclays’ origination and structuring team, who left in April last year; Lewis Crosbie, a former junior on Barclays’ M&A team, who quit recently to go to San Francisco; and Arjun Sofat, who left Barclays in February last year.

We’ve already profiled Sofat,who now runs Free Soul, a company offering nutritional supplements formulated for women, but the other ex-investment banking division juniors have so far gone beneath our radar.

Opeagbe is co-founder of Sparrow, an app which allows people to crowdsource travel solutions on busy commuter routes. Nikkhah has quietly become a venture capitalist, according to former colleagues. Dean founded Sensat, a company that converts visual and spatial data into a reality that allows computers to solve problems using artificial intelligence, and Crosbie left to go and run Sensat’s U.S. office in SF.

The new careers of Barclays’ former analysts and associates confirm that there is life after banking and threaten to set an example to current juniors with itchy feet. One Barclays junior who quit last year said that long hours were a problem: “We’d get to the office at 9am and at 9am the next day we’d go home shower and then come back in again. I can remember feeling very excited when I got six hours’ sleep a night.”

Barclays didn’t immediately respond to a request to comment. The bank introduced a raft of measures to make life easier for its junior bankers back in 2014.

““

It’s a simplistic strategy, but one that may work for some people. Identify the industries that graduates from top business schools are entering and try to follow suit. As they are typically offered more employment options, Ivy League MBAs can provide a road map to the hottest industries and companies that tend to pay the most and offer the best experience.

Looking at the latest employment figures, several signs point to consulting as a preferable option to investment banking and even hedge funds, at least early in a career. Roughly 25% of 2017 Harvard Business School graduates took a job as a consultant. Meanwhile, only 5% accepted offers at investment banks and just 6% of HBS grads went to work at hedge funds or other investment management companies (not including private equity and venture capital firms). At Yale School of Management, a whopping 36% of the same class went into consulting, while around 12% took jobs in investment banking with 2% working in investment management.

Perhaps a more interesting angle is to look at the business school that is known to be the top feeder for financial services jobs. At UPenn’s Wharton School of Business, more than 16% of 2017 graduates accepted roles in consulting. While 35% entered the general bucket of financial services, less than 12% went into investment banking while 3.7% took jobs at hedge funds.

A similar exercise can be done with Stanford Graduate School of Business, a program known as one of, if the not the best, feeder for jobs in Silicon Valley. Technology companies remained the top destination for Stanford graduates in 2017 with a 25% acceptance rate, but that was down eight percentage points from the previous year. Meanwhile, consulting gained four points to 20% of the overall total.

Initial pay

Generally speaking, a long career in investment banking or at a hedge fund will pay off more than one in consulting. Compensation for MDs at consulting firms averages around $300k. But investment banks see plenty of turnover due to work-life balance issues while more hedge funds have closed than opened for several years running, likely playing a role in the aforementioned placement numbers. If you look at the immediate payout, consulting stacks up rather well.

“It’s the job security,” said one MBA holder who just took an advisory job at PwC over one on Wall Street. “Plus, there’s less financial upside in banking then there used to be.” He accepted a higher-salaried position at PwC, not knowing if the lure of the Wall Street bonus would have become a reality.

For Harvard grads, median pay for first-year consultants was $150k, the same base compensation for hedge fund employees but $25k more than investment bankers. The median signing bonus for consultants was $25k compared to $50k for investment bankers, so first-year pay was essentially a wash. Hedge funds also offered a median signing bonus of $50k, but just more than half of first-year employees received one. In consulting, 95% of HBS grads received a sign-on bonus. The numbers were very similar at Stanford and Wharton, with the average consultant earning a higher salary during their first year but a smaller signing bonus. Yale didn’t break down base pay and bonus by industry.

Work-life balance

Compared to investment banking, consultants typically work significantly fewer hours, though there is often more travel involved. And “consulting gives you weekends,” the PwC consultant said. Hedge funds win out when it comes to hours and travel, though the day-to-day pressure is unmatched. One trader told us he limits the amount of liquids he drinks so that he doesn’t have to go to the bathroom during market hours.

Follow @BeecherTuttle

““

It turns out that Deutsche Bank isn’t the only bank coming down on fruit-related perks for its employees. Goldman Sachs has allegedly got a squeeze on fruits too and at least some juniors there are not happy about it.

