The global head of equity derivatives has officially left Credit Suisse

March 27, 2017, 2:47 am

≫ Next: Goldman Sachs salesman escapes for a hedge fund, returns eight months later

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Anthony Pesco wasn’t one of the recipients of Credit Suisse’s generous retention bonuses. After 18 years with the Swiss bank in NYC, he’s officially left the bank

Pesco was Credit Suisse’s global head of equity derivatives, convertibles and funding products. He joined the bank in 1999, when it was still known as Credit Suisse First Boston and around the time it acquired DLJ. A Columbia engineering graduate, Pesco previously worked for J.P. Morgan, Santander and AIG. Pesco quit CS in October last year to pursue other interests, but his exit only became official this month after a notice period.

Pesco reported to Eraj Shirvani, Credit Suisse’s global head of solutions and fixed income in EMEA. There hasn’t been a direct replacement. Credit Suisse’s equities business could benefit from strong leadership. Equities sales and trading at the bank lost market share last year according to KBW. And in last week’s annual report, Credit Suisse bank blamed falling equity derivatives revenues for part of the businesses’s problems.

Pesco isn’t the first equities man to go at Credit Suisse. In January, the bank lost Stephen Dainton, former co-head of its markets business in EMEA. As we reported in February, Credit Suisse has been shaking up its EMEA equities business and hiring in UBS people instead.

Source: KBW

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Photo credit: Credit Suisse by N0fX is licensed under CC BY 2.0.

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Goldman Sachs salesman escapes for a hedge fund, returns eight months later

March 27, 2017, 3:29 am

≫ Next: The nature of trading jobs at Deutsche vs. trading jobs at Credit Suisse

≪ Previous: The global head of equity derivatives has officially left Credit Suisse

Escaping the trading floor of a large investment bank for a job at a hot new hedge fund is the dream for many on the sell-side, but it’s not always a permanent move.

Rodrigo Albero, who was head of equity sales for Iberia at Goldman Sachs in London, left last year for hedge fund Ronit Capital. There he was head of business development and investor relations, but eight months later he’s back at Goldman Sachs. Albero is now an executive director in Goldman Sachs’ securities division and re-joined the bank in London earlier this month.

Ronit Capital is an emerging markets focused hedge fund set up in 2013 by Edward Misrahi, a former Goldman Sachs partner who latterly worked as a partner at hedge fund Eton Park Asset Management. At the time of its launch, there was a big buzz around Ronit Capital, which planned to hire around 12 staff and raise $300m in assets under management, according to reports.

The latest accounts posted on Companies House in December – for the 12 months to 31 March 2016 – show that Ronit Capital LLP posted a £16k loss on revenues of £1.7m, which is up from being £440.7k in the red for the same period in 2015. It had five partners during that period and eight staff in other positions, which it paid £657k, or an average of £82.1k.

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The nature of trading jobs at Deutsche vs. trading jobs at Credit Suisse

March 27, 2017, 4:52 am

≫ Next: The semi-official Goldman Sachs resumé template

≪ Previous: Goldman Sachs salesman escapes for a hedge fund, returns eight months later

Credit Suisse’s sales and trading business is run by a former accountant. Deutsche Bank’s is not. We’d suggest you can see the difference in the charts below, taken from the banks’ recently published annual reports.

Deutsche Bank made money on 87% of trading days last year. As the chart below shows, the German bank generally made a profit, but when it made a loss, that loss was sometimes big. There were around six days when Deutsche Bank lost more than €50m last year. At Credit Suisse there were none.

Compared to Deutsche’s, Credit Suisse’s sales and trading business looks very nice and sensible. The Swiss bank’s traders made money on 99% of days last year. They never lost more than CHF25m (€23.4). They never shook the tree only to find something unexpected fell upon their heads. Admirable, except…

…Credit Suisse’s trading business looks a bit boring. When profitable days at the two banks are compared in the final chart below, it becomes apparent that while Credit Suisse’s traders didn’t make much of a loss on many days last year, they didn’t make much of a profit either. Despite a few outliers, Credit Suisse’s trading business specializes in making daily profits of between CHF0-25m and CHF0-50m. Deutsche Bank’s traders are much more likely to make profits in excess of €50m (CHF53m) and €100m (CHF107m).

The implication is that if you want a trading job where you play it safe, join Credit Suisse. If you want a trading job where you don’t, join Deutsche Bank.

This makes sense. Brian Chin, head of the global markets business at Credit Suisse, studied accounting and started his career at PWC. Unlike previous heads of the markets business (eg. Gael De Boissard), Chin isn’t a trader by profession.

By comparison. Deutsche’s global markets business is run by Garth Ritchie, a man steeped in derivatives trading. As such, Ritchie is far more likely to understand that in order to make a big profit, you sometimes have to risk a biggish loss.

Some Credit Suisse insiders say Chin shouldn’t be dismissed so quickly. “He’s a trader’s trader,” says one. “- It’s just his leash is extremely short.”

Distribution of daily trading income at Deutsche Bank in 2016

Source: Deutsche Bank

Distribution of daily trading income at Credit Suisse in 2016

Actual daily trading revenues

Source: Credit Suisse

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The semi-official Goldman Sachs resumé template

March 27, 2017, 8:10 am

≫ Next: Senior bond trader leaves BNP Paribas as cuts take hold

≪ Previous: The nature of trading jobs at Deutsche vs. trading jobs at Credit Suisse

If you’re trying to put together a CV or resumé with an eye to getting a job at Goldman Sachs, you might be wondering what to include. Clearly you need to include your educational attainments. Clearly you need to include your work history. But do you really need to include some kind of opening summary? And how should you describe what you’ve been up to?

Fortunately, Goldman Sachs has offered a few pointers. The firm’s recruiters don’t provide an official Goldman Sachs resumé template, but the bank’s recent annual report offers the closest thing to it.

In its annual report, Goldman introduces its board of directors and outlines the key achievements of its senior executives. In the process, it provides an effective template for anyone looking to put together an introductory statement or to explain what they’ve achieved in their recent role.

The Goldman Sachs guide to writing an introductory statement:

Of all the elements of a CV, the introductory statement is the most challenging. Done badly, it can be awful. Done well, it can provide an appealing entry point to anyone at Goldman (or elsewhere) who’s thinking of hiring you. Even so, recruiters and banking resumé writing professionals tend to wince at the thought of the intro paragraph. All too often it’s loaded with vague clichés about how “dynamic” and “innovative” people are. “Please don’t say you’re self-motivated or dynamic or a self-starter in one of those personality profiles,” Tom Stoddart at London recruitment firm Eximius implored last month.

This is how Goldman introduces Lloyd Blankfein, its chairman and CEO in its corporate governance report. Note, there’s no waffle about Blankfein’s personality or his “team ethos” – just three clean bullet points summarizing and expanding upon what he brings to the role:

Goldman SAchs CV1

Source: Goldman Sachs Annual Report 2016

Goldman does something similar for David Viniar, its former CFO and a key member of its risk committee. Again, it’s three bullet points explaining and then expounding upon what makes Viniar special:

Goldman Sachs CV

Source: Goldman Sachs Annual Report 2016

The Goldman Sachs guide to summarizing your achievements:

Once you’ve laid out your shop in the introductory statement, you don’t want to drop in vagaries about the work you’ve done. You need to add precise and preferably quantifiable achievements.

When you’re talking about these, CV specialists advocate using bullet points that detail what you personally achieved. Preferably, you need to add some data that quantifies the impact you had.

