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Several banks and hedge funds have increased the value of the compensation packages that they are offering to entry-level quantitative PhD graduates to become quantitative traders specifically involved in automated trading.

In fact, some banks offer entry-level quants with PhDs from top universities base salaries as high as $125k and hedge funds offer up to $175k base salary. Exceptional entry-level PhD quants can receive total compensation packages, including sign-on bonuses, worth up to $400k, according to recruiting firm Options Group.

While electronic sales-traders are vulnerable for headcount reductions, candidates with the right skill set receive, on average, 15% to 20% increases in total compensation to switch firms, with an upper limit of 25%.

“Banks continue to invest in improving the quality and depth of their electronic platforms while enhancing their reporting and compliance,” says Push Patel, managing partner at Options Group. “The forecasted increases in compensation reflect the high levels of competition among firms to retain and recruit these professionals.”

Ben Hodzic, a director at recruitment firm Selby Jennings, confirmed that those compensation figures are accurate for PhD graduates in finance, economics and econometrics coming from an Ivy League university with a Bachelor’s or Master’s degree in a STEM field such as engineering, statistics and computer science.

Banks and hedge funds are hiring quant PhDs right after graduation

Banks, hedge funds and proprietary trading firms are hiring quantitative researchers and quantitative developers to build and upgrade research platforms and work on optimization, while other quant candidates are tasked with contributing to alpha generation on a systematic trading desk, per Patel.

“Discretionary funds have also started to hire these entry-level candidates to create better screening mechanisms to help identify trading opportunities, utilizing data science instead of just pricing quants,” he says. “Hiring entry-level quants are a part of larger programs to, in general, innovate for a wide variety of firms.

“Entry-level quants are not actually trading right out of school, but a few of them are involved in research that is applied to alpha generation,” he says.

Financial services firms are hiring quants across the front, middle and back office

Maxwell Lennon, a VP of quant, tech and data (QTD) at recruitment firm GQR, says that PhD/Master’s graduates with STEM degrees are always in demand, but some of the best-performing programs he has seen for engineers are software management at Carnegie Mellon and computer science at MIT, as well as Oxford and Cambridge.

For quant researchers, they are usually coming from a mathematics or statistics background – the University of California, Berkeley, and Stanford for stats; MIT and Harvard for math.

Other quant feed schools include all Ivy League universities, Illinois Urbana, Michigan, NYU, Moscow Institute, ETH Zurich, Chicago Booth and the Indian Institute of Tech (IIT). Graduates from such schools go on to work as front-office pricing quants, quant traders, middle-office risk quants, software engineers, quant researchers, data scientists and, at Goldman Sachs, strats.

“Probably the greatest volume of quants that I see come from Master’s in financial engineering (MFE) programs at Cal-Berkeley and operations research at Columbia University. Lennon says. “An exceptional PhD graduate has a high GPA in math or stats and sometimes physics, but the hiring manager needs to prefer that, because there are some of teams that steer away from hiring physics grads considering their different approaches to solving problems.

“Other teams think they are the best, specifically for machine learning, but this is all a matter of opinion and a theory with a lot of detractors,” he says.

Exceptional PhD graduates enjoy multiple job offers

A PhD in a STEM field from a top 50 global university is the standard for being a desirable quant candidate, according to Options Group.

“Clients are looking for individuals who can be creative, technically hands on, most importantly, not theoretical,” Patel says. “Candidates from a top 50 global STEM program and an undergraduate degree with a high GPA are viewed more favorably than a mediocre undergrad and a strong PhD.

“Being ranked in the top 10% of the International Olympiads is also very desirable; however, what is key is the combination of being very quantitative and possessing sophisticated technical skills,” he says. “More recently, the demand to hire professionals with a background in artificial intelligence and machine learning is rising, and we expect this trend to continue.”

Finance PhD graduates from the University of Pennsylvania’s Wharton, the University of Chicago’s Booth, Harvard and a couple of other elite business schools are extremely sought-after for quantitative research, asset pricing, portfolio management/construction and strategy positions, per Hodzic.

“Within the finance field, there is heightened interest in research specific to asset-pricing techniques, as these are ever-evolving,” he says. “The schools listed here are great representations of where some of the original pricing models were founded, and have since been built upon using new modeling theory, statistics and programming to better fit the models and creates more optimized portfolios for clients.”

Rising pay as banks and hedge funds compete with other industries for talent

It’s not just banks that going after such candidates. An increase in data-driven strategies is ramping up the competition for talent, per Lennon. Hedge funds are also seeing this talent as rare, and are going above and beyond to pay a premium to secure them, per Hodzic.

“For candidates that have this [type of] PhD, a background or undergraduate degree in statistics or mathematics is seen as even stronger and worth paying a higher premium for,” he says. “These are small programs, so the best talent coming from each class is extremely selective and most of them are so well networked that they come out of school with three or more offers already in hand.

“This gives them a lot of leverage so other firms have to bid up to compete.”

Technology is evolving very quickly, and knowledge of new approaches and techniques and the ability to apply them are inherently a competitive advantage across many industries, per Patel.

“Every industry is involved in technology – from automobile manufacturers to pharmaceuticals to consumer and retail companies – so the financial industry is also competing with many other companies,” he says. “Part of it is simply a matter of supply and demand.”
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Do you want to move jobs now? Even better, do you want to move jobs and have all the restricted stock you’ve amassed swapped for cash? It can still be done. It’s late November, but banks are still hiring before 2017 bonuses are paid.

As we noted yesterday, Goldman Sachs is still hiring-in managing directors from rival firms. However, Goldman isn’t the place to go if you want a cash buyout – the firm typically defers its stock for three years and imposes restrictions on the sale of stock for up to six years. If you join GS your existing stock will simply be transferred to this vesting schedule. – The big cash buyouts are on offer elsewhere. If you want one, headhunters suggest you try Jefferies.

“Jefferies are still building,” says one fixed income headhunter who works across Wall Street and London. “They’ve got a good story to tell and are amassing some very good people. They also pay bonuses that are 100% non-deferred cash up to well beyond $1m, so you have lot of people interested in moving over there.”

Jefferies’ recent hires reflect its appeal. In November alone it’s added equity analyst David Katz (from Telsey Advisory Group), equities trader Brett Finer (from trading firm Tourmaline Partners), tech bankers Bill Song (from Wells Fargo) and Erik Marth (from Morgan Stanley), and emerging markets trader Leandro Infantino (from Nomura). – All at managing director (MD level), to say nothing of additional hires in the junior and mid-ranks.

Of course, Jefferies’ cash bonuses aren’t entirely unrestricted. – The bank famously stipulates that they’re paid back in full, including tax, if recipients leave within a year. It’s not clear how this applies to buyouts of restricted stock belonging to new joiners, but headhunters insist the pay-back clause isn’t an issue. “It’s never caused a problem when I’ve placed people there,” says one.

If the prospect of paying back your entire gross bonus if you leave is an issue, however, Jefferies isn’t the only bank at the cash bonus and cash buyout party. In London, small banks (like Jefferies) are exempt from the rules which require banks to defer bonuses. – If you want cash, all you need to do, therefore, is to find another firm that’s classified as “tier three” by the Financial Conduct Authority. This includes buy-side firms like Vanguard and Brevan Howard. It also includes most boutique M&A firms.

Andrew Pringle, managing director of London recruitment firm Circle Square, says boutiques are buying people out for cash too. “We’ve just moved a vice president from a major bank for a cash buyout of £140k ($185k),” he says. “Clients are trying to build their franchises for next year. In some cases, these roles have been empty for a while and people are deciding to do a buyout now rather than waiting until 2018 when everyone else will be hiring as well.”