Fox Business has a story detailing the discontentment. A Goldman junior allegedly attempted to expense a piece of fruit but was unable to, ‘because the food group didn’t meet Goldman’s stringent criteria.’ Nor is it just fruit. Fox says Goldman’s analysts and associates are subject to ‘strict budgeting’: at Manhattan West they can only order meals if they work past 8pm, and then they can only spend $25. They’re expected to be reachable by the firm at all times, but Goldman juniors have to buy their own phones and laptops for home. There are also complaints of 18 hour days and of lower pay than at other banks. During investor calls, Goldman regularly references its tight control of costs and has been praised by analysts for its squeeze on spending.

Lloyd Blankfein has been drawn into the resulting weal of resentment. While Goldman’s juniors are seething about fruit reimbursements, Fox says Blankfein is having a fancy new office with a view over the Hudson River built for him so that he will still feel wanted at Goldman after retiring as CEO in October. The move is said to be stoking resentment about haves (managing directors, partners, ex-CEOs) and have-nots (analysts and associates) at Goldmans, with the have-nots in the open plan offices on the $25 meal subsidy feeling hard done-by. A Goldman executive told Fox that staff get plenty of other benefits which they value, like a health club, dietitian, child-birth classes, mindfulness training, breast milk shipping, and one-on-one financial coaching administered over the phone at no extra cost.

Even so, it may simply be time for Goldman to implement a blanket approach to fruit reimbursement, particularly as David Solomon is said to be tightening the criteria for making partner this year so that it will be harder for non-revenue generating staff to reach the top. If analysts and associates in the front office are peeved, discontentment in the foundation (Goldman’s support functions) is likely to be higher still.

Separately, the City of London will be saved. With a seemingly hard Brexit around the corner and a socialist government in the wings, the City could have a hard time in 2019. It’s fortunate, then, that an ancient karmic stone, the “London Stone,” is being reinstalled at 111 Cannon Street, its home for hundreds of years until it was moved in the 1800s and then again the 1960s. The 76kg stone, which is said to have been brought to London by Brutus, the first king of Britain, has its own motto: ‘So long as the stone of Brutus is safe, so long shall London flourish.’ It’s being housed in a newly built office block. Previously it spent some time located in a glazed alcove in a sports shop.

Meanwhile:

M&A is booming: U.S. companies announced deals worth $66bn (£50bn) on Monday. Global M&A is up 40% so far this year. (Financial Times)

Under the Labour Party’s policy for giving shares to workers, HSBC would have to hand over £13.6bn to staff. (Twitter)

Under the policy, every company in the UK with more than 250 staff would set up an “Inclusive Ownership Fund”. Every year the companies would have to transfer at least 1 per cent of their ownership into the fund, up to a maximum stake of 10 per cent. (Financial Times)

Chris Whitman, a Deutsche Bank veteran who was given the task of allocating scarce capital across the investment bank, has left. (Reuters)

J.P. Morgan employs 5,000 technologists in Ohio and is adding 100 more. (BizJournals)

Jamie Dimon says it will be 25 years before bankers are forgiven for the financial crisis. (ZeroHedge)

Citi made two senior hires to its U.S. structured products business. (Marketwatch)

Credit Suisse is expanding its credit algo trading business into high yield bonds and has named Julian Pomfret-Pudelsky global head of credit algo trading . (Finextra)

Sniff synthetic sandalwood to promote hair growth. (New Scientist)

The sooner you take up a job you deem to be ‘good’ after leaving university, the greater the likelihood you’ll earn over $60k. (MSN)

““

It’s the equivalent of earnings season for London’s unlisted hedge funds and boutique M&A firms. Yesterday we had news of Balyasny Asset Management’s generosity in London. Today we have similar tidings from Citadel, the hedge fund and trading group run by U.S. investor Ken Griffin.

Citadel’s UK operations include Citadel Enterprise Europe (formerly known as Citadel Investment Group Europe), and Citadel Securities Europe. Citadel Enterprise Europe is all about investment management activities (ie. is a hedge fund). Citadel Securities Europe is all about the, ‘technology-enabled liquidity division in equities and financial derivatives across various European exchanges and market-making in centrally cleared interest rate swaps.’ In other words, it’s a high frequency trading operation which both makes markets for clients and trades on its own accounts.

Both parts of Citadel probably pay well, but the generosity at Citadel Enterprise Group is quantifiable. In 2017, Citadel Enterprise Group employed 240 people and paid them a total of £130m excluding employer’s national insurance. That’s an average of £542k ($712k) per head. At Citadel Securities Europe around £48m was spent on staff costs last year, but because staff were seconded across from Citadel Enterprise Group, it’s impossible to discern how many were employed and therefore how the £48m in allocated pay was distributed.