Goldman exemplifies this approach in the compensation section of its annual report. This is where it outlines why its most senior people deserve to get paid (or not).

For example, this is what Goldman says about Lloyd Blankfein’s achievements over the past year:

Goldman Sachs CV

Source: Goldman Sachs Annual Report 2016

And this is what Goldman has to say about the performance of Harvey Schwartz, its current CFO and soon to be COO.

Goldman Sachs CV 6

Source: Goldman Sachs Annual Report 2016

These excerpts don’t come from Goldman’s recruiters and they don’t constitute part of the firm’s official advice on how to assemble your resumé. Even so, they’re informative. They’re how Goldman Sachs itself introduces its senior staff and how Goldman itself summarizes what they’ve achieved in their jobs. If you’re looking for advice on assembling your own resumé in application for a job at the firm, this is probably as close as you’ll get to a template from Goldman’s inner sanctum.

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Senior bond trader leaves BNP Paribas as cuts take hold

March 27, 2017, 9:13 am

≫ Next: “I launched a private equity firm when I was only 26. Here’s how I did it”

≪ Previous: The semi-official Goldman Sachs resumé template

BNP Paribas promised to scale down its investment bank in the UK last week, and now senior markets staff in London have started to depart.

Most significantly, we understand that Michael Wheeler, BNP Paribas’ head of high yield trading, has left the bank. Wheeler joined in October 2015 from Morgan Stanley, filling the role left vacant by Peter Kaufman, who previously headed up the French bank’s high yield desk.

Another exit in the same team is Matthew Robbins, a high yield sector specialist analyst who joined the bank in 2014 and focused on a range of sectors including construction, industrials, shipping, metals and retail. He previously held roles at UBS, RBS and hedge fund Caxton Associates.

BNP Paribas said in its annual report last week that it would continue to cut jobs in its UK investment bank – as well as France and Luxembourg – by the end of 2018. It will, however, be hiring in lower cost countries like Poland, Spain and Portugal, it said. This follows an announcement in May last year that it was planning on cutting 233 jobs in its UK corporate and investment banking unit.

In 2016, it spent €495m on redundancy costs in 2016, up from €342m in 2015. It has 7,500 people in its UK operation.

BNP Paribas didn’t immediately respond to requests for comment.

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“I launched a private equity firm when I was only 26. Here’s how I did it”

March 27, 2017, 10:26 am

≫ Next: Morning Coffee: European bank luring 26 year-olds with an extra $125k. Where AI will never work

≪ Previous: Senior bond trader leaves BNP Paribas as cuts take hold

While the average 26-year-old investment banker may have aspirations to join a private equity firm as a junior, Gina Heng had other ideas: she founded her own.

The Singaporean’s rapid rise from employee to entrepreneur began when she took an analyst role at asset management consultancy Cerulli Associates in 2005.

“Unlike most juniors, I wasn’t just looking at specialist products or trading in silos – I saw the holistic business side of asset management. This helped later in my own businesses because I already understood the strategy behind running a buy-side firm,” explains Heng.

“At Cerulli I was researching the asset management sector in Asia and had a bird’s eye view on product development and distribution trends,” she adds. “I talked to very senior people – including CFOs and regulators – and worked across industries, so I got a fundamental grounding in the real economy.”

In 2009 Heng crossed to the sell-side and joined the Singapore office of Bank of Tokyo-Mitsubishi UFJ as a research analyst, focused on telecoms, commodities and property. But a year there was enough to convince her that her future didn’t lie at a big bank.

Heng launched Leonie Hill Capital, a Singapore-based private equity firm with a market-natural strategy, alongside husband Joe Seunghyun Cho in April 2010.

“I was scared at first to give up the safety net of my banking job. But I think many women in Asia are too focused on short-term financial security and don’t have the confidence to believe that their new business will make money in the future,” says Heng.

“I was only 26 and it was difficult starting out, so I decided to treat it as a business that just happened to be in finance,” she adds. “Officially I was head of research, but I had to multi task – I was doing everything from marketing to compliance. Joe had a technical quant background and regional markets experience, so that helped.”

By 2013, Heng had cut her entrepreneurial teeth. She, Cho and partner Joel Ko Hyun Sik set up another private equity firm, One Asia Investment Partners. “We wanted to widen our investment scope – in particular, to fund start-ups. And my own role changed to become more focused on people management.”

Twenty-somethings who want to become entrepreneurs in the finance sector often take too many shortcuts to building a business, says Heng. “When you’re young it’s tempting to jump straight in. But you need to build a knowledge base first by working in the industry and by talking to a lot of people.”

“Building a business in the investment space is not just about coming up with the best product – you need to understand whether the market is ready for such a product and you need to educate the market about it,” she says.

Creating a new investment business also means learning about cost management, regulations, people management, and investing in different stages of businesses, adds Heng.

Heng, Cho, Ko have since moved from One Asia to found another investment firm, Marvelstone Group. “We focus on financial services – of which fintech is a growing area – and we also invest in other sectors, like tech, media and hospitality.”

Marvelstone is the investor behind the LATTICE80 office in central Singapore, one of the world’s largest fintech hubs.

It opened in November last year and already houses several start-ups. “We’ve invested in generic co-working spaces before, but this is about building a specific eco-system of fintech people who want to learn from and collaborate with each other. We think it will help start-ups really understand their markets.”

Heng bases her own fintech firm – Miss Kaya, a Marvelstone-backed money manager aimed at Asian women – at LATTICE80.

“People ask: ‘why launch a robo advisor that only targets women?’. And I reply it’s because there’s a clear need,” she explains. “Many women in Asia don’t do a lot of investing, aside from their public pensions. They generally have a conservative outlook regarding money and prioritise taking care of their families.”

Miss Kaya is hiring this year, for roles such as marketing, programming and content.

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Morning Coffee: European bank luring 26 year-olds with an extra $125k. Where AI will never work

March 27, 2017, 3:59 pm

≫ Next: The 10 companies financial services professionals are desperate to work for

≪ Previous: “I launched a private equity firm when I was only 26. Here’s how I did it”

If you’re a European bank trying to get ahead in 2017, North America looks like the promised land. As Dealogic’s recent review of capital markets activity in the first quarter explained, the U.S. is the only place where investment banking fees have been growing. Whether the Trump stimulus happens or not, the U.S. market is untrammeled by Brexit and with U.S. rates rising, the American market offers another year of opportunities to make money in fixed income sales and trading.

European banks are rising to the occasion. Or at least some are. Deutsche Bank and Barclays are trying to seize the day.

The Financial Times reports that Deutsche is so keen to hire juniors on Wall Street that it’s offering an extra $125k just to get them through the door. – Juniors on $200k can jump to Deutsche for $325k. The German bank also wants to hire 16 directors and managing directors into its U.S. business this year and has been dispatching CEO John Cryan to make monthly pep talks to U.S. employees.

Not to be outdone, Barclays is reportedly activating CEO Jes Staley to win over U.S. clients. Business Insider says Staley will call the British bank’s U.S. clients at two hours’ notice on a Sunday afternoon. Barclays has already made 24 “big hires” in U.S. investment banking in the past two years and is now “completely set up” according to John Miller, its head of corporate and investment banking in the Americas. Miller says America is a “must-win” market for Barclays, which has got a plan for ranking in the top five in every product and industry group.