Cashing out of restricted stock will be particularly appealing if you’re at a bank which imposes long bonus deferrals and whose stock isn’t expected to perform well in 2018. Deutsche bankers might want to take note: the bank famously defers all pay for top managing directors for five years, and banking analysts at J.P. Morgan ranked Deutsche last in their investment bank stock picks in a note out yesterday.

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Photo credit: Looking up Wall Street by Richard Schneider is licensed under CC BY 2.0.

While most people are waiting until their bonus lands before even thinking about moving jobs, a handful of traders and strategists have been leaving big banks to switch to the buy-side. Millennium Management, the $35.3bn hedge fund run by Izzy Englander, is indulging in some last minute recruitment before Christmas.

Simon Statman, a former gas trader at J.P. Morgan who moved across to Citigroup in December last year, joined Millennium earlier this month, as did Josh O’Byrne, a Citi FX strategist who joined the hedge fund in a similar role. Meanwhile, Alexander Soreff, a former emerging markets interest rates trader at Unicredit who has spent the past three years as a portfolio manager at the Second Swedish National Pension Fund in Gothenburg, also joined Millennium earlier in November. Michael Abittan, a former Credit Suisse and Brevan Howard trader who was latterly at Balyasny Asset Management, also joined late last month.

Millennium also brought in Kevin Connell, the former had of high yield syndicate at Royal Bank of Scotland as an analyst within European credit in October, Craig Loftus, who joined in late September after more than 12 years working in equity syndicate at Goldman Sachs and Maria Jaworska, who was latterly a fixed income research associate at UBS.

In 2016, headcount was 208 people in its UK office, according to accounts released in July this year, up from 198 in 2015. Millennium has consistently been building its London office for the past two years, but so far in 2017 there have been more senior exits than new hires.

Arnaud Langlois, a former partner and trader at Millennium, launched his own hedge fund – Terreneuve Capital – in July. Andrew Dodson, an oil trader and partner at Millennium, also left in July, while Charaf Tahiri, a former director at Citigroup who joined Millennium in 2014, left in August.

More recently, Oliver Haslam, a former partner at Edoma Partners – the defunct hedge fund set up Pierre-Henri Flamand, the former co-head of Goldman Sachs’ principal strategies group who is now at Man Group – has left Millennium after more than four years at the firm.

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I’ve spent 18 years in banking. I’ve been a managing director at Goldman Sachs and I’ve changed jobs a lot. In a fifteen year period, I switched jobs six times. My friends dropped away from finance and, hey, I’m still here!

Why did they go? Well, I started in banking in 2009. A bunch of them quit right after 9/11. They didn’t like what New York was like then. Then again in 2002 I had some more friends leave at the bottom of the recession. And again in 2008, and in 2011, and in 2016. Some left voluntarily. Some didn’t. Every time, I stayed on.

Don’t get me wrong: there have been many times I’ve thought of quitting banking. I’ve stood on the ledge. I’ve been knocked back by difficult markets, bad bosses, and being (metaphorically) punched in the face and stabbed in the back by colleagues. Every time, I talked myself down.

I’ve always told myself that it’s not me: it’s the game. That the banking game is a harsh one and that there’s nothing wrong with my skills, my abilities, my professionalism. That success is about perseverance and not letting the environment get you down.

Too many people think that succeeding in banking is about being loud and political and kissing up to your boss. Too many others think it’s about being technically proficient.

It’s neither: succeeding and surviving in banking is about being resilient, adaptable, curious, and above all, thick-skinned.

Resilience comes from watching your energy and your self-confidence – and is therefore related to how thick-skinned you are. If you’re in banking, you’re probably very competitive, but you don’t always need to win. Sometimes you just need to stay in the game. Don’t always operate at peak performance. Conserve yourself. Make time for family, friends, exercise and meditation. Share your problems with other people.

And then, because banking changes quickly, you can’t assume you have a job for life. That job you’re doing now might not exist in 10 years time. I know no one who started with me in 1999 who’s doing the job they had then. In fact, most of them were unaware that the job they’re doing now even existed 18 years ago. If you want to survive you need to watch the trends and ride the opportunities. Adaption means switching from buy-side to sell-side, from investment banking to sales and trading, from sales to trading, from research to technology.

This is where it pays to be curious. You’re not going to learn what’s outside your bubble if you don’t keep looking. You need to eep reading. Keep talking to colleagues at the bank who are not in your area – ask them what they do, how it’s changing, what they think about the future.

If you want to excel you need to be humble. You may be working hard. You may be making good money, but there’s a sea of things you don’t know. If you want to stay in banking while everyone else leaves, you need to learn this pretty fast.

What I Learnt on Wall Street is an education focused business founded by an ex-Goldman MD and Family Office allocator. His firm has just launched: The 5 keys to unlocking a successful career in Finance, with the 1st class being held on November 23rd.

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Technologists should embrace their geekiness when trying to woo Wall Street women.

After graduating with a biology degree from Yale, Anne Wojcicki worked as a Wall Street biotech analyst for a decade, including stints at Investor AB, Ardsley Partners, Andor Capital Management and Passport Capital. She saw so much “Wolf of Wall Street” behavior and had so many “We’ll talk about it after the lap dance” conversations when she that she thought she might never want to get married, the New York Times reported. It turns out her type was Silicon Valley Brainiac, not Wall Street bro.

Wojcicki still speaks fondly of her oddball courtship with Google co-founder Sergey Brin. He would leave her voicemail messages in Morse code or notes about where to meet him in Braille.

“And I’d be like, ‘Ugh, can’t you just tell me where to go?’” she told the Times. “But it was fun. I feel like you need to balance each other in relationships. Somebody can be totally insane, and then somebody has to buy food and pay rent.”

Bankers who want to communicate with quants and technologists could try adopting a similar technique if they want to bond.

Separately, senior Standard Chartered executives have hatched a plan to help the bank to start punching above its weight.

The head of StanChart’s investment bank is aiming to boost revenue growth by a compound annual rate of 5% to 7% in the medium term, while trying to keep risk down and avoid past mistakes.

The Asia, Africa and Middle East-focused bank will boost income after two years of restructuring by cross-selling to more clients in those markets and taking advantage of intra-regional trade initiatives.

That’s a change of tack after a two-year restructuring under chief executive and former J.P. Morgan banker Bill Winters, who has cut more than 15,000 jobs and axed business lines such as Asian equities, according to Reuters.

After coming through the financial crisis relatively unscathed, StanChart ran into trouble when global commodity prices crashed and bad debts started to rise on its books. In response, the bank cut $1.6bn worth of annual revenue by removing sub-scale and unprofitable businesses, but the focus is now on restoring growth.

However, the bank will likely continue to steer clear of equities, a business line it mostly closed in 2015.