Citadel’s European operation has been hiring, and it’s been particularly hiring technologists. Last year, Citadel Enterprise Group added 26 people to its IT and administrative staff in London, an increase of 30% on staff numbers in 2016. It also added 18 investment management staff, an increase of 16%. At the end of the year, Citadel Enterprise Europe employed 128 investment managers and 112 IT and support staff in London.

All that hiring helped erode the company’s profit margin. In 2016, Citadel made £57m in profits on £155m in revenues. In 2017, Citadel made £59m in profits on £187 in revenues. Citadel Enterprise Group blamed its “investment” in headcount for the failure for increased revenues to feed through to the bottom line.

Photo: Getty

““

You might think that Deutsche Bank would have no need of chasing student talent. After all, the German bank – which is in the process of cutting 7,000 jobs from across the organization, said in May that around 110,000 students had applied for its graduate scheme globally. In fact, Deutsche Bank’s recruitment techniques are some of the most aggressive of the lot.

Faye Woodhead, a director within Deutsche Bank’s HR department, lays out how the bank chases talent in a new blog post. Perhaps the biggest differentiator is that Deutsche Bank actively sources candidates through LinkedIn, rather than simply networking and waiting for applications. Woodhead told the FT last year that the bank uses publicly available social media channels to build a profile of students it wishes to target, including those that belong to certain clubs and societies, and then contacts them directly to see if they are interested.

At the time, Deutsche Bank said it was the only bank to use such an aggressive approach to student recruitment – something Woodhead doesn’t shy away from. “We headhunt graduates,” she notes in her blog.

It’s not just LinkedIn. Deutsche Bank’s internal recruiters also use messaging service WhatsApp and invite students to interviews via text message, she said. Candidates can then log in to their system to choose an interview slot that works for them. Those who receive offers can download a mobile app that streams videos, posts internal announcements and provides online networking opportunities for students who have yet to start at the bank. DB also recently launched an interactive game where users navigate through hypothetical work scenarios and are scored on how well they react through the choices they make. (I did quite poorly).

When it comes to internal opportunities, Deutsche Bank uses artificial intelligence and algorithms to match current employees with vacancies. Woodhead said the bank is in the process of launching a new platform called “Yello” that connects candidates, recruiters, interviewers and event attendees, allowing them to engage with each other online.

Of course, Deutsche Bank isn’t the only firm to embrace technology to maximize its graduate recruiting efforts. Many banks including Goldman Sachs and J.P. Morgan now trim the herd through recorded and live video interviews. Some utilize software that can screen resumes, while almost every bank has made large investments in expansive online career hubs and social media campaigns aimed at the younger generation.

But no other firm appears to have gone to the lengths of Deutsche Bank. In fact, a graduate recruitment manager at another large bank told the FT last year that actively sourcing candidates through social media was a step too far. “Invading social media with cold, mature advertising feels like turning up at a university house party with a careers brochure,” they said.

Deutsche has no regrets. 110,000 applications aside, Woodhead is refreshingly honest about the current recruiting landscape for banks. “A few years ago we – and other financial institutions – were able to go onto campus and say ‘we are a bank, we are great, come and join us,’ and people would,” she said. “Due to the emergence of competitors outside of the financial services industry, and changing aspirations and demands from our talent pool, we now have to say ‘you are great, we need you, come and join us.’”

Follow @BeecherTuttle

““

There’s little sign of a flood of London-based bankers and traders in Frankfurt yet, but the expectation that they’ll arrive sometime soon hasn’t gone away. When they do, it could cause problems for Frankfurt’s existing inhabitants.

A report yesterday from Helaba, the German landesbank, suggested that the 25 foreign banks which have chosen Frankfurt as their base could create 2,000 new jobs by 2020 and 8,000 new jobs longer term. Given that overseas banks only employ 2,500 people in Frankfurt right now, the increase looks substantial.

While the rush of overseas bankers might be good news for anyone operating high-end restaurants or car dealerships in Frankfurt, it could problematic for other members of Frankfurt’s population. Helaba notes that Frankfurt’s residential housing market is already squeezed and that the situation can only get worse.

Last year, it says 5,000 new apartments were created in Frankfurt – an inadequate amount given that 30,000 new inhabitants arrived in the city between 2013 and 2015. More recent arrivals have been heading to Frankfurt’s peripheral areas, but Helaba’s real estate expert Stefan Mitropoulos notes that there’s a long lead-time on major building projects and that the supply shortage is unlikely to be resolved soon.

All of this suggests that London bankers who are already buying Frankfurt property as a hedge against Brexit are likely to be rewarded as property prices rise. It also suggests that existing Frankfurt residents who find themselves squeezed out of the local housing market (unless they own their own homes) are likely to be less amused. Helaba notes that incoming bankers are unlikely to suffer as a result of rising prices because they will be able to afford to pay the excess and many of the new apartments currently under construction are aimed at the upper price bracket.