Of course, it’s not all win-win and high pay. Most European banks are struggling to make decent returns on Wall Street and Deutsche and Barclays have had to ditch some ballast in order to float. Both banks have jettisoned clients who don’t tick profitability boxes. Deutsche has also parted company with senior bankers in the U.S. like Jeff Urwin and Bill Woodley. If the German bank is paying big money to attract juniors, it’s also worth bearing in mind that this is probably because Deutsche has recently developed a reputation for paying incredibly bad bonuses to the vast majority of its staff.

Separately, Bloomberg has spoken to someone who points out the unavoidable weakness of trading strategies based on artificial intelligence (AI). – Simply, what happens when there’s no relevant data? “While deep learning techniques can work very well using millions, if not billions, of data points in currency and commodity markets that are correlated with each other, it is challenging to build a good model using only a thousand data points of single-stock daily data,” says Hitoshi Harada, co-founder of Alpaca, a startup that sells deep learning trading platforms to banks. Harada cites stocks that have been listed for less than one year as an example. Human traders and analysts will always be needed somewhere.

Meanwhile:

Donald Trump owes Deutsche Bank $300m. If he doesn’t pay it back, Deutsche could seize his assets. Then again, it’s under investigation by the U.S. government for spiriting $10bn out of Russia. (Bloomberg)

Investment banks are quietly involved in something called “Project Scalpel” which aims to cut billions from operational costs by creating a joint venture. (WSJ)

London is still the world’s top financial city. European rivals Frankfurt and Dublin rank 23rd and 33rd respectively. (Bloomberg)

Bill Gross, billionaire, gets another $81m for his claim that Pimco ousted him unfairly. (Financial Times)

30 things I wish I knew when I was 20. (DariusForoux)

Cupboard inspections by an executive dietitian will cure your angst. (Bloomberg)

Girly with pony tail to inhibit bull for further 11 months. (NY Daily News)

Woody Sherwood, ping pong philanthropist. (Financial News)

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The 10 companies financial services professionals are desperate to work for

March 28, 2017, 1:15 am

≫ Next: HSBC has hired a top trader who left CQS in November

≪ Previous: Morning Coffee: European bank luring 26 year-olds with an extra $125k. Where AI will never work

J.P. Morgan has quietly become the investment bank that most finance professionals want to work for. It’s displaced Goldman Sachs from the top spot for the eFinancialCareers 2017 Ideal Employer rankings, which received over 17,600 votes from financial services professionals in the UK, U.S. and Asia.

If you want to work for J.P. Morgan, get to the back of the line. While Goldman Sachs has a 3% acceptance rate for the 250,000 graduates trying to get through the door, J.P. Morgan lets in 2% applicants into front office entry-level roles.

Meanwhile, for its investment banking internship programme – the most obvious route into a full-time role – applications have increased by 50% since 2015, the bank tells us.

Last year, Goldman Sachs was first in our rankings, but in 2017 J.P. Morgan moved to the top. Google, meanwhile, remains a fantasy employer for many financial services professionals (both within tech and other sectors) and finished third for the second year running.

In truth, despite the fact that Goldman Sachs generates more headlines than J.P. Morgan, the latter dominates the investment banking revenue tables.

Goldman Sachs topped the global M&A rankings with 10% of the wallet in 2016 – down from 12% in 2015 – but J.P. Morgan was first in the overall global investment banking revenues, according to Dealogic figures.

J.P. Morgan was also ranked first across fixed income currencies and commodities (FICC) in 2016, according to the latest figures from research firm Coalition (Goldman was second). It was also first in IBD (again, Goldman was second) and tied in second place with Goldman in equities (Morgan Stanley was top).

Investment banking pay versus working hours

Goldman Sachs may have handed out ‘donut’ bonuses for 20% of its investment banking division staff this year, but it’s reputation as a big-payer remains.

82% of people who voted for Goldman believe it offers a competitive salary, and 76% would expect a big bonus. This compares to 76% and 67% respectively for respondents who voted for J.P. Morgan.

Predictably, financial services professionals were most concerned about pay. 86% of respondents who voted for J.P. Morgan said a good salary was important to them, as did the same proportion of Goldman Sachs voters. Similarly, 76% of Goldman voters and 75% of those who chose J.P. Morgan expected a big bonus.

Like for like pay comparisons across both banks are difficult, largely because J.P. Morgan reports its compensation spend for the investment bank together with lower paid corporate bankers.

However, the latest figures for senior bankers in the UK – the so-called material risk takers (MRTs) – suggest that Goldman still pays more. Goldman paid its MRTs an average of $2.8m in 2015 (the latest figures available) compared to $1.1m at J.P. Morgan. However, 311 people at J.P. Morgan earned over €1m, compared to 286 at Goldman Sachs.

Lower down the career ladder pay is on a par at both banks. The average salary for first year associates was £91k ($114k) at Goldman Sachs and £90k ($113k) at J.P. Morgan, according to figures from recruiters Dartmouth Partners, with £69k ($87k) and £60k ($75k) bonuses respectively.

Anyone going into banking expecting reasonable working hours is in for a shock, but J.P. Morgan has the edge over Goldman Sachs here. 24% of people who chose J.P. Morgan said that they expected manageable working hours, compared to 14% at Goldman.

Bankers clearly want more of a life outside of work, as 45% of J.P. Morgan voters said it was important to them, compared to 41% at Goldman. Interestingly, Goldman lags behind its banking peers in the top five – 28% of those who voted for Citi expected reasonable working hours, and 21% of those who chose Morgan Stanley said the same.

What’s more, while Google is known for making every effort to ensure its employees never have to leave the office, 58% of those who voted for them think that more reasonable working hours are on the cards.

U.S. banks beating European firms

It’s no secret that European banks have been losing out to their U.S. rivals. U.S. banks have long-dominated their home turf, but more recently they’ve been eating up market share from domestic banks in Europe. This is reflected in our rankings.

Deutsche Bank has been at the sharp end. It’s been rolling out some big cuts to its investment bank, making structural changes and cutting compensation to the bone. The gloom around Deutsche Bank has meant that it has fallen more places than any other major bank in our rankings. Last year, Deutsche Bank was ranked 11^th in the global Ideal Employer rankings, but it has fallen six places to 17^th in 2017.

Deutsche’s recent moves have impacted how finance professionals perceive it across the board. Just 52% of respondents who voted for the bank believe that it offers a competitive bonus and 63% said they expected a competitive salary – this is among the lowest of any investment bank in the rankings and is down from 58% and 72% respectively last year.

Similarly, just 40% of respondents said that Deutsche Bank’s financial performance was a strength, down from 54% last year.

Most European banks fell down our rankings year on year, though. UBS slipped two places to joint 8^th in 2017, as did Barclays which ended up in 14^th. Credit Suisse and BNP Paribas also fell by one place. HSBC, which moved up one place to 7^th, was the only European bank in the top 20 to improve its position.

Meanwhile, U.S banks Citi and Bank of America Merrill Lynch both moved up two places to 5^th and joint 8^threspectively.

The growing threat of large technology companies

Google finished third in the global rankings again this year. To some extent, this is simply a case of financial services professionals choosing a seemingly innovative and exciting fantasy company while remaining firmly employed at a conservative bank.

But banks need to be aware of the growing appeal of technology companies to their employees. It wasn’t only Google that made the rankings. Facebook, Apple, Microsoft and Amazon were all in the top 30 this year – and made some big gains.