Meanwhile:

Global banks will implement their relocation plans early next year to guarantee they’re able to have new offices inside the European Union running by the time the U.K. exits. (Bloomberg)

Would modifying MiFID II keep the City of London competitive after Brexit? (The Banker)

Alex Pabon, one of four traders convicted of manipulating Libor in July 2016, is making progress in his battle for acquittal. (Quartz)

Citigroup has been shuffling its top investment banking brass, including a significant number of promotions. (Financial News)

Citigroup and BNP Paribas both dropped down a notch in the latest list of the world’s most systematically important banks, meaning they will have to hold less capital to compensate for their size and complexity. (FT)

As coders and conspiracy theorists are making millions trading digital currencies, the cryptocurrency boom has almost entirely eluded Wall Street, but J.P. Morgan’s former ECM boss wants to change that. (Financial Review)

J.P. Morgan may start helping clients to trade bitcoin futures, despite CEO Jamie Dimon’s criticism of the cryptocurrency. (WSJ)

Republican lawmakers who sped a tax bill through the U.S. House last week handed out plenty of goodies to Wall Street’s wealthiest. (Bloomberg)

Deep learning – a subset of machine learning – has many potential applications for Wall Street. (Winton)

Dan Loeb, the hedge fund manager and an advocate for charter schools, lectured New York City Deputy Mayor Richard Buery, one of the city’s highest-ranking black officials, for being “smug and satisfied” and failing to help “poor black kids.” (Bloomberg)

New York City is establishing guidelines to bring some legitimacy to coding schools after the industry was shaken by several unexpected closures and students were left jobless and in debt. (Bloomberg)

Asians tend to be notably absent at the highest levels of corporate America. (Bloomberg)

Photo credit: Marilyn Monroe in “Gentlemen Prefer Blondes” (1953) via Flikr creative commons
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While investment banks are awaiting regulatory clarity before they start shifting jobs to Continental Europe after Brexit, credit rating agencies are already bolstering their operations in Frankfurt.

Fitch is planning to create 30-40 jobs in Europe – the majority of which will be within its 50-person Frankfurt operation – in advance of regulatory demands, a company spokesperson confirmed. Alongside Frankfurt, Fitch will also be hiring people in Barcelona, Madrid, Milan, Paris, Stockholm and Warsaw. Meanwhile, Moody’s is also preparing to expand its Frankfurt office, according to people on the ground, although it has yet to decide on a firm number of new hires. The new recruits will primarily be analysts.

Fitch currently has around 500 employees in London, but we understand that these roles will be new jobs created in Frankfurt rather than relocated from the UK. One Frankfurt insider said that Moody’s initial recruitment is for “regulatory and risk management jobs” and that specialist in this area had already been hoovered up on the ground by a variety of financial services organisations. “They know the market is incredibly tight already,” he said.

Standard & Poor’s did not respond to requests for information on its hiring plans.

ESMA, the European Securities and Markets Authority, asked S&P, Moody’s and Fitch to draw up contingency plans if the UK leaves the European Union single market when it officially leaves the bloc in 2019. The assumption was that they would wait, but recruitment is already underway.

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On paper, 2018 should be an awful year for London banking jobs. In fact, London finance recruiters are peculiarly bullish about the year to come.

The case against finding yourself a new front office finance job in London in 2018 is all too clear. 2018 is the year preceding Brexit and as we’re endlessly reminded, jobs are due to start moving out of the City in the first quarter. Banks are already priming new offices in Paris, Frankfurt and Dublin; international schools are already reserving places for banking progeny; local housing markets are already heating up. Couple this with recruitment firm Morgan McKinley’s estimation that new banking jobs advertised in London were down 20% year-on-year in November, and it all looks a bit doomy.

Recruiters, however, seem to be inhabiting a parallel universe.

“The extraordinary thing is that it looks like there will be a lot of hiring in London next year,” says Christian Robbins at macro-focused fixed income recruitment firm Tradestone. “Clients are telling us they’re gearing up.”

“We’re really quite busy. I’m pretty positive about next year,” says the head of an equities-focused search boutique, speaking on condition of anonymity. “There’s a lot going on – people are hiring.”

“We’re incredibly busy – we already have loads of mandates for next year,” echoes Andy Pringle at recruitment firm Circle Square, which focuses on investment banking and capital markets hires. “There’s going to be a lot happening.”

This ebullience is partly to be expected: finance recruiters are optimistic by nature; even when the roof is falling in, they’ll insist they’re warm and dry. However, when things are going badly, pain is often discernible, and for the moment recruiters seem blithely pain free.

The cycle is turning

London recruiters’ enthusiasm for 2018 can be traced to the banking revenue cycle. After several difficult years, revenues are expected to return to growth, and growth should bring hiring.

In a research note this week, J.P. Morgan’s banking analysts predicted that revenues in fixed income sales and trading will rise by 4% next year, that equities revenues will rise by 3% and that investment banking division (IBD) revenues will rise by 2%. This follows the analysts’ predicted declines of 11% and 6% in fixed income and equities revenues for 2017, and predicted IBD growth of 10%.

In other words, while IBD revenue growth might slow next year, markets revenues should swell.

“The cycle is turning,” says the head of the equities boutique. “We had a long lull from mid-2015 to early 2017 and since then things have picked up. Clients are implementing growth plans for next year.”

In the macro (FX and rates) trading world, optimism is traceable to the changing rates environment. Goldman Sachs is predicting that the Federal Reserve will hike rates four times in 2018 and the European Union is expected to begin tapering quantitative easing. “With the macro and rates environment changing, everyone generally feels more positive. Clients think 2018 is going to be an interesting year and they want to prepare for that,” says Robbins.

And in M&A, the expectation is that global deal values will increase and that UK-based firms will be at the forefront of any activity. “UK corporates want to buy internationally so that they can generate overseas incomes in different currencies,” says Pringle. “Banks and boutiques need staff to work on these deals.”

Brexit-exits are chimerical

For the moment, banking recruiters in London seem untroubled by the prospect of their clients and candidates disappearing to mainland Europe. Again, this may be a question of wishful thinking, but they have their reasons.

“Brexit isn’t going to affect M&A jobs,” says Pringle. “Or if it does, it will only affect M&A jobs in big banks. You have plenty of people in London working in M&A boutiques and those boutiques are still hiring heavily.”

Similarly, although Bank of America said last week that it plans to move 200 sales and trading jobs to Frankfurt and Paris imminently, there have been indications that fewer markets jobs might move than originally expected. HSBC, for example, originally said it would move 1,000 jobs to Paris, but suggested last month that this could be reduced. To begin with at least, banks could practice “back to back trading” in which trades would be booked overseas but executed in London and “reverse solicitation”, in which London’s financial prowess would be solicited by European clients rather than actively touted to them. This being the case, there are claims that the City could operate (almost) as usual.

Wishful thinking?

Of course, this might all turn out to be wishful thinking, as some recruiters admit.

“It feels positive now, but revenues can hit a brick wall at any time,” says the equities headhunter. Having hired heavily in 2017, some banks have already said they’ll sit on the sidelines next year: Credit Suisse CEO Tidjane Thiam told investors the bank has no intention of continuing to recruit in equities, for example, and that he now wants to see revenues come through in the next 18 to 24 months.

Meanwhile, the new notion that Brexit might not be so bad for London could be upended at any time. If so, headhunters in Europe are ready and waiting: “Hiring over here has already picked up,” says Tim Zühlke, a partner at Fred Executive Search in Frankfurt. Despite the ongoing lack of clarity over Brexit, banks like Goldman Sachs, Citi and UBS have already committed to a bigger Frankfurt presence: “Whatever happens with regards to Brexit, banks are going to see Frankfurt differently in future,” says Zühlke.

There’s also the possibility that Brexit is a distraction from an even bigger threat to London banking jobs in the form of a socialist government under Jeremy Corbyn. Last week, Bobby Vedral, a London-based partner at Goldman Sachs told private equity investors that a Corbyn government would be disastrous for Britain’s finance industry and turn the country into a, “Cuba without the sun.”

“Everyone’s scared of Corbyn,” confesses the head of the equities search boutique. “Personally, I think he’s peaked,” he adds hopefully.

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Photo credit: London Street Photography by Paul Bence is licensed under CC BY 2.0.

Nikolay Storonsky left investment banking two years ago, but he’s working harder than ever. The former Credit Suisse and Lehman Brothers trader quit in 2015 to launch Revolut, a fintech that started life as a payments app, but has since evolved into something few start-ups achieve – an actual bank.

“As long as something needs to be done, I can work 12 hours a day, I can work weekends and clock at least 85 hours – it is not a problem,” he says. “It was intense on the trading floor, but this is intense squared.”

Revolut has raised a massive $83m in venture capital since its launch in July 2015, and has just applied for a European banking licence to make the step into the mainstream. It’s been expanding at a rapid rate; Storonsky says Revolut hires 25 people every month, and that it now has 300 people working there – up from 200 in August. 50% of these people work in technology roles, but more recently it’s been hiring for business development, product management and people to lead expansion into individual countries.

Storonsky says they want “motivated, driven” people who are willing to work as long as it takes to get something over the line. If that involves a 14-hour day, so be it. While this sounds like a vocation suspiciously suited to investment bankers, used to burning the midnight oil and being at the beck and call of their employer seven days a week, Storonsky is not interested in hiring them.

“People who have worked in investment banking usually simply can’t handle the pace of a start-up,” he says “We come up with the idea for something and just build it to see how it works. Corporates, especially banks, over-think projects and take years to execute. We do something in two weeks that would take a bank two or three years to complete.”

It’s not a question of work ethic, he says, but more one of the right mentality.

“I wouldn’t say people in investment banking work as hard as we do,” he says. “We’re much more motivated to build things and change the financial services industry. In banking people are demotivated – even if you have good ideas, it’s very difficult to execute them in a large bank. If you’re any good, you should leave for a start-up.”

Revolut has hired a handful of former investment bankers, however. Last month, George Robson, who spent 16 months on the UK and Ireland coverage division at Morgan Stanley, joined Revolut’s product team. It has also recruited from J.P. Morgan and RBC Capital Markets over the past six months.

But Storonsky says that former investment banking employees usually have some start-up experience, and are “young, and hungry for success”. The average age of Revolut employees is 28, and Storonsky has said previously that he likes to hire people who want to “grow themselves” and that “growing is always through pain”.

“The reality is that if you’ve been working for a bank for seven or eight years, it’s very hard to switch into a start up,” he says. “They tend to be less agile and can’t think outside of the box. If you’ve worked in banking for two years, you have some good training, are motivated and it’s easier to shift your mentality.”

Revolut falls under the growing roster of ‘neobanks’ challenging traditional players with slick technology and low-fee services. It started out as an FX app, but has since expanded into business accounts, retail accounts, loans and mobile phone insurance. Storonsky says the focus is now on growing beyond Europe – initially to Canada and Singapore – but admits that it will “take a lot of time”.

Some large retail banks appear comparatively sanguine about the new breed of fintech challengers. At a conference earlier this month organised by New City Agenda, Barclays CEO Jes Staley said that regulation was often too big a hurdle for most fintech start-ups.

“Most technology companies who get involved in finance…only up until the point when they’re about to be regulated,” he said. “I think if you go to a tech company and ask do you want to do CCAR [Comprehensive Capital Analysis and Review] testing in the United States or have the PRA [Prudential Regulation Authority] with you every week…they stop.”

Storonsky, however, believes that big banks have got it all wrong. Regulation, like anything else, can be tackled with technology, he says.

“Banks approach to regulation has been to throw armies of compliance staff at the problem,” he says. “But they’re weighed down by legacy technology. For us, compliance is a technology issue that can easily be solve by an automated system overlaid with artificial intelligence. We can do as much as an army of compliance professionals with one good data scientist.”

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Wells Fargo Securities has been adding experienced investment bankers and has also been moving full speed ahead with its university recruitment efforts to stock its analyst program with talent.

Here’s what you need to know about the bank’s campus and lateral recruitment initiatives.

Wells Fargo Securities campus recruitment

Wells Fargo Securities has various banking, capital markets and advisory divisions, including underwriting, M&A advisory, sales, trading and research desks, working with corporate, government and institutional clients.

The bank hires interns and full-time analysts for the following businesses: investment banking; Eastdil Secured real estate investment banking; the markets division, which includes sales and trading; asset-backed finance; municipal products; Investment Portfolio Group, a credit-focused investment team based in San Francisco; public finance, originating and structuring transactions for municipal and not-for-profit bond issuers; and research/economics.

“We recruit from both core and non-core schools and also source talent from national diversity partnerships and internal feeder program efforts such as our freshman and sophomore forums,” says Leah Stewart, a senior vice president of talent acquisition and a recruiting manager of wholesale campus recruiting at Wells Fargo.

This summer, 190 interns participated in the Wells Fargo Securities Summer Analyst Program. The internship program has experienced 49% growth since 2013. More than 80% of summer interns are offered a full-time analyst role.

“We’re able to recruit both at the very junior levels, including interns and recent college graduates, who feed into various training programs, including investment banking and middle-market banking,” says Brian Drake, a senior VP and talent acquisition manager at Wells Fargo. “The [preferred approach] for us is to bring in talent at that level, train them, acculturate them to the company and allow them to grow and move up throughout the company, depending on what they want to do

“We have our core schools where we’ll host on-campus information sessions and first-round interviews, but we also take write-in candidates,” he says. “We’ll broadly publicize the positions we have at many more universities and allow those students to apply to those programs through our websites.

“Including Wells Fargo Securities, we have more than a dozen internship programs across Wells Fargo – some are rotational, while some are much more targeted on a specific product group or industry coverage area.”

Wells Fargo Securities experienced/lateral recruitment

Drake oversees both campus and lateral recruitment for the wealth and investment management (WIM) division, which includes product client groups, the brokerage team, wealth management, asset management and the institutional retirement group, and the wholesale banking division, which includes investment banking, middle-market banking, corporate banking, government banking, institutional banking and business banking.

“There are always gaps to fill or specific talent needs across the businesses, and our lateral recruitment teams include an internal executive recruiting group, which covers jobs at or above a certain level and comp threshold,” Drake says. “We have an internal referral process as well.”

The bank’s recruiters put a lot of energy into bringing in military veterans. There is a 10-week internship program for recently discharged veterans that started in the Securities group two years ago and has since expanded across the bank, tripling in size.

“The goal is to introduce them to an area of the business they might be successful in, to train and acculturate them and hopefully place them into a full-time role. But even if that doesn’t work out, they’ve secured great training and a line on their resume that they can use to get a job in another part of our bank or elsewhere in the industry,” Drake says.

Recruiting mid-level lateral candidates for the investment banking division is exceptionally competitive, per Drake. Some IB roles are based in New York and other markets but most are in Charlotte, N.C.

“It is a tough business, obviously, and we push our recruiters and hiring managers hard to have diversity in every candidate pool that we evaluate,” he says. “We look for individuals with industry experience who meet the qualifications of the position for whatever group within investment banking team that they’re applying to, and often a specific type of candidate that is more attracted to Charlotte.

“If you’re a relatively young professional fresh out of school, then you may be more attracted to a New York type of environment, so we have to counteract that for our Charlotte opportunities – there are a lot of great amenities here, and it tends to attract more of the [investment banking] professionals with young families. That said, the Charlotte region offers a significant bang for the buck when it comes to cost of living, so when the recent grads arrive, they end up liking it.”

In addition to targeting investment bankers at Bank of America, which is Wells Fargo’s largest competitor in Charlotte, the bank draws talent form boutique investment banks and private equity firms from across the U.S. In addition, J.P. Morgan is expanding its commercial banking presence in Charlotte, and the Wells Fargo recruitment team keeps tabs on bulge-bracket bankers who may be open to a move.

“We want to pull people from the top five Wall Street banks, and a lot of those are based in New York – once they get here [to Charlotte] they love it, but sometimes it takes a bit of time to convince them,” Drake says.

Recruitment driving a change in culture

The scandals that have rocked Wells Fargo over the past few years have had an impact on recruitment, even for areas like investment banking that have not been implicated in any of the alleged wrongdoing.

“We’re in the midst of very substantial and significant change to the very center of who we are as an organization,” Drake says. “The sales practices situation took place outside our groups, but it is causing some real changes throughout the organization – and investment banking is a part of the whole, even though they think of themselves as being separate sometimes.

“Anyone we speak with who displays a reluctance to embrace change or a lack of resiliency, they’re just not going to survive here,” he says. “And culturally, we don’t tolerate people who don’t demonstrate an ability to get along well with their peers and others at the bank.

“People at other firms may not care about the amount of broken glass or the number of bodies they leave in their wake to get results, but we want to hire people who treat others with the dignity and respect they deserve and have a resiliency to change and demonstrate our core cultural requirements.”
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Photo credit: Wells Fargo 5/2014 by Mike Mozart is is licensed under CC BY 2.0.b
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Now’s not necessarily the time to go into contracting. As we’ve variously reported, Credit Suisse cut 3,050 contractors in the year to October and those who are left behind at the Swiss bank say life there is a bit of misery. Simultaneously, banks are said to be resorting to their standard Christmas practice of forcing a month’s holiday upon contractors in effort to save costs during December. None of this, however, has dissuaded, one veteran London bond trader from the pursuing the contractor pathway himself.

Paul Osborn had a good run as a trader. His trading career began at Deutsche Bank in 1985 and ended at Daiwa (where he built an entire fixed income trading desk from scratch) in February 2016.

Since then, he’s been “gardening.” Now he’s back, as a contractor at Citi.

Osborn declined to comment on the details of his role at Citi, but his LinkedIn profile suggests he’s positioning himself as a specialist in market structure with an emphasis on multilateral trading facilities and MiFID II. Earlier this month, the Financial Times reported that MiFID II-related roles in London were soaring, with 1,300+ MiFID jobs on offer in October alone. Rates typically start at £350 a day, but can easily be double that, or more.

Richard Burgess-Kelly, a recruiter who works with MiFID contractors, says hundreds of new MiFID-related jobs are being posted every week and that contract roles will likely remain available throughout 2018 as banks and asset managers integrate the new regulations.

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Photo credit: Lucio Bracamontes, Bronx, New York by Jorge Quinteros is licensed under CC BY 2.0.

Vijay Sharma, the chief risk officer at $13bn hedge fund Capula Investment Management, has left the firm after more than eight years.

Sharma, who moved into risk on the buy-side after holding various senior front office jobs at both UBS and Deutsche Bank, retired earlier this month. He has been replaced by Michael Hieb, who was latterly chief risk officer at $3.6bn investment manager Symmetry Investments.

A Capula spokesman confirmed his exit.

Sharma joined Capula in March 2009, as head of market risk, and was promoted to chief risk officer and partner in February 2015. Before this, he was a managing director within UBS’s macro and FX team, a role he took after senior roles in various hedge funds.

Capula has a history of hiring from large investment banks. Its founder, Yan Huo, was the former head of fixed income proprietary trading before starting the fund in 2005. It hired David Sabotka, the former head of fixed income currencies and commodities (FICC) trading at Bank of America Merrill Lynch, while Manu Tripathi, the former head of emerging markets FX options at Unicredit, joined late last year.

More recently, however, C-level executives have been leaving Capula. Steven Gregornik, a partner and its chief executive officer, left in September. David Gu, co-CIO and partner at Capula, left the hedge fund to join Adarga Limited in June, while co-head of investor relations, Thorkild Junker, left in July.

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As global banks cut costs in Hong Kong and Singapore, directors and managing directors are increasingly finding themselves displaced by cheaper and more junior team members. But while ex-MDs are busy starting their own businesses or finding new jobs on the buy-side, their young replacements are facing up to the stresses of extra responsibilities.

“The problem now in investment banking in Asia is that when a director or MD leaves it’s become very common for someone less senior in their team to take on their role even if they don’t really have enough technical and management expertise,” says Cynthia Siantar, an ex-HSBC ECM banker, now head of special projects at Goldbell Financial Services.

“Even if you don’t actually move up a job rank, you suddenly have all the responsibilities of a more experienced banker,” adds Siantar. “Your workload could be double what is was, so there’s big potential for junior investment bankers in Asia to burn out prematurely.”

The leaner IBD teams in Asia become, the more pressure is heaped on 20-something staff. “At HSBC, for example, the Southeast Asia ECM team was only me and a director. As an analyst I wasn’t just doing the typical paperwork and pitch books, I was doing associate-level work too – all the internal and external coordination on deals,” says Siantar.

Investment banking deal teams in Asia are already lean by Western standards. As we noted earlier this week, Goldman Sachs’ Hong Kong office typically deploys only four bankers on large-scale China deals. “As a result of small deal-team sizes and being the only analyst, I get to frequently meet clients and travel to mainland China, where most of them are based,” says a Hong Kong-based third-year Goldman analyst. “If you want an analyst job that just involves crunching numbers at your desk, Goldman in Hong Kong isn’t for you.”

A heavy workload isn’t the only problem for freshly promoted junior bankers in Asia. “If young people who take on new roles end up failing, it’s often because their people management skills let them down,” says an analyst in Hong Kong who’s recently moved to a more senior job at a major financial institution. “Your interpersonal skills are much more important than your technical ability – you can always learn the new knowledge on the job.”

“A lot of what drives the early success of young bankers was learnt from their studies,” adds James Incles, Singapore country director at recruiters iKas Group. “These newly promoted managers need to realise that what worked to get them promoted quickly up the ladder doesn’t necessarily work once they reach a more senior position. To continue to succeed they must manage internal relationships and gauge the politics within the bank. But these are leadership competencies that rely on the sort of experience that a young banker may not have.”

While many young bankers in Singapore and Hong Kong are – at least initially – relishing the opportunity to become managers, headhunters are now noticing an uptick in people burning out and wanting jobs with reduced workloads.

“We’re coming across more candidates citing ‘lack of work-life-balance’ as a reason for leaving – and some are leaving their banks without a job,” says Ivan Tang, a former Societe Generale banker, now managing partner at recruiters Tangspac Consulting in Singapore. “In more extreme cases, we’ve seen young directors who were promoted from VP grade getting dismissed within a year for not performing. The stakes are higher after a promotion.”

Siantar adds: “More young bankers in Asia these days are thinking ‘I’m not so tied to my five-figure salary; I need my life back’. More of them are slowly starting to believe that banking isn’t the only career option – the growth of the fintech sector in Asia has helped with this.”

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Goldman Sachs is a paradox. On one hand, it says it doesn’t like to hire wealthy, “entitled” graduates, but people who’ve risen out of adversity. On the other, it frequently seems to hire students from elite schools whose parents have often seemingly paid for them to study overseas.

Lloyd Blankfein, current CEO and son of a mail sorter and a receptionist, is an example of the former. So too is Erkin Adlov, a former sheep farmer who joined Goldman Sachs before setting up Behavox, a company which monitors traders’ communications using artificial intelligence. So too, it seems, is Goldman COO Harvey Schwartz.

In a long article on the race taking place to succeed Lloyd Blankfein, the New York Times paints Schwartz as one of Goldman’s strivers. He’s shy. His mother died of cancer when he was 14. He only went to university because of a woman he met in the gym. He used to be a nightclub bouncer, and a landscaper, and a knife sharpener. He’s seen as a “good shepherd internally” who watches out for the firm’s risk exposure and clients’ interests, as exemplified by a time he printed “elaborate presentation booklets” and lugged them onto a plane himself for fear they’d get lost.

By comparison, Schwartz’s co-COO David Solomon, used to be a frat boy. He grew up in suburban Hartsdale, N.Y., and while Schwartz went to Rutgers, where the median family income certainly isn’t low at over $100k, Solomon went to Hamilton College, where the median family income is $200k and the students have a reputation for being “rich and preppy.” Solomon is a DJ. He has a house on the Upper West Side where he throws parties for his, “varied social network,” which includes people his wife met walking the dog in Central Park. He’s charismatic and he isn’t slow to relate anecdotes which portray him in a good light (like the time he and his colleagues wore Lululemon clothes to the company’s IPO and disconcerted their rival bankers in suits.)

All of this matters, because Solomon and Schwartz are battling it out for the soul of Goldman Sachs. When Lloyd Blankfein vacates the post, one of them will be CEO. As a striver himself, there’s a suspicion that Blankfein favours Schwartz. During a recent investor call, Blankfein handed the line to Schwartz, who was at a loss for anything valuable to say after previously being told he wouldn’t have to speak. There are also questions over who leaked the details of Solomon’s DJ career on the side.

In a few years, one of the two men will be CEO. Goldman could end up a very different place depending upon the outcome. While working at Goldman for a long period will make you personally wealthy, there’s still a distinction between those whose families had wealth when they arrived and those who didn’t.

Separately, why give up your trading career for €22k? This is what Paul Walker, an experienced bond trader at Bank of America did. After being caught “algo baiting,” Walker was sacked by BofA and has now been fined £60k by the UK’s Financial Conduct Authority. You can read the details of his misdemeanours in the FCA’s judgement here. Had the baiting worked out and continued for sometime, Walker would potentially have made more money. As things stand, he made almost nothing and destroyed his career in the process.

Meanwhile:

The British government will be selling its stake in RBS (and returning RBS employees to the private sector) by March 2019, despite sitting on a loss of £20bn. (Financial Times)

Banks might not save London jobs using “back to back” trades and “non solicitation” after Brexit because they’d fear EU regulatory intervention and retribution if the approach was challenged. (Financial Times)

J.P. Morgan might help its clients to trade Bitcoin, even though Jamie Dimon thinks it’s a fraud. (Independent)

Citi has an in-house venture capital firm called D10X. (American Banker)

Gary Cohn faked a bad connection to get Donald Trump off the phone. (Dealbreaker)

Oxford graduate continues to sue the university for £1m after failing to achieve a first class degree 17 years ago. (RT News)

Keeping it classy pic.twitter.com/so1821a6gc

— The CDS Trader (@thecdstrader) November 22, 2017

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Photo credit: Fight! by Gianfranco Blanco is licensed under CC BY 2.0.

2017 is the year for senior investment banking employees to quit big firms, go it alone and then offer their experience back to the types of institutions they’ve just fled. The latest managing directors to leave banking to go it alone come from UBS.

Richard Longmore, a managing director and co-head of foreign exchange, rates and credit (FRC) distribution at UBS for both Europe and the U.S., has departed to launch Finoesis, a new firm that offers advice to sell-side and buy-side firms on how to handle the shifting landscape in fixed income currencies and commodities (FICC).

Longmore is joined by Sandeep Varma, who for the past two years has been head of client strategy for FX, rates and credit within EMEA at UBS.

Longmore joined UBS in July 2010, as a managing director and head of European FX sales, from Barclays Capital, where he was also an MD. Both men worked together at both Barclays – Varma was a COO within Barclays’ investment bank between 2006 and 2010 before moving to Credit Suisse.

Finoesis describes itself as a consultant focused on the fixed income landscape, which is undergoing “rapid change”. “The contraction of liquidity and developments in technology are leading to the emergence of new business approaches and new market players,” they wrote on their website. “We believe there are untapped opportunities for industry participants to grow revenues and/or become more efficient.”

It’s also another example of senior banking professionals quitting large institutions to launch consultancies focused on the financial sector. A trio of Credit Suisse COOs, including its head of Brexit strategy David Long, left to start a consultancy called Pall Mall Risk Reduction, while Jefferies’ former head of international equities at Jefferies, Andrew Shortland, departed to launch his own consulting firm.

Meanwhile, former UBS investment bankers are also reinventing themselves. Juan Luis Bellon, a managing director focused on investment banking deals from family offices and billionaire wealth management clients at UBS, and Juan Rodriguez Andrade, the former head of equity-linked transactions at the bank, became fintech angel investors. Andrade has since become COO of data analytics firm Provenance Technologies.

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Well, it was sort of fun while it lasted. After nineteen months at the helm of HSBC’s global banking group, the thrusting ex-Goldman Sachs banker Matthew Westerman is unexpectedly leaving HSBC. Before bonuses are paid to boot.

The immediate reason for Westerman’s exit isn’t clear. It might have something to do with the fact that he wasn’t chosen to be CEO. It might also have something to do with the fact that Westerman’s way of doing things didn’t fit well with HSBC’s.

Before joining HSBC, Westerman spent nearly 16 years at Goldman Sachs, where he traveled the world as global head of equity capital markets, head of the investment banking division in APAC, and chairman of investment banking for Europe. When he joined HSBC, Westerman had a mandate to shake things up. And shake things up he did.

First came the firings. Eight months after arriving, in January 2017, Westerman setting about clearing out some of HSBC’s cadre of long-serving investment bankers, 100 of whom went in January 2017. Exits have continued throughout the year, including, recently, Luis Galeano, the former head of HSBC’s consumer group for the Americas.

While there have been exits, however, there has also been a lot of hiring. Under Westerman, HSBC has brought on an impressive roster of senior investment bankers. They included: Ray Doody, as global head of leveraged and acquisition finance, who joined from J.P. Morgan in January; Alexis Maskell as global head of financial sponsors, who joined from Deutsche, also in January; Paul Cahalan, as head of EMEA leveraged and acquisition finance,who joined from Deutsche Bank in July; Chito Jeyarajah, as co-head of ECM for Asia Pac, who joined from GS, also in July; Rob Ritchie, as co-head of global banking in the UK, who joined from GS in July too; Martin Zoll, who joined from Goldman Sachs in August as global co-head of strategic equity and financing; and Nick Bevan, who joined from Deutsche in October as global co-head of strategic equity.

These are Westerman’s men. And they will not have come cheaply. Eight hires at that level (plus various underlings) will easily have cost HSBC £10m, and more when you consider that their previous bonuses will have been bought out. While all will have been on guaranteed packages for this year, they now face an uncertain future when it comes to their compensation in 2018 and beyond.

Nineteen months isn’t much time in which to make a difference, but hiring aside, Westerman does seem to have had some impact at HSBC. Insiders point to the fact that the bank has had three joint global coordinator (JGC) roles on UK IPOs this year including the planned IPO of TMF Group, which subsequently became a sale to CVC Capital Partners, and the floats of Arqivar and Bakkavor (although these were subsequently pulled). HSBC was also the lead advisor to ChemChina on its $43bn recommended offer Syngenta AG, and the joint global coordinator of Wind Tre S.p.A’s €10.7bn financing round. Insiders say Westerman’s presence helped win these deals.

While Westerman had his achievements, however, he also came with aggravations. HSBC’s cosy cabal of long-serving bankers was shaken up by Westerman’s more “robust” approach. He introduced a system for monitoring what his bankers were up to. He allocated the HSBC bonus pool far more unequally, with top performers getting a higher proportion than usual. And he dumped all those he didn’t like.

None of this is likely to have enamoured him to HSBC’s existing bankers, and it’s therefore telling that Westerman is effectively being replaced by his predecessor, Robin Phillips, who knows how HSBC works after joining from Citi in 2004. The boat that was rocked will now be stablilized.

Even so, headhunters who know Westerman and who’ve consoled his rejects, say it’s unfair to presume that he’s a ‘difficult character.’ “He has a very clear idea of what he wants to do, and he does it,” says one. “- You’ll always upset some people when you have that approach, especially at a bank like HSBC.” Another says that negative opinions about Westerman’s management style should not be taken at face value. – “You will always find people who say that these high-achieving bankers are difficult to work with,” says the head of an investment banking search boutique. “Westerman is a tough task master, but he’s no worse than a huge number of other very senior bankers. If you’re good yourself, you’ll say he’s a great manager. If you’re not, you’ll complain – but this is as likely down to your own shortcomings as to anything else.”

This is confirmed by senior bankers who worked with Westerman at HSBC. “Those of us who came from bulge bracket banks are used to his style,” says one. “But he certainly ruffled a few feathers. Even so, his exit is a big surprise.”

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Photo credit: hsbc by Nick Garrod is licensed under CC BY 2.0.

If you make it to managing director in investment banking, the pressure really starts. Not only are your revenue targets much higher, but you have to navigate an increasingly political environment and lead team of highly ambitious individuals who would love to be in your job. And, if juniorisation of the ranks continues, MDs are likely to be increasingly younger.

It takes a certain kind of person to get, and remain, in the senior ranks over the long-term. According to current and former senior investment bankers, these are the habits and traits you need to adapt to succeed in the industry over the long term.

1. Successful investment bankers are adaptable

Part of ensuring your long-term survival in investment banking is knowing what sort of personalities large financial institutions look for at different phases of your career, says Graham Ward, the former head of equities at Goldman Sachs and now adjunct professor of leadership at INSEAD.

“At inception you need to fit in and be a team player, with a strong willingness to learn from all the big egos around you,” he says. “Next you need to demonstrate a sharp commercial acumen and an innovators’ mindset. Create something unique. Finally, no successful investment banker, even in trading, was ultimately successful if they do not have an eye on the needs of clients. Once you make clients your friends you become less dispensable.”

2. You must be dogged and persistent

It’s not enough to be smart, you must back this up with clear focus and determination on bringing in new business. Most pitches for new business, despite the huge amount of work required, are destined for failure. You need to be prepared for this.

“What I lack in brains, I make up in energy,” Diego De Giorgi, the global of investment banking at Bank of America Merrill Lynch has said previously. “You need to be energetic, enthusiastic, persistent and dogged. Most pitches won’t be successful and you could have spent hours working on a presentation, but so will have the competition. We don’t sell a physical product, we sell what we can do for clients and you need to show intellect, but also doggedness.”

3. You must always be more informed than the competition

As cheesy as it sounds, investment bankers must always be thinking about how they can add value during any interactions with clients. This means staying informed to the point that you have more knowledge than the supposed experts, says Ziad Awad, a former Goldman Sachs and Bank of America Merrill Lynch managing director who now boutique bank Awad Capital.

“You need to read up on everything connected to your coverage area and your clients. I can’t tell you how many first meetings I’ve had with company CEOs and chairmen where I’ve told them something they don’t know about their company or sector,” he says. “It’s a matter of extreme discipline – read through all the company reports, news and letters to shareholders you can find. Read between the lines, make assessments and learn any way you can. Have the confidence to ask questions on issues you don’t understand to improve your knowledge.”

4. Senior investment bankers must know how to delegate

As you progress up the ranks, you must always prove that you’re better at most task than those below you. As you gain more experience, it stands to reason that you should be more skilled than junior members of the team. The challenge as you move up, says Gregg Lemkau, co-head of the investment banking division Goldman Sachs, is learning when to let go and delegate.

“Investment banking is also an apprenticeship business, and you need to strike the right balance between doing and teaching those that work with you how to do it,” he said. “You have to do both so that they can learn the business and provide you leverage to be able to be out serving your clients. Striking this balance as to how “hands-on” to be is a continual challenge throughout one’s career.”

5. You need to take career risks

Investment banking career paths are not always linear. They are not based in one location and they rarely stay in one sector. Take the opportunities as they arise, says Ward.

“Sometimes as in war, your masterplan is ripped up on first contact. If opportunity knocks it rarely does so twice,” he says. “The flexible and open-minded tend to be long-term winners. If you are offered a promotion but it is in Tokyo for two years, take it. The worst thing that will happen is you will learn something about yourself.”

6. You must have an outlet from work

The hours are, of course, long in investment banking – 70-hours a week and you’re not even ‘in the game‘. What little time off you have should be used wisely.

This is not always obvious chill out time. “I know a lot of bankers who do competitive cycling or run ultra-marathons,” says Awad. “I sail competitively and admit that I bring my competitive attitude to work to my hobby. But you need something to stop the demotivation or burnout when you’re putting in the hours or getting up at 4am to catch an early flight for another business trip. Male bankers become obsessed with fitness when they hit 40.”

7. Successful investment bankers are relentless

Every new year, you start from zero. Never assume you’ve made it, and never rest on your laurels.

“In town hall meetings, I keep bringing up the analogy of the Wimbledon championship,” said Vis Raghavan, EMEA CEO at J.P. Morgan. “The day after winning the tournament, what makes the champion get back on the treadmill and start the whole process again? You might have won the final in five sets, but winning it 6-0, 6-0, 6-0 makes you the champion beyond doubt. In short, there is always room for improvement.”

8. Successful investment bankers are consistent

Once you make it to managing director, the pressure increases. You’ve not made it to the summit of a mountain, you’ve poked your head above the parapet and must be prepared for greater scrutiny than ever.

“Managing directors in investment banking last around 18 months,” Randall Dillard, the former head of investment banking at Nomura said. “Most people simply cannot handle the amounts of revenue they are expected to generate year after year.”

9. Successful investment bankers mix work with pleasure

Senior bankers are under more scrutiny about which elements of client interaction can strictly be categorised as work. Client relationships need to run deep, says Awad, and any investment banker who focuses on a single deal over long-term relationships with clients will not succeed. The key is not to be overly wedded to the idea of free weekends.

“You need a passion for your clients,” he says. “Top investment bankers socialise at weekends with clients, they go to sporting events and they hang out with clients’ families. This is something I’ve experienced on a regular basis.”

10. Successful investment bankers will be ruthless

If you want to be one of the people who climbs up the career ladder, you have to accept that there will be many who will fall by the wayside and need to focus on your own goals, says Ward.

“You need to be brutally disciplined, current, and develop a thick skin,” he says. “It is a competitive marathon and you pass a lot of corpses along the way. So having your eye on the horizon and having a strategic gameplan is essential.”

11. Successful investment bankers will be detached

Clients will be demanding, managers will be unreasonable and job security will be shaky. Throughout your career, you must not get emotionally involved. An extensive study into investment banking careers by Maxine Robertson at Queen Mary University in London and Mats Alvesson from Lund University, Sweden published in 2015 suggested that emotions and investment banking don’t mix. Most of the interviewees for the study were never “upset, happy, humiliated, perturbed” even during tough times.

‘Lee’, a senior investment banker interviewed during the study, said that he tries to avoid his boss’ ‘dark side’: “I don’t care, what can I do? And he’s unpredictable when he explodes. It doesn’t faze me. I am kind of used to it now and it just washes over me. I’ve developed a lot thicker skin and that comes in part from dealing with clients. I just see it as my job and don’t take anything personally.”

12. Successful investment bankers will always be impeccably dressed

This sounds trite, but the one thing in Robertson’s study investment bankers did care about was that they wore the right (expensive) clothing and knew how to dress at all times. Senior investment bankers even make hiring decisions based on this. ‘Charlotte’, a senior investment banker interviewed for the research, said she turned down one junior for being scruffy.

“He had quite a lot of internships and really good experience, but now I know why he hasn’t got a permanent job. He kind of slobs around on the trading floor, he is one of those guys that can make a really expensive, sharp, nice suit looks scruffy and old. It’s all part of the wrap, it’s the kind of veneer we deal with in this business,” she said.

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Meanwhile:

Deutsche Bank’s asset management arm has nearly secured a new office for 1,400 employees in Frankfurt (Bloomberg)

Squeaky bum time – you have one week left to prepare for MiFID II (Financial News)

Sanctuary for research analysts – China (Bloomberg)

TCI wants regulators to investigate Xavier Rolet’s exit from the LSE (Financial Times)

The increase Brexit workload has prompted the European Central Bank to hire 170 more staff (Bloomberg)

“We’re confident that men and women are paid equally for doing the same job at the Bank; however, the greater proportion of men than women in senior roles creates a gender pay gap.” (Financial News)

“Self-love, loving-kindness, and awareness of mortality” = the solution to dinner with your in-laws. (Wired)

A Holidays survival guide (Quartzy)

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If you want to leave banking for private equity, you usually need to go young. Our research suggests that most people make the move within 24 to 36 months of starting in banking. Some move even earlier – take Nik Okri, the former Goldman leveraged finance analyst who joined Summit Partners after only a year at GS. Others, however, only move to PE when their finance careers are ‘mature.’

If you’re an investment banker looking to make a late move into private equity, you might want to look up HarbourVest Partners, a Boston-based private equity fund with global offices, including in London, Toronto, Hong Kong. In October, HarbourVest hired in Simon Jennings, the former global head of private equity at HSBC. With 30 years’ experience in finance, Jennings is the diametric opposite of the young banker leaping to PE, and he’s not HarbourVest’s only more established hire.

This month, HarbourVest also recruited Gonçalo Faria Ferreira from Goldman Sachs. A former Goldman executive director, Faria Ferreira spent five years in banking before joining HarbourVest as an associate in its London office.

Earlier this year, HarbourVest hired Jan De Wolff, a former TMT M&A banker from Houlihan Lokey. De Wolff spent two years’ at Houlihan, a year at Ondra Partners, a year at Greenhill and three years in strategy consulting at Booz & Co. Last year, it hired in Gokhan Kara, another banker who’d spent six and a half years at GS.

HarbourVest isn’t new to London – it was first incorporated in the UK in 1990. Nor is it exactly expanding: the UK’s Financial Conduct Authority Register suggests it has 26 registered people in London, down from a peak of 28 in March 2017. But it is hiring and when it hires, it’s clearly partial to bankers with some experience.

It’s not alone. In October, mid-market PE firm Inflexion hired in Simon Tilley, a former managing director at DC Partners. Tilley joined as a partner, which is almost unheard of. It undoubtedly helped that he was head of financial sponsors at DC and undoubtedly new the fund already.

Charlie Hunt, principal consultant at search firm Private Equity Recruitment, says this is the often the easiest way to move into private equity when you’ve been in banking for a while. “Senior bankers often know people in the funds they’re moving to,” says Hunt. “Private equity funds are very conservative – they either like to hire a junior and train them up, or to hire someone senior who they know already.”

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Photo credit: Salt and Pepper Shakers by Joe King is licensed under CC BY 2.0.

Investment banks are just wrapping up their 2018 graduate recruitment programmes, but private equity firms rarely follow a strict schedule when it comes to hiring juniors. Buy-side firms without grad schemes target junior bankers months into their sell-side career, and bring them on board whenever they have a need to extra resources.

As a result, junior bankers have been landing at PE firms in the past few months, at a time when most firms are locking down on new hires and budgeting for the year ahead. These are the private equity firms in London hiring in juniors now.

SoftBank’s Vision Fund

Softbank’s Vision Fund is a tech-focused venture capital vehicle focused on technology investments, which, at $93bn, dwarfs any of its peers. Deutsche Bank’s former head of credit trading, Rajeev Misra, is at the helm and has recruited some former investment banking heavy hitters into its investment team. More recently, it’s been recruiting juniors from investment banks. As we reported last week, Paul Davison, an associate at Rothschild, joined in October. This follows Louis Cho, who came from J.P. Morgan in the summer.

Cerberus Capital Management

Again, Cerberus has been making some hires at the top of the tree – most notably, J.P. Morgan’s AI guru Afsheen Afshar, who joined earlier this month as a senior managing director and chief artificial intelligence officer.

But it’s also been poaching from banks for its junior ranks. In a rare hire for its London office, Robert Hansen, who spent two years within Goldman Sachs’ financial institutions group M&A team, joined in October. He has an MSc in Finance from Imperial College London.

Summit Partners

Summit is a PE firm established in 1984, which focuses on technology, healthcare and “growth products”. It also, this year at least, has a predilection for hiring juniors from Goldman Sachs. Nik Ohri, who worked in Goldman’s leveraged finance team for only a year before jumping to Summit earlier this month, is the latest recruit. It also brought in Matt Heims, a former Goldman consumer banking analyst, in May.

Westbrook Partners

The real estate focused private equity firm, Westbrook Partners, doesn’t hire many people in London, but it’s just tapped J.P. Morgan for its latest recruit. Vibhav Sajjan, the former president of Imperial College’s investment society who spent just over a year within J.P. Morgan’s real estate finance division, joined as an analyst earlier this month.

Metric Capital Partners

Metric Capital Partners targets investments in small to medium sized companies in Europe. This year it has been targeting both boutique investment banks and bigger players. Tijana Copic, a former investment banking associate at Greenhill & Co who spent over four years at the bank in London, joined as an investment associate earlier this month. She follows Miro Angelov, a former industrials and TMT analyst at Goldman Sachs, who joined Metric’s special situations fund as an associate in May.

It also hired Erwin Molenaar, a former managing director at Barclays investment bank and senior advisor at Richmond Park Partners, who joined its investment team in July.

Rede Partners

Rede Partners is not a private equity fund, but instead advises buy-side firms on fundraisings. Nonetheless, it’s been poaching from investment banks. Ed Saunders, a debt capital markets analyst at Barclays for the past two years, joined as an analyst earlier this month.

CapVest Partners

This mid-market private equity firm has also been hiring from boutiques. It brought in Vishal Luhana, an analyst at Houlihan Lokey, into its investment team focused on consumer, healthcare and business services.

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