Last week, one German banker told us of a colleague from London who was delighted with his purchase of a 200 square metre flat 10 minutes walk from the centre of Frankfurt, with a roof garden, costing only €1.6m. “Frankfurt real estate is super-safe and super-cheap. It’s the perfect hedge against the huge downside risk to London and to sterling,” he said.

““

Steven Roberts is an academic. In a leafy corner of Oxford, in a building built on the site of a now defunct iron-smelting works, he is busy turning out the kinds of minds both banks and hedge funds are want to recruit. It’s a relentless kind of work: “I’ve only had a few days off this summer,” he says. “The students here are all postgraduates, so they don’t take big undergraduate holidays.”

Roberts is a Professor of machine learning at Oxford University. He’s also director of the Oxford-Man Institute, which does, ‘academically outstanding research that addresses the key problems facing the financial industry.’ He was immersed in the world of machine learning long before it became synonymous with entryism. He has seen it evolve.

“I’ve had graduate students for 25 years,” says Roberts. “Decades ago, students used to go into the City or into academia. Now they also have the choice of Amazon, Google, Microsoft or Facebook. The students here don’t need to find jobs, they usually get poached before they’ve finished.”

Scarcity is an aid to employability. Roberts has between 40 and 50 students at any one time and only half specialize in finance. This is a lot compared to elsewhere. “We’re a big group by university standards – a lot of academic machine learning teams are just a dozen people.”

Predictably, applications have increased dramatically in recent years. “Very heavily over-subscribed” is the phrase Roberts uses to describe the rush of interest from students looking to burnish a first degree with an Oxford machine learning PhD or post-doctoral fellowship. “Every university that works in this domain has the same problem,” he says. “A lot of young people see that this is not just an exciting area to work in, but a gateway to opportunities in their career downstream.”

There are plans afoot to increase capacity to 70 students in future, but for the moment the course is oversubscribed 25 to 30 times. The selection process is, “very time consuming.” “The first pass is always academic merit, but we try to look at everyone as an individual, to interview as many people as we can.” The students who are chosen are “humblingly good.” “…We end up with staggeringly brilliant people.”

Staggeringly brilliant students don’t find jobs through the milk-round process. There’s no line of hedge funds waiting to seduce Roberts’ postgraduates with wine and canapes on campus. Instead, students attend big machine learning conferences like NIPS and ICML. Recruiters also attend and pick them off. “They’re like big recruitment fairs which have maintained their academic rigour,” says Roberts. “It’s become very much a seller’s market”

If you want to move into machine learning, an online or short course won’t have the same effect. Roberts says online machine learning courses such as that run by Andrew Ng are impressive for their “quality and depth of understanding,” but that most people who get jobs with big banks and big technology companies have PhDs. “It doesn’t mean you’re smarter. It means you’ve been exposed to machine learning techniques and have an experience base.”

Machine learning has applications far beyond finance. Financial services isn’t even its ideal realm of use (“In finance the rules change from move to move. You never have full ‘observability’ and you never know what was going on, except with hindsight.”) At Oxford, students are also engaging machines to explore everything from deep space to animal welfare. “A cheap camera in a chicken shed can monitor the motion of the birds and generate data that turns their motions into a series of patterns which correlate to stress and welfare outcomes,” says Roberts.

This variability is one reason Roberts has never jettisoned his job for the higher pay in hedge fund land. “I could get paid 10 times in finance,” he says (stressing that he by no means intends this as a negative observation), “but only one third of my academic life is spent working on problems directly related to finance.” There are crossovers anyhow: “In astronomy, you’re often looking for a weak signal in a hubbub of noise and we have been able to transport techniques from astronomy to applications relating to markets.”

Roberts regrets that universities don’t have resources to develop solutions for problems like global warming, food security, disease, ocean plastic, or solving nuclear fusion. Nor, though, does he judge his students for choosing technology companies or hedge funds ahead of academia or government. “Money talks. Students want to solve interesting problems,” he says. It’s just that solving commercially interesting problems usually pays more than solving worthy ones.

It’s fortunate, then, that hedge funds and tech companies are often no more than a temporary stop-off for many of Roberts brilliant people. “I never think it’s a shame that people go into finance,” he reflects. “They go into finance, and then they come back when they don’t need the money and can afford to live on an academic salary.” How long does this take? “It’s typically ten years or so,” says Roberts. “It depends how lucky they are.”