Amazon, for instance, moved up 17 places to 26^th in the 2017 rankings, Facebook went up three spots to 15^th,and Microsoft jumped up seven places to 24^th.

Banks are positioning themselves as technology companies. More than 25% of Goldman Sachs’ employees are technologists, while J.P. Morgan employs 40,000 people in technology globally.

Whether banks like it or not, they need to accept that these technology companies – as well as a plethora of fintech start-ups – are competing against them for talent. Instagram recently said that it was actively trying to hire “disillusioned quants” from financial services organisations, for example.

But the flow of talent goes both ways. J.P. Morgan’s new head of machine learning, Geoffrey Zweig, joined the bank from Microsoft, the head of product for Goldman Sachs’ new retail platform Marcus, Michael Cerda, came from Facebook, while HSBC’s new digital CTO Phil Cheetham came from AOL.

Despite the increased focus on technology in banking, these large tech firms are still viewed as more innovative. 78% of respondents to the Ideal Employer survey who said they wanted to work for Apple expected challenging or interesting work, and 79% said the same for Google. For the top five banks, this figure was 42-56%.

View the complete 2017 Ideal Employer Rankings

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HSBC has hired a top trader who left CQS in November

March 28, 2017, 2:52 am

≫ Next: Jefferies has big plans for its EM trading desk, and has been poaching from larger banks

≪ Previous: The 10 companies financial services professionals are desperate to work for

HSBC is it. The British bank, whose investment banking operations are now under the control of former Goldman Sachs banker Mathew Westerman, has hired a well known trader who left a well known hedge fund at the end of last year.

Greg Sadler, who left CQS in November, is understood to be joining HSBC as head of financials trading in April.

Sadler is a popular and experienced credit trader, having spent 16 years working in banks (Morgan Stanley, Citi and Barclays) before moving to CQS in November 2013 to trade financials. CQS is run by former Credit Suisse trader, Michael Hintze.

His decision to return to banking follows a trend: yesterday we reported that an equity salesman left Goldman Sachs for a hedge fund before coming back to Goldman again. Hedge funds are having a hard time. Headcount at CQS fell by nearly 20% last year as the fund cut costs.

HSBC is also cutting costs and heads and has been trimming senior equities traders in London. However, Sadler’s arrival suggests it’s in the market for good people in London even as it contemplates moving some equities jobs to Paris. HSBC didn’t immediately comment on the alleged appointment. Sadler’s appointment follows the exit of John Gousias HSBC’s head of investment grade and high yield bond trading for hedge fund Millennium Management in January.

HSBC doesn’t pay as well as U.S. investment banks and isn’t generally seen as a popular bank to work for. However, it ranked eighth our recent survey of ideal employers, down from 7th last year.

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Jefferies has big plans for its EM trading desk, and has been poaching from larger banks

March 28, 2017, 4:27 am

≫ Next: I left M&A for corporate development. This is what it’s like

≪ Previous: HSBC has hired a top trader who left CQS in November

Don’t call Jefferies a small investment bank. At least when it comes to emerging markets trading, the U.S. investment bank has ambitions to compete with the big players – and it’s been hiring.

Jefferies has been building its emerging markets sales and trading team over the past few months, and has plans to hire more people as it aims to move up the league tables, according to sources close to the situation. “We want to be thought of less as an agency or brokerage and more of an institutional firm in the same league as Citi or J.P. Morgan,” says one source within the bank.

So far, this has meant some big hires from larger banks. Aaron Fernandes, who worked as a director in emerging markets trading at Barclays in New York, moved to London to head up Jefferies’ emerging markets team earlier this month. Meanwhile, Mouloud Ameni, a former trading in Nomura’s emerging markets credit team, has joined Jefferies as a trader focused on Central and Eastern Europe, and Turkey bonds. Kevin Kelly, an executive director in emerging markets trading at Goldman Sachs in London, also joined Jefferies last year.

Jefferies has also been hiring in equity research focused on emerging markets, although these are largely at the junior level. Anna Perekatova joined as an associate in equity research from Goldman Sachs earlier this month, Sebastian Patulea has been hired in as an associate in equity research from Bloomberg. Meanwhile, Ebba Bjorklid, who worked in research at Credit Suisse, also joined Jefferies in March.

Jefferies is understood to still be on the look out for sales and trading staff focused on emerging markets, particularly Russian and Africa, and more hires should be announced in the next few months.

Jefferies has slowly been rebuilding its London operation since the middle of last year, following an unusual number of senior exits. It now has 409 employees registered with the Financial Conduct Authority, up from 389 in June 2016. However, it’s still down from beginning of last year when it had 415 employees in the UK.

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I left M&A for corporate development. This is what it’s like

March 28, 2017, 5:12 am

≫ Next: The banks paying juniors the most are not the ones you think

≪ Previous: Jefferies has big plans for its EM trading desk, and has been poaching from larger banks

If you’re working in an investment banking division (IBD), you might be thinking of escaping to the buy-side. Maybe you want to cut your working hours? Be warned: if you move to private equity, this probably won’t happen. Shorter working hours are more likely in corporate development.

I spent just over a year working in M&A for an international bank in London. I left late last year and now work in corporate development for a building services company. This is what I’ve learned about leaving banking for corp dev.

1. You’ll need to know your stuff already

Most of the time, corporate development directors are too senior to train analysts. In a bank there’ll be a lot of you in your 20s and you’ll all discuss valuations and modelling. In corporate development you’re more likely to be the only 20- something. If you don’t know your stuff, you won’t get to see the interesting parts of the job such as leading M&A processes, running valuations or managing negotiations and tactics.

2. The teams are less hierarchical and the culture is less brutal

This probably depends a bit on the size of the corporate development team you join. A big team might resemble a class banking hierarchy, however teams in corporate development are often smaller and the hierarchy much flatter than in a bank.

Corporate development is also a lot less high pressured. Because banks are so hierarchical, managing directors will often pile on the pressure to secure the next mandate. The banking M&A team responds with permanent over-achievement and attention to detail. In corporate development you still need the same attention to detail, but the tone is less harsh.

3. You’ll need to know the sector

If you work in corporate development you’ll need to know your particular market in a lot of depth. If you work in an investment bank you’ll get to switch between different sectors and sub-sectors as you work with different clients and you’ll need to know what’s happening in different markets. In corporate development it’s all about one market – the market your particular corporate operates in.

4. There’s less in the way of pointless work

If you’re an analyst or associate in an investment bank, you’ll be familiar with pitching. Much of your life will be spent putting together pitch decks, or pulling all-nighters before the pitch is presented to clients. Ultimately, the managing director making the pitch may simply flip a few slides. It may not even get opened in front of the client! The pitch deck is simply a door opener.

There’s no pitching in corporate development and so there’s less work which leads to nothing. However, you’ll still have to spend a lot of time reading through all the information memoranda banks send you and assessing the valuation of target companies and the commercial rationale for buying them.

5. It’s much more about M&A than strategy

Again, this may vary by corporate but my experience is that 80-90% of the day in corporate development is about M&A (ie. managing processes and running financial models). The rest can be summarised as strategy and involves briefing notes for the CEO or CFO of the company, competitor analysis and other strategic work.

6. The work is more in-depth

I find corporate development more analytical than working in M&A. You’re closely connected to the business units and you analyse the revenue and cost synergies in a lot of detail (whereas in banking you’re much more likely to simply assume that a percentage of sales are synergies). You also get to discuss your findings with the real experts in the business, which I find very rewarding.

7. The salary’s the same, the bonus is lower

How about pay? Well, you’ll probably get a similar salary but a lower bonus. The big bonuses in banking help compensate for the long hours, night shifts and weekend work. In corporate development the work/life balance is generally better (unless you’re on a deal) and so you’ll get paid less. It comes down to whether you value free time and flexibility and how much this is worth to you in monetary terms.

8. It’s not necessarily forever

Lastly, just because you’ve left M&A for corporate development now, don’t suppose you’ll never go back again. Moving to corporate development isn’t a life time decision. You can always move back to banking later. Banks will appreciate the network you have built and the corporate perspectives you have gained.

Alex graduated from the University of Mannheim and Frankfurt School of Finance & Management. He worked as an analyst in investment banking in London and now works as an M&A professional in corporate development in London. Prior to that, he gained investment banking working experience in London and Frankfurt. Alex is now dedicating his time to sharing career advice via the ‘M&Academy’ platform, where he discusses how to get into M&A, ECM, corporate development, private equity and leveraged finance.

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Contact: sbutcher@efinancialcareers.com

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The banks paying juniors the most are not the ones you think

March 28, 2017, 8:11 am

≫ Next: Morning Coffee: The cunning plots to save the City of London from Brexit. Goldman partner’s sandwich epiphany

≪ Previous: I left M&A for corporate development. This is what it’s like

Which investment banks in London pay the juniors in their investment banking divisions (IBD) the most? You might think it would be the big U.S. houses with their deep pockets and deep fees. It’s not, or at least not always.

If you’re an analyst in an investment bank and you’re chasing a big pay package you want to work for Bank of America Merrill Lynch, or maybe J.P. Morgan.

Once you hit associate level – typically four years into your investment banking career (although a year earlier at banks which have introduced “accelerated promotions”), you’ll probably earn more working for a Swiss bank.

As the chart below, based on figures from London recruitment firm Dartmouth Partners reflects, it’s UBS and Credit Suisse that are the biggest payers at associate level in investment banks. By comparison, some of the big U.S banks which you might expect to pay well are rather less generous. UBS ranks in the top cohort despite upsetting its juniors by freezing salaries this year.

How about Deutsche Bank, which is reportedly paying above the odds to attract juniors on Wall Street and which scrapped performance bonuses above assistant vice president level this year? As the chart shows, Deutsche has kept up with the pack when it comes to paying juniors, but it’s not in with the front runners. Barclays, meanwhile, pays on a par with Goldman Sachs for the first few years – which might come as a surprise to anyone who thought European banks paid the least.

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Contact: sbutcher@efinancialcareers.com

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Photo credit: Chance by Mark Strozier is licensed under CC BY 2.0.

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Morning Coffee: The cunning plots to save the City of London from Brexit. Goldman partner’s sandwich epiphany

March 28, 2017, 3:07 pm

≫ Next: Why you can’t find a new finance job – yet

≪ Previous: The banks paying juniors the most are not the ones you think

Today is D-day – Theresa May is about to pull the trigger on Article 50 to get the UK’s formal exit from the EU under way. But, as the City of London awaits a potential dreaded hard Brexit, there are some reason to believe it’s…going to be OK.

Well, sort of. If last week was all about U.S. investment banks speeding up the movement of people out of London into continental Europe, now senior executives in U.S. investment banks are supposedly talking about slowing the whole thing down. The Financial Times reports that American bankers speaking on the sidelines of the World Economic Forum at Davos in January said that even in a worst case scenario, the first stage would involve setting up the necessary legal entities and regulatory approvals while keeping things flexible. This would “cost hundreds of millions of dollars but not a lot of people moving.”

Instead, the loss of thousands of jobs is likely to occur in the second stage once the UK firms up trading arrangements with the EU. This could take years. “This is going to take a lot longer than people think,” the US executive said. “This is about real people and real people have to make decisions.”

Better still, economist Professor David Blake has just produced a huge, 177 page report called Brexit and the City – which he claims has been ignored by mainstream media – in which he states that London could become an even bigger financial centre. Blake’s principal argument is that the loss of passporting means that the City is freed from the shackles of regulation and is therefore even more appealing to international banks looking to do business in Europe.

“I feel like a Russian dissident,” he told Reaction. “In this case it’s not the Soviet state that is covering up my work but the Treasury, the big City voices, the US banks and their lobbyists in Brussels and powerful newspapers that are still arguing for Remain. They can’t get over what’s happened. This is a continuation of Project Fear. ”

Blake’s position has been supported by another report out yesterday by the CEO of consultants Opimas, Octavio Marenzi. Much of the regulatory headache “such as EMIR, the appropriately named MAD, CRD, AIFMD, MAR, and the truly awful MiFID II” have been “foisted” European financial services firms by Brussels, he says. Brexit is therefore an opportunity to tear up the rule book and start again – deregulation is coming to the U.S., after all, why not the UK?

This, Opimus says, is the likely impact on jobs – 40,000 created in London, largely trading jobs, rather than 37,000 lost under third country status (or the result of a hard Brexit) or 8,000 jobs exiting the UK if it manages to secure regulatory “equivalence”.

Screen Shot 2017-03-28 at 22.31.21

All of this has to be tempered by the fact that many banks – think UBS, Morgan Stanley and Goldman Sachs – are reportedly already moving jobs out of London.

Separately, Goldman Sachs partner Clare Scherrer says that if women want to succeed in investment banking, they need to get in front of clients as soon as possible to break down any preconceptions that they might have. She told a Goldman podcast – reported by Business Insider – that the CEO of an Italian company in Milan got upset about a woman coming to the meeting because he hadn’t booked them into a nice restaurant. It’s OK, she says – sandwiches were just fine.

“And we got to the company, we started the meeting at the cafeteria, eating sandwiches,” she said. “Fifteen minutes into the meeting, he no longer was focused on me being a woman; he was focused on my content. He was focused on the fact that I actually knew the most about the topic he wanted to cover within the Goldman Sachs network, and the cover of the book didn’t matter; the content of the book is what mattered.”

Meanwhile:

Goldman Sachs partner Joanne Hannaford has been promoted to head of technology for EMEA and Asia (Business Insider)

And promoted two new heads of restructuring (Reuters)

The Qatar Investment Authority is expanding into the U.S. and continuing to invest in the UK (Bloomberg)

The UK’s Financial Conduct Authority is going start naming individual traders (Bloomberg)

“The combination of machines replacing traders where they can and cutbacks overall in financial institutions in terms of budgets has made it difficult for all vendors frankly to maintain [terminal numbers].” (Financial Times)

Coming together and exposing workplace bullies is the way to stop them (Guardian)

Firms asking for college degrees for menial jobs (WSJ)

Investment banker Ken Moelis has donated $10m to Wharton for liberal arts graduates to study for an MBA (WSJ)

Follow @paultclarke

Contact: pclarke@efinancialcareers.com

Photo: Getty Images

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Why you can’t find a new finance job – yet

March 29, 2017, 2:51 am

≫ Next: The former head of equity strategy at Brevan Howard on how to survive as an analyst

≪ Previous: Morning Coffee: The cunning plots to save the City of London from Brexit. Goldman partner’s sandwich epiphany

It’s not you, it’s the market. If you’re looking for a new front office banking job and you can’t find one, that might be because banks are still biding their time. This could be about to change, maybe.

“There’s a lot of waiting,” says one fixed income headhunter who specializes in macro products, “Banks still want to see who leaves.”

“It’s not a dynamic market in any sense,” agrees Christian Robbins at fixed income search firm Alpha Tradestone, “But the feeling is that it won’t take much to instigate an episode of musical chairs.”

The musical chairs will start if and when people who are unhappy in their current seat get up in search of something better. Optimists point to signs that this is already starting to happen, with a handful of recent exits from Deutsche Bank, Credit Suisse, and Goldman Sachs, for example.

Mostly, however, the movement in the first quarter has happened in tier two houses. Here, emerging markets are hot. Commerzbank and Jefferies have both been bolstering their emerging markets teams. So too has Standard Chartered, which hired Matthew Dunker, an emerging markets credit trader from J.P. Morgan, along with Harroon Sana, a new head of rates sales from Scotiabank. Elsewhere, Cantor hired Nick Taylor from Lombard Forte Securities as an MD in bond sales in London. And HSBC hired Greg Sadler from CQS.

While tier two banks spring into action, hiring remains surprising muted at tier one houses. Despite headhunter claims that Morgan Stanley has decided it’s “underweight in FX and emerging markets” and is “actively looking to hire and out there speaking to everyone,” there’s little sign of anything conclusive. Competition for places is high thanks to an influx of talent from hedge funds. Funds like Eton Park and Prologue have closed and others like CQS have cut costs with the result that ex-bank traders who’ve spent much of past decade in hedge funds are suddenly competing for senior roles. Why hire an also-ran when you could hire a (faded) star?

It’s not much better in cash equities, a business in which Oliver Wyman and Morgan Stanley suggest revenues are in terminal decline. “There’s some specific hiring across most firms in the City within their core franchise, but most banks are still cautious,” says Oliver Rolfe at search firm Spartan Partnership. “With MiFID II approaching next year, most banks are in wait and see mode.”

In equity research, banks are cutting rather than hiring. Kai Korschelt, head of European tech research is understood to have gone from BAML, along with Joel Spungin, a business services researcher and the leisure team, run by Simon Larkin. Bank of America declined to comment, but headhunters blame MiFID. “It’s survival of the fittest,” says one. “You don’t need 30 people covering stocks any more, you need 10.”

In corporate finance and M&A, recruiters say hiring is stifled by senior bankers’ refusal to step down and junior bankers’ diminishing enthusiasm for the buy-side. “There are fewer jobs in hedge funds and private equity than their used to be,” says Andy Pringle at search firm Circle Square. “Because of this, there’s less of the natural movement that usually occurs at this time of year.” With private equity funds sitting on unprecedented amounts of dry powder, juniors who do move to private equity are understood to be concerned about dealflow – there’s simply more action in banks. One large American bank is said to have trimmed its M&A hiring plans after fewer senior bankers than usual exited.

Herein lies the problem. The 2017 hiring carousel will only really start if the dissatisfied bankers of the world decide to do something about it. So far there’s little sign of this. For all Deutsche’s bad bonuses and headhunters’ claims of unprecedented receptiveness from DB people, exits from the German bank have been a trickle rather than a rush. Credit Suisse’s best traders are said to be tied in by the retention bonuses averaging CHF1.5m paid to 150 top staff this year. As risk aversion trumps restlessness, gaps that might have opened up haven’t yet to do so. “In banking nowadays everyone complains about their sh*tty bonuses, but no one ever leaves of their own accord,” one trader observes.

Let this be a call to action. Or not.

Follow @MadameButcher
Contact: sbutcher@efinancialcareers.com

“”

Photo: Alphotographic/Getty

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The former head of equity strategy at Brevan Howard on how to survive as an analyst

March 29, 2017, 3:52 am

≫ Next: How to get into fintech if you can’t code

≪ Previous: Why you can’t find a new finance job – yet

Hedge funds have long been an escape route for sell-side analysts, economists and strategists looking for a way out of shrinking investment banks’ research desks, but even here they’re becoming endangered.

Hedge funds are embracing artificial intelligence, they’re hiring big data specialists and training algorithms to think like the best human traders. If they want to survive in hedge funds, human analysts have to change, says the former lead equity strategist at Brevan Howard Asset Management.

“Working in a hedge fund is naturally premised on an egotistical belief that you have a better insight than other actors in the market – that you are the ‘smart’ money,” says Amit Khanna, who worked for nearly ten years as lead equity strategist at Brevan Howard Asset Management. “However, it would be naïve to not also realise the world has become a lot more complex.”

Khanna says analysts’ future success will be about using the ‘quantimental’ approach of blending discretionary judgement with insights from statistics. Understanding the “idiosyncratic narrative” of a stock together with the macro backdrop is important if you want to endure, he says. If artificial intelligence is really going to gain any traction in asset management, it needs to be combined with traditional expertise.

“I think the aspect of domain expertise is under-appreciated,” he says. “A robust process for selecting, analysing and presenting data and then converting to actionable trades is paramount. It requires experienced market practitioners to design the algorithms alongside the PhD data scientists.”

Khanna has just left Brevan Howard to join Quant Insight, the start-up that uses AI for securities analysis. It was founded in 2014 by former Brevan partner and macro portfolio manager Krishnan Sadasivam and Mahmood Noorani, who worked at UBS, Bluecrest Capital Management and Millennium Capital Partners, but has just kicked off its product this year.

Hedge funds are still working out the best ways to handle the huge new datasets they’re increasingly buying in from third parties. Having, say, satellite crop images or credit card receipts is one thing, but turning that data into actionable trades that generate alpha is the main challenge.

“Funds are hastily investing in data scientists, expanding their quant capabilities as they are forced to adapt and show their clients they are adapting, but it remains a learning curve for most,” says Khanna. “Identifying the right ingredients to then concoct the best recipe requires domain expertise with world class machine learning or AI expertise.”

Quant Insight says that it’s aiming to bring AI expertise to the masses – beyond the confines of the top computer-driven hedge funds who employ legions of PhDs. But the firm is still placing traditional financial services expertise at the heart of its business. Its quants and programmers are based in India, and it’s tapped astrophysicists at Cambridge University for machine learning expertise. Most of its London-based staff come from top hedge funds and investment banks, because it believes that this expertise helps make sense of the numbers.

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Contact: pclarke@efinancialcareers.com

Photo: Getty Images

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How to get into fintech if you can’t code

March 29, 2017, 4:11 am

≫ Next: A head of rates trading at Credit Suisse has left for Bluecrest

≪ Previous: The former head of equity strategy at Brevan Howard on how to survive as an analyst

Fintech firms are not only looking for coders. There are plenty of jobs available to people who have a less technical background. Here are the top roles available if you want to work in fintech, but are not a developer.

Project managers and business analysts

The financial services firms’ increasing use of technology to automate workflow and processes has created new opportunities for non-developers who can understand how technology affects the big picture.

“Fintech needs project mangers and business analysts who have the subject matter expertise and can direct technology teams,” said Peter Laughter, the founder/CEO of Spartoi Group and Wall Street Services. “People who understand sales and marketing are also key.”

Rachel Leit, manager of information technology at Michael Page, a recruitment firm, also sees demand in the fintech space for various roles in the project management office (PMO) – sometimes called program management – and business analysts. Most of the roles she places are associates, assistant vice presidents, vice presidents and directors, but she has seen recruitment activity for the head of project management and even partner hires.

The sweet spot is between three and eight years of experience at a Big Four professionals services firm, a bank or a management consulting firm, Leit said.

“Going into the program management office where you can leverage organizational, project and program management skills is a career path into IT, particularly if you are not a coder,” said Anne Crowley, co-founder and managing director of Jay Gaines & Co., a Wall Street recruiter.

“Business analyst roles are more focused on your knowledge of the given business area such as finance and accounting and your ability to capture that into requirements,” she said. “Consulting is a great path into IT,” Crowley said. “You’d pick up methodology, as well as process, project and program management skills.”

Relationship managers, salespeople and marketers

While it’s no secret that far fewer traditional trading roles exist than a decade ago, the flip side of the disruptive forces that have caused the thinning has been the creation of a host of new roles at trading technology vendors. Though these firms need technologists, the importance of well-rounded sales, account management and sales-engineers to these vendors is critical as well.

Sean Sullivan, the chief revenue officer of trading technology provider LiquidityBook, says a skilled relationship manager is someone who learns a client’s business and provides solutions that deliver value.

“Relationships are still important in this industry, but today they’re built on far more than just a shared experience at a ballgame or steak dinner,” Sullivan said. “Everything about our business is more sophisticated and complex, so understanding – from a deep technical level – the client’s challenges, and how your technology can solve them is imperative.

Hybrid sales, support and platform-integration roles

Without hands-on coding and development experience, you can be considered for various hybrid positions at banks that are still in tech. For example, sales support and IT support roles.

“You have to have a good understanding of these technologies to act as a liaison between the business and tech professionals – there is a little bit of a learning curve,” said Shea Shepard, managing consulting of information technology at Michael Page. “Developers typically don’t have the soft skills to communicate to the business what they can actually do, and some don’t have the ability to customize code to the platform they’re developing.

Roles like IT business analyst, sales support and IT support analyst are maybe the easiest way to get into technology for someone who has a good concept of tech but doesn’t have hands-on coding ability,” he said. “They act as intermediary between the business side and developers, which is a way to get your foot in the door and move into a technical team away from the business side, invest time with developers in learning that side of the business

In the fintech space, sales engineers are individuals who might have some computer science experience or a technical background, but they didn’t dive deep into hardcore coding. They work alongside account managers and business development professionals, and they sometimes go on meetings with the sales team.

“If they’re an engineer, the director of app development, the CTO or a subject-matter expert that can explain everything about the platform or product, that would certainly involve a strong understanding of the development,” Shepard said. “They understand the coding going on in the backend without writing the code themselves.

“They could have a computer science degree or a communications degree but they found themselves in a more technical role out of school,” he said.

Legal, compliance, risk, audit and strategy

For these types of roles, the background that fintech hiring managers are looking for are candidates with deal experience dealing with current regulations.

“Those are always changing, but they do want to hire people with risk and regulatory experience,” Leit said. “They are the middlemen between the developers and the business, not individuals producing revenue, but rather supporting the front-, middle- and back-office.”

Technology strategy roles are typically for professionals who have worked at management consulting or Big Four professional services firms. Fintech firms are looking for people with business transformation experience to build out their internal strategy groups with the IT or operations department.

“It’s typically hard to get into an internal consulting group with just banking knowledge unless they grow into that role in the firm,” Leit said. “Typically these candidates are coming from an advisory firm, either Big Four or management consulting.”
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Photo credit: PhotoInc/GettyImages
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A head of rates trading at Credit Suisse has left for Bluecrest

March 29, 2017, 5:16 am

≫ Next: “I’m French and I’m starting at a London bank in 2017, Brexit or not. Here’s why”

≪ Previous: How to get into fintech if you can’t code

Generous retention bonuses or not, senior rates traders are coming out of Credit Suisse. Following last week’s exits from Credit Suisse’s U.S. rates team, insiders say Credit Suisse has lost a senior rates trader in Asia.

Ron Choy, Credit Suisse’s head of Japanese rates trading, is said to have quit the bank for BlueCrest Capital Management. BlueCrest has an office in Hong Kong, but it’s not clear whether Choy – who was educated at MIT in the U.S. is planning to join in Asia or elsewhere.

Credit Suisse didn’t immediately respond to a request to comment on the move, although colleagues confirmed Choy’s exit. BlueCrest didn’t confirm the appointment.

Credit Suisse cut its London rates trading business heavily last year, but retained a presence in Asia and the U.S. After two years of disappointing bonuses, the Swiss bank has attempted to tie in traders with CHF1.5m ($1.5m) retention packages for top performers.

Choy’s exit suggests the retention strategy isn’t entirely successful. Headhunters said funds like Bluecrest are more willing to hire from banks in Asia than in London and New York. “It’s hard for them to find good guys in Asia,” said one, speaking off the record. “There are fewer hedge funds in Asia and the bench is a lot smaller. London and NY are much bigger hunting grounds.”

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Contact: sbutcher@efinancialcareers.com

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Photo credit: ||||||/\|||||| by Thomas Leuthard is licensed under CC BY 2.0.

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“I’m French and I’m starting at a London bank in 2017, Brexit or not. Here’s why”

March 29, 2017, 5:34 am

≫ Next: So, Frankfurt, Dublin, Paris, Madrid, or Amsterdam?

≪ Previous: A head of rates trading at Credit Suisse has left for Bluecrest

I’m French, I’m just finishing my studies at a grande ecole in Paris and later this year I’ll be starting a new job at an investment bank in the City of London, just six months after Theresa May triggers Article 50.

Maybe I’m crazy. Maybe I should just go to New York and hope for the best. But I, like the vast majority of my fellow students in France, still want to work in London. There are some good reasons why.

1. It’s the best training ground in the world

I may decide that investment banking is something I want to do forever, or I could switch careers entirely after a few years. Either way, two years at a bulge bracket bank in London is a badge of honour that will bolster my CV. Everyone knows how competitive it is to get a front office banking job in London and employers are aware of how good the training is.

In two years’ time, London’s position as a leading financial centre might begin to wobble, but by that point I’ll have other opportunities available to me. Who knows, I could end up back in Paris?

2. Investment banks still want to hire us

Investment banks haven’t cut their graduate recruitment targets because of Brexit, nor has it impacted how or where they recruit. This means that a lot of the new recruits this year are coming from the EU and there are no plans to change this. At least, this is what the senior bankers have been telling us. It might just be to reassure us, but it worked.

3. We’re the favoured candidates

Believe it or not, investment banks in London don’t only want to hire from UK universities. A lot of investment banks have been fighting over students from top French universities. I’ve been through the application process for ten investment banks and have had multiple offers to choose from.

4. The world has not ended

The jobs that leave the UK because of Brexit are more likely to be focused the trading floor. I want to work in IBD, and the vast majority of these jobs are going to stay in London. Brexit has impacted M&A volumes in the UK – a 2% reduction year on year so far in 2017 – but a lot of the bankers we speak to are pretty optimistic.

The fact is that a lot of French students don’t bother applying for investment banking jobs in London because they think they don’t have a chance. Brexit is only going to make this worse. My advice – work in London while you can.

Amelie Petit, a pseudonym, will be starting her first investment banking job in London this September.

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So, Frankfurt, Dublin, Paris, Madrid, or Amsterdam?

March 29, 2017, 10:06 am

≫ Next: Morning Coffee: 46 year-old ex-Credit Suisse MD struggling despite earning $1m. JPM’s 125k Brexit man hours

≪ Previous: “I’m French and I’m starting at a London bank in 2017, Brexit or not. Here’s why”

It’s Article 50 day. To mark the occasion, Goldman Sachs has told staff there may be “some changes to its footprint.” Morgan Stanley has sent a memo saying it’s preparing for a worst case scenario in which it must establish a “significant entity” in the EU. And J.P. Morgan is reportedly scouring Europe for a potential new home after Brexit.

In the event that your role is relocated by 2020 or beyond you may not have much say in where you end up. But you should at least know what you’re aspiring to. While banks make their own calculations, this is what the European alternatives look like from the perspective of the banker on the street.

1. Pay is highest for front office staff in Frankfurt

If you’re interested in your top line, you’ll probably want to relocate to Frankfurt. Figures released last year by pay benchmarking company Emolument show Paris-based analysts in investment banks earning 10% more than comparable analysts in Paris. Emolument didn’t release similar figures for other European cities. However, figures from recruitment firm Robert Walters suggest even third year analysts are paid salaries of just €50k in Madrid – 24% less than in Frankfurt, while figures from recruitment firm Morgan McKinley suggest analyst salaries in Dublin vary from around €45k-€60k.

2. Pay also looks highest for risk staff in Frankfurt

Robert Walters’ sometimes erratic figures also suggest that Frankfurt risk professionals earn the most. Although Robert Walters’ salary survey isn’t entirely comparable across job title and experience level, it looks a lot like Frankfurt risk professionals are the highest paid, as per the chart below.

3. But income tax rates look most favourable in Dublin and Luxembourg

If Frankfurt wins on gross pay, it looks less appealing when it comes to net pay. As the table below shows, Frankfurt levies income tax of 42% on incomes above €54k (£47k). However, this is only half the story. German workers are also expected to make generous payments to the country’s social security system. For high earners these can amount to another 20% of gross income.

Paris’s halving of the tax burden for expats under its “inpatriates regime” for the first eight years of employment in the country makes the French capital look more appealing. Overall, though Dublin offers the best long term prospects for paying less tax. Luxembourg is also appealing, although complicated: at lower levels the Duchy operates a highly progressive income tax system which rises in increments of 100 basis points as incomes increase from €11k to €46k, Once the €46k threshold has been met and the 39% marginal rate triggered there are few further increases – even Luxembourg incomes in excess of €200k are taxed at a marginal rate of 42%. Lux therefore makes sense if you’re planning to be a high earner.

4. If you’re looking for long holidays, you want to relocate to Paris or Luxembourg

If time off is your priority, you should (predictably) be aiming for Paris. As the chart below, based on figures from the World Bank, shows workers in Paris get an average of 41 days off per year. Unexpectedly, the World Bank suggests employees in the UK are also treated generously in terms of holidays with 28 days’ paid leave per year. Banks are generally at least three days less generous.

5. If you want a job you won’t get fired from, try Paris and avoid Dublin

Paris is also best for job security. The maximum probationary period in Paris is just two months – after which you benefit from all the protections that French labour law has to offer. In Germany it’s six months, although there have been suggestions that the country will relax its labour protections for anyone earning over €100k or €150k.

6. If you want a job you’ll never leave try Luxembourg

If you’re looking for a job that’s easy-come-easy-go, Madrid is probably the place. The World Bank puts the average notice period in Spain at just three months. In Luxembourg it’s nearly a year and a half. These figures aren’t specific to banking, however.

7. But if you want a job that’ll pay handsomely when you’re laid off try Madrid

The World Bank also suggests that severance pay is huge in Spain. It’s not bad in Germany (although this may be tempered by the €100k rule). Strangely, severance pay is not especially high in France – although this may be tempered by the fact that you’re less likely to be laid off in Paris in the first place because of all the bureaucracy associated with the process.

However, you may want to avoid Madrid if you’re a senior banker without a young family to support. A study by Harvard Business School found that European countries with a “Latin culture” tend to select older workers when making layoffs so that they can create more employment opportunities for younger workers. By comparison, the study found that Anglo Saxon countries tend to fire the least productive. And that Germanic countries tend to fire young productive employees on the apparent assumption that they’ll find new jobs elsewhere.

Follow @MadameButcher
Contact: sbutcher@efinancialcareers.com

““

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Morning Coffee: 46 year-old ex-Credit Suisse MD struggling despite earning $1m. JPM’s 125k Brexit man hours

March 29, 2017, 4:16 pm

≫ Next: J.P. Morgan European chief: Don’t be a typical investment banker

≪ Previous: So, Frankfurt, Dublin, Paris, Madrid, or Amsterdam?

The thought that there might be people ‘struggling by’ on $1m a year isn’t unfamiliar on these pages. Bankers on low seven figure “packages” have been bemoaning their liquidity problems for the best part of a decade. However, it’s not often that someone voluntarily associates themselves with the condition.

Yan Assoun, Credit Suisse’s former head of European equity derivatives has done just that. Assoun divorced his wife several years ago and has been attempting to massage his alimony payments down ever since. In a well-publicized court case that has been dragging on for at least three years, Assoun argued that his $3.3m Manhattan apartment didn’t make him rich and that due to the huge debts he’s incurred his income is very low indeed. Assoun spent two years at Credit Suisse, five years at Deutsche Bank and six years at BNP Paribas, In 2013, a judge estimated that his annual income was at least $1m.

Unfortunately for Assoun his protestations have gone unheeded. The Financial Times reports that he’s being compelled to increase payments to his ex-wife (a fashion journalist who lives on a Texas ranch and earns $47k a year) to $380k annually, up from the $132k he felt financially comfortable with. Don’t expect sympathy from British divorce courts.

Separately, J.P. Morgan’s labour intensive approach to Brexit illuminates how complex the European question has become for U.S. banks. The Wall Street Journal reports that JPM alone applied a team of 75 people over nine months to ponder the best location for the bank in Europe after 2020. Assuming they each worked nine hour days, that’s around 125,000 man hours dedicated to the Brexit issue. Citi appears to have been engaged in something similar: it’s reportedly assembled a spreadsheet with 26 different variables ranking each city in Europe for desirability. London needs to hope the calculations come to nothing. Fortunately, the WSJ says most banks have a similar approach: ‘To build on infrastructure in existing offices across Europe, keep as much as possible in London and see what happens.’

Meanwhile:

Theresa May made a speech suggesting everything will be fine for banks after Brexit. Morgan Stanley CEO James Gorman then informed her on stage that other European cities had made compelling pitches for Morgan Stanley’s presence. (Sky)

EU Parliament says any post-Brext transitional deal can only last three years. (Guardian)

Jean-Claude Juncker, the president of the European Commission, said he would not be opposed to plans mooted by MEPs for offering UK nationals a form of “associated citizenship.” (Financial Times)

UBS wants to hire seven M&A bankers in Asia, won’t be wholly focusing on China any more. That was actually a mistake. (Bloomberg)

Blackrock’s making a few changes. San Francisco will become the firm’s hub for quantitative investing, and some emerging-markets staff will move to Asia from London. (WSJ)

Goldman replaces ex-head of restructuring with two new co-heads. (Yahoo)

Senior Goldman Sachs M&A banker advocates fully embracing criticism. “When you get constructive feedback, you shouldn’t let that get you down — you should actually celebrate that someone cared enough about you to give you some things that you could work.” (Business Insider)

Weary of business travel? Think yourself lucky. In 200AD a London-based merchant heading bravely to Rome on horseback in April would have spent almost 22 days travelling. (Economist)

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Contact: sbutcher@efinancialcareers.com