““

Millennium Management has hired another veteran quant, continuing the recent trend of hedge funds picking off senior sell-side trading talent before the end of the year. Grigor Peradze joined Millennium in New York this month as the head of equity derivatives research.

The hire is the latest example of hedge funds poaching from investment banks in just the last few weeks. At least two managing directors and one executive director at Goldman Sachs departed for roles at hedge funds in September. This includes Dan Cleland-James, the former head of synthetics and quant sales, who also left for Millennium. Lifelong sell-side quant trader Derrick Li joined Millennium in August.

And earlier this month, Laurent Henrio, the former global head of credit trading at SocGen, left the French bank for Axiom Alternative Investments. Corrado Giovanelli, a former managing director at Credit Suisse, recently quit the Swiss bank to join hedge fund Incus Capital.

The hiring of Peradze, Cleland-James and Li come at an interesting time for Millennium as the hedge fund recently partnered with Neil Chriss, founder of now-defunct hedge fund Hutchin Hill Capital. Chriss officially joined Millennium this month to build up a new quant trading business. While it’s unclear if the three new hires are reporting directly to Chriss, Millennium is certainly stocking up on veteran quants.

Peradze himself is a life-long sell-side quant, cutting his teeth at Lehman Brothers before stints at Merrill Lynch, Goldman Sachs and UBS, according to LinkedIn. He spent the last nine months as a director at Wells Fargo before joining Millennium. Peradze has his PhD in physics from Yale University and had his dissertation on string theory published in 2003.

Follow @BeecherTuttle

““

Another ex-J.P. Morgan artificial intelligence professional has left the role he took after leaving the bank: David Loaiza is no longer the chief data scientist at Point72.

It’s not exactly clear when Loazia left Point72, but the $12bn hedge fund confirmed his exit. Loazia himself didn’t respond to a request to comment.

Loazia arrived at Point72 in New York in May 2016. He previously spent nine years at J.P. Morgan, latterly as chief data scientist for compliance analytics.

At Point72, Loazia was in charge of the controversially-named Aperio big data research team. The team, which was born in 2013, was originally led by Michael Recce, a former information systems professor. However, Recce left after only 15 months after struggling to produce rapid results or explain the team’s methodology to Point72’s portfolio managers. Loazia, who has a PhD in nuclear engineering and an MBA from the University of New Mexico, was brought in to replace him.

It’s not clear what Loazia’s exit means for the Aperio initiative at Point72. The fund also has a machine learning unit run by Matthew Granade, a managing director and head of market intelligence at the firm. One employee suggests that Aperio has been dissolved into Granade’s big data group. If this is true, Aperio’s disappearance is likely related to the fact that Point72 was sued in April by another company called Aperio, which said it was sowing confusion among its customers.

Loazia isn’t the only ex-J.P. Morgan AI professional to move on recently. Afsheen Afshar, the former head of data science at J.P. Morgan’s corporate and investment bank, also left private equity fund Cerberus Capital Management last month.

““

Morning Coffee: The happy life of the ex-Deutsche CEO luring bankers with $10m pay packages. Chaos at BofA?

Zaoui & Co’s massive increase in profit not matched by equally massive increase in pay

Frankfurt headhunters report rising interest from British bankers

Ex-Goldman banker’s warning: Do NOT quit finance, it’s a huge mistake

How Facebook lost its hiring edge and banks could benefit

There’s been a rush of exits from Goldman Sachs’ NY electronic trading team

Meet the ESSEC MBA that’s tailor-made for the finance sector

Morning Coffee: Furor over Credit Suisse technologist in fishnets. M&A bankers left out in the cold

Massive pay at Balyasny a reminder why everyone wanted to work there

BNP Paribas is strengthening its London investment banking team

Tech, banking or Big Four: How much they pay, how hard it is to get in

Exceptional juniors keep leaving Barclays and becoming entrepreneurs

The case for consulting over investment banking and hedge funds

Morning Coffee: Goldman Sachs also has fruit-related cost cutting policies and its juniors are fed-up. Karmic stone to save City of London

Meanwhile:

And now for the giant pay at Citadel in London

Deutsche Bank headhunting, texting students in new recruitment drive

Why Frankfurt residents may end up resenting London bankers

The man whose students hedge funds and tech companies are desperate to hire

Millennium won’t stop poaching sell-side quants

Point72 said goodbye to the chief data scientist it hired from J.P. Morgan

Related articles:

Related articles:

Related articles:

Related articles:

Related articles:

Related articles:

Related articles:

Related articles:

Related articles:

Related articles:

Related articles:

Related articles:

Meanwhile:

Related articles:

Related articles:

Related articles:

Related articles:

Related articles:

Related articles:

Related articles: