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Less than two years ago, Deutsche Bank CEO John Cryan began a major restructuring. Now he is reorganizing the bank’s major businesses for the second time in 18 months, reversing two high-profile strategic decisions from 2015.

The bank will also seek to put up €8bn ($8.5bn) worth of shares for sale to shore up its capital – the third time it has been forced to tap the market since Q1 2013. When Cryan took over the reins in the middle of the year in 2015, he didn’t want to sell more shares, since existing shareholders hate it.

More significantly, Cryan has decided to spend around €2bn ($2.1bn) in restructuring and severance costs to recombine the bank’s corporate-finance and deal-advisory unit with its gargantuan trading division. His decision to split them at the end of 2015 was not cheap by any means.

Keeping trading inside the investment bank was “probably the right answer in the first place,” Cryan said, according to the Wall Street Journal. “We just didn’t know it at the time.”

Deutsche CFO Marcus Schenck and global markets head Garth Ritchie will run the newly recombined investment bank and trading businesses, while Jeffrey Urwin, currently head of the corporate and investment bank, will retire. Schenck and Christian Sewing – both German – were promoted to deputy CEOs.

Separately, everyone knows that working in investment banking can be bad for you, but an anonymous investment banker has given a run down of how it affected his health. As a career, investment banking can be “incredible” he said on the Wall Street Oasis. Over the years he worked in investment banking, he developed carpal tunnel syndrome and tendinitis, lost hair, gained lots of fat, became a borderline alcoholic, lost his girlfriend and lots of friends and developed blood clots in his legs. The good news is that he’s now jumped across to private equity.

Meanwhile:

Why you don’t want to work for a large European investment bank (WSJ)

Sally Crawcheck trolls Trump (Business Insider)

Banks and buy-side firms may soon have to pay more for their contractors and temp workers (WSJ)

How an ex-investment banker and a former hedge fund salesman convinced a New York merchant bank to seed their pet-leasing fintech startup (Bloomberg)

Former Bridgewater Associates employees and contractors over the past year say that Ray Dalio fosters an environment that can be intimidating, where every meeting is videotaped and employees are encouraged to openly challenge one another, sometimes in potentially humiliating ways. (New York Times)

Bridgewater’s rebuttal. (New York Times)

Multi-millionaire David Harding, founder of one of the world’s biggest hedge funds, defended his firm against multi-billionaire Warren Buffett’s criticism of exorbitant hedge fund fees. (Reuters)

Two omissions from Buffett’s annual letter speak volumes. (Business Insider)

Here’s how Stanford frat bros turned an idea for a disappearing raunchy photo app to a giant social media company valued at $31bn. (Business Insider)

The Snap IPO underwriters will split about $85m in fees – as lead underwriter, Morgan Stanley is set to get $26m, while Goldman will get the second-largest payout, with $21m. (Seeking Alpha)

Presidential candidate Marine Le Pen’s platform advocating for taking France out of the euro and the European Union is repelling finance executives who might have considered moving jobs to Paris post-Brexit. (Bloomberg)

Aberdeen Asset Management and Standard Life are negotiating a merger that would create one of the biggest asset managers in the U.K. (WSJ)

Can bosses force employees to work overtime? (Independent)
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Now that Guy Saidenberg, the London-based global head of Goldman Sachs’ sales strats and structuring team, has retired, it’s all change in the division.

Goldman Sachs has been making some significant changes within its strats sales team to reorganise the division after Saidenberg’s departure and Elisha Wiesel’s elevation to chief information officer. For a start, according to sources close to the situation, Chris Milner, a partner and head of its fixed income currencies and commodities sales strats team, has departed.

Meanwhile, Ezra Nahum, who is currently a partner global head of fixed income currencies and commodities strats, has been handed more responsibility. He is now in charge of sales strats for FICC globally and will report directly into Isabelle Ealet, Pablo Salame and Ashok Varadhan, co-heads of Goldman’s securities division, as well as Wiesel.

Thalia Chryssikou, a London-based partner and head of EMEA interest rates sales, and Stefan Bollinger, a partner who was most recently co-head of EMEA equities sales are two of the other big winners. They have become co-head of global sales strats, with Chryssikou focused on FICC and Bollinger taking responsibility for equities.

Chryssikou has been with Goldman Sachs for her entire investment banking career. She joined in 1998 after graduating with a PhD in operations research from MIT. Before her recent promotion, she was head of EMEA interest rate, currency and emerging market strategies in London.

In her new role, she reports to Wiesel as well as Michael Daffey and Paul Russo, global co-chief operating officers of equities.

Bollinger was previously based in Hong Kong, where he was head of Asia-Pacific ex-Japan corporate sales, but is currently in London. He has been at Goldman Sachs since 2004, when he joined from J.P. Morgan where he worked within its corporate solutions and financial institutions derivatives marketing group. He was promoted to partner in 2010. In his new role, Bollinger reports to Jim Esposito, chief strategy officer of the securities division and co-head of global FICC sales, its recently-installed global co-head of fixed income, commodities and currencies sales, John Willian, and Nahum.

The memo announcing Saidenberg’s retirement said that he had “mentored and recruited” many of Goldman’s traders in equities, FX, commodities and emerging markets. But now it’s becoming apparent just how much of a lynchpin to Goldman’s strats team he was.

Not only did he have responsibility for sales strats within Goldman, but Saidenberg also helped to “evolve the Securities Division’s digital strategy to improve our workflow and delivery to clients”. This means that he oversaw big technology products like Marquee, Goldman’s internal software platform that allows Goldman to interact with clients directly.

Now, however, the digital responsibilities fall under the remit of New York-based Adam Korn, who is currently global head of the equities franchise trading and securities services strats team. This means that Korn now oversees internal projects like Marquee, but also external digital initiatives that Goldman’s principal strategic investments (PSI) group decides to commit money to. An example of the tech companies that PSI has invested in includes Goldman’s investment in financial messaging ‘Bloomberg killer’ Symphony.

Darren Cohen, global head of Principal Strategic Investments (PSI) and chief operating officer of the Digital Strategy Group (DSG), now reports into Korn.

Korn joined Goldman Sachs as an associate in 2002 within its equity derivatives research group. Before this, he worked as CFO at tech start-up Zebware, which he co-founded. He was promoted to managing director after just six years at the firm and made partner in 2010.

Saidenberg was something of a prodigy at Goldman Sachs and moved up the ranks rapidly. He joined as an associate on the London rates desk in 1999, but became an MD after just five years at the bank and an associate after six.he left Goldman Sachs in February after 18 years at the firm.

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Deutsche’s investment bank is going to be “fun” again. So promised CEO John Cryan in an interview with Bloomberg this morning. Yes, Deutsche Bank embarking on a new round of cost-cutting. Yes, there’s another re-organization, but the dark cloud of stale bonuses and job losses that’s lingered over Deutsche recently is going to be blown away by a return to growth.

Outsiders might be skeptical, but insiders seem to be slurping up the kool-aid. “The senior people at DB are pulling together,” says one fixed income headhunter who works in New York and London.”A lot of them have been through this kind of thing before at other banks and they know that things get better.” While skepticism isn’t unjustified, there are also reasons to feel a twinge of jollity.

1. As Deutsche chases revenue growth, job cuts won’t hit the front office

Never trust a CEO who says job cuts are over. In February, John Cryan said there would be “no more workforce cuts.” Today, he told Bloomberg that there will be new job cuts and that associated numbers will be given in “due course.”

The all-new layoffs could be significant. Deutsche wants to cut another €3.1bn from costs. Deutsche’s €1.7bn of cost savings in 2016 were accompanied by 1,360 layoffs, so there could be another 2,500 cuts this time around. Expect them soon: Deutsche is booking 70% of its severance and restructuring charges in the next two years.

Deutsche hasn’t broken out its new cost program on a divisional basis, but there’s reason to think the new cuts won’t disrupt the fun in the investment bank. As Dan Davies at Frontline Analysts points out, you can’t cut your way to growth in investment banking, and growth is what Cryan wants. He said today that Deutsche wants to regain its lost market share in fixed income sales and trading. It won’t do that by cutting into the muscle of salespeople and traders. It will do that by reducing “non-revenue generating front office staff”, eliminating infrastructure duplication, and cutting technology spending as per the chart below from today’s presentation.

Deutsche cost cuts

Source: Deutsche Bank

2. Risk weighted assets allocated to IBD are increasing and Deutsche will be hiring

Under its new plan, Deutsche Bank plans to show some love to its investment banking division (IBD). As legacy assets are run-off, the newly combined origination and advisory, transaction banking, and financing divisions, will account for 65% of the risk weighted assets in Deutsche’s investment bank in future – up from 55% in the past. Sales and trading will remain at around 35% of the total.

Deutsche also plans to hire. Cryan said today that he’ll reinvest in fixed income talent to replace any staff who leave. In the presentation accompanying the new strategy the bank promises to “continue to grow the APAC franchise,” especially the advisory and capital markets business, implying Deutsche will hire new bankers and markets professionals in Asia. Deutsche also wants to “deepen” relationships in M&A and ECM (suggesting it might hire some ‘rainmakers’), to recapture market share in equities and equity derivatives sales and trading, and to build contacts with the pensions and insurance industry in its rates business. Hiring all round then.

3. There’s been a stay of execution on sales jobs, but the new focus is on corporate clients

Two weeks ago, Deutsche was said to be making big layoffs in its fixed income business. Now insiders say fewer people are coming out than expected. A trickle of names like Abhiroop Lal, a director in cross asset sales, Paisley Arnold, a director in fixed income sales, and Mariano Naveira, a VP in G10 rates sales, are understood to have left the bank, but the torrent of institutional sales exits hasn’t materialized. The bigger cuts are understood to have been put on hold as the fixed income division is off to a strong first quarter.

In future, though, Deutsche will be more interested in corporate than institutional clients. The new strategy will be “corporate-client led,” with corporates defined as ” corporations, infrastructure firms, private equity partnerships, governments, insurance companies, banks and other Non-Bank Financial Institutions.” This sounds good for Deutsche’s investment bankers, but the chart below, from today’s presentation, suggests the institutionally-focused global markets business may yet get the cold shoulder.

corporate bank db

Source: Deutsche Bank

4. Deutsche wants to get it right on Wall Street

European banks are struggling on Wall Street and Deutsche Bank is no exception. However, the new $8.5bn rights issue should help plug the bank’s U.S. capital gap and make it easier to for Deutsche to boost its presence in the Americas. It’s a measure of DB’s commitment to the U.S. that John Cryan himself will be personally overseeing the bank’s U.S. business following the departure of Jeff Urwin.

5. An ex-Goldman Sachs banker is lining up to take control

While Urwin, an ex-J.P. Morgan banker, leaves, Marcus Schenck – an ex-Goldman Sachs banker – is staying and rising to the top. 52 year-old Schenck was formerly partner and head of investment banking services for EMEA at Goldman. He’s been Deutsche’s CFO since 2015 and is now co-head of the investment bank with Garth Ritchie and co-deputy CEO to John Cryan. If and when Cryan leaves (he says he’s going nowhere), Schenck is likely to be his replacement. HSBC bankers can testify to the fun that ensues when an ex-Goldman banker takes the helm.

For all the fun that’s coming, it remains that case that Deutsche has changed strategy – again. Not everyone’s impressed. “It’s a broken bank,” says one Deutsche insider. “How can you have three strategy changes in four years?”

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Photo credit: Clowns by Tony Young is licensed under CC BY 2.0.

One of the advantages of being an analyst in the investment banking division (IBD) of a major bank is supposed to be ‘the exposure’. You a buzz from working on some of the biggest deals with the biggest corporate clients. A hit from listening in on a call with a big cheese CEO. But what if it’s not such a thrill? One 23-year-old banker whose fleeting finance career ticked all those boxes, has opted for a lower-key existence at a tech firm instead.

Ilja Moisejev joined Bank of America Merrill Lynch (BAML) in 2015 after graduating with a first class degree in food sciences from the University of Nottingham. Over the next 16 months, Moisejev worked on the kinds of deals that are meant to make junior bankers excited. The $100bn ABI-SABMiller merger, Deliveroo’s August 2016 $275m funding round, and the purchase of Grolsch and Peroni, example.

It wasn’t enough. Moisejev quit BAML last October. Now he’s turned up in a more diminutive-sounding role at GoCardless, a London-based company with around 100 employees which claims to be “building a new payment network for the internet.”

What inspired Moisejev to quit the investment banking promised land? “It’s a super exciting business which I personally consider to have HUGE potential and which I feel extremely lucky to be able to join,” he says. For the moment, though, he won’t be schmoozing with the executive suite. He’s joined GoCardless as a product manager and will be working with developers to improve the tech firm’s product. Maybe that’s the most exciting thing for an aspirational 20-something to work on now?

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Securing an investment banking job at a U.S. investment banking job is notoriously tough. At J.P. Morgan, only around 2% of those that apply for graduate jobs make it and the number of applications is increasing every year. Now, however, there’s a new route in.

J.P. Morgan has extended a scheme that targets school-leavers into its London operation. For the past five years it’s been offering apprenticeships at its operations centre in Bournemouth as well as its tech functions in Glasgow and Edinburgh. But, starting in September, students will be offered the chance to work in the bank’s Canary Wharf office.

There are around 70 places available across all four offices, and J.P. Morgan is quick to point out that the competition is still stiff. It didn’t provide application numbers, but tells us that there’s been a 20-fold increase in interest over the past five years.

J.P. Morgan is one of the few banks that is offering apprenticeships with a full-time job at the end of it. The apprenticeships aren’t for jobs in the front office – most apprentices end up in trade support, risk management or product control.

“Every apprenticeship can be converted into a full-time role,” says Phill Paige, head of UK early careers at J.P. Morgan. “For the two cohorts in Bournemouth, so far only one person hasn’t accepted – and that’s because they went on to a do a law degree.”

The barriers to entry are quite low. J.P. Morgan asks for a three Cs at A-level for its finance programme and at least three Bs for the technology scheme, one of which needs to be in a STEM subject.

Paige insists that academic achievements are just a benchmark, and that it’s not basing its hiring decisions on this alone.

“It’s easy to assume that we ask for a relatively low academic benchmark and then just look for the students with three A*s, but that’s absolutely not the case,” he says.

The path to a full-time graduate investment banking job is all about experience. Spring insight weeks are the first steps, followed by (multiple) summer analyst programmes and then – if you’re lucky – a full-time role.

For someone studying at school or college, proving a commitment to an investment banking career is a harder ask. But Paige says that enthusiasm and experience is the differentiating factor.

“We don’t expect them to be the finished article, but there are ways that students can stand out,” he says. “Firstly, they could have engaged with the bank previously – through summer school or a networking event. They should also have really researched the industry and the firm, or been involved with societies that show an interest in finance.”

So, what happens if you make the cut? Firstly, the bank will put you through a video interview, where students are required to answer pre-recorded questions. The responses are then assessed through a panel at J.P. Morgan.

The next stage is an assessment centre where students are required to take part in a group exercise and then interview with a panel at the bank. Candidates are also invited to an evening of networking with managers at J.P. Morgan.

J.P. Morgan also says that it asks about students willingness to relocate for the job. Leaving home at 18 isn’t for everyone, but the bank says that it’s received more interest from students based outside of the local areas. At Bournemouth, for example, 30% of applicants are now from other parts of the UK, which was one of the reasons for expanding the scheme to London.

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It’s seven months since I left my job as a programmer at one of Europe’s top investment banks. Unlike a lot of other people in banking, I left of my own accord. After seven years working at three top banks, I’m taking my development skills elsewhere.

It’s banks’ loss. I can work across Python, Spring, Java, Jenkins, Sybase and more. I know markets. I understand risk. I’ve been through the training programs and I understand what bank’ need from their developers – but I don’t want to work in finance any more.

Banks will tell you they’re tech companies. Don’t believe them. Technologists are second class citizens in banks – if you work near the trading floor (I did), the traders are in charge. The politics in the technology team are immense and the career progression is limited. You won’t be working on innovative new technologies. Most banks are cutting costs and this means you’ll be focusing on maintaining the infrastructure. Because of this, I know people who only found out how much they didn’t know about tech after they left banking. Banks need people who can write the code they’re told to write. They don’t need innovative problem solvers.

And then you have the insecurity, especially if you’re based in London. Most banks are trying to save money. Two of the banks I worked for have started moving jobs out of London to “low cost locations”. These are usually places you wouldn’t want to live – like Poland, or Belfast. You sit there, and you can see the jobs around you disappearing. All the time, you’re working under conditions of high stress with limited flexibility – midnight calls from colleagues on the other side of the world, for example.

There are some good jobs for developers in banking. If you can do it, you want to get into a strats team of the kind pioneered by Goldman Sachs. Here, you’ll be part quant, part developer. You’ll usually get paid more and be seen more as a source of revenue than a source of cost. These jobs are hard to get though – I interviewed for a few, but I wasn’t successful.

So, now I’ve taken my coding knowledge elsewhere. I work for a consulting firm which has some finance clients. The work here is more interesting: we’re trying to add value rather than just execute. The hours are better and there’s more flexibility – no more midnight calls.

Most importantly though, I’m only now realising what I missed during my time in banking. I suddenly have time for my personal projects. I get to spend time on Github and to use open source tools. I’m a lot more aware of the current trends in the technology and fintech space. There’s a lot less bureaucracy and I feel like I’m growing again. The money’s not bad either. The only real question is why I stayed in big banks for so long.

Richard Ling is a pseudonym

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Contract jobs in Singapore and Hong Kong are booming as global banks in the cities keep a tight rein on headcount costs. But the contracting market in Asia is still less mature than in Western financial centres. Before you accept a contract, it pays to know what’s in store.

Don’t drop out

The Asian contract market is in its infancy, and too many candidates are accepting contracts while still waiting on permanent job offers, says Aily Foo, manager of temporary and contract recruitment at Links International in Hong Kong. And if perm offers come in, they’re quitting their contract assignments “after only a few days”, she adds. “It’s highly likely that these candidates will then be blacklisted by the bank for any future roles.”

Push for more pay

“Banks in Asia are now constantly under pressure to reduce permanent headcount, but work still needs doing, so the solution is to hire more contractors,” says Elliot Jackson, manager for contracting recruitment at Morgan McKinley in Singapore. “With this in mind, it’s now slowly becoming a market where candidates can request a slight increase in pay, because so many banks are competing for talent within a short timeframe.”

Assess the skills

You should ideally be looking to take on contracts that give you new skills. “Before accepting a temporary position, consider if the role itself will benefit your longer-term career path,” says Foo. “Look at whether you could develop a new skill set, which could be a stepping stone for your career.”

Get your references ready

“Banks in Asia have been tightening their on-boarding and reference checks for contractors over the past year, so you should be prepared to provide all necessary documents and fill out disclosure forms,” says Lim Chaileng, director of banking, finance and accounting at recruiters Randstad in Singapore.

Mind your hours

“Be careful to watch out for having to work overtime and during local public holidays, especially if you support regional Asian markets, which may not have the same holiday calendars,” says Lim.

Pick a bank with the best benefits

“Historically, contractors in Singapore have had limited social benefits,” says Kate Silaeva, manager of banking and financial services at recruiters Hudson in Singapore. “But now some of the international banks provide contractors with a completion or conversion bonus, as well as benefits like a wider medical insurance package.”

Don’t expect an extension

“We’re seeing more and more roles being offshored to cost effective locations such as India and the Philippines, especially in finance and operations,” says Jackson from Morgan McKinley. “So there’s a risk that contracts won’t be extended beyond the agreed tenure. That said, for strong performers, banks will still try to accommodate an internal move.”

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If you’re a recent graduate working 80 hours a week in an investment banking division for £66k ($81k) a year, you’re doing it wrong. If you got your job after going through investment banks’ convoluted recruitment process, more fool you. There are easier paths. But you’ll need to be exceptionally good with numbers.

For all the complaints that investment banks don’t value their quants, hedge funds seem pretty attuned to their importance. Bloomberg reports that funds are offering top computer science graduates from top schools pay packages of $300k in year one. Hedge funds want top students’ data analysis skills so badly they’re running competitions to attract them: Citadel’s offering a $100k cash prize to the student who wins its “datathon” data championship. It’s held 18 qualifying rounds at universities across the U.S., Britain and Ireland already and there are more to come.

These being computer science rather than finance graduates, however, the money isn’t the big draw. Rarefied data scientists are more interested in the opportunity to work on interesting products in a pseudo-academic environment, where academic-style papers are published and you get to work in teams with other students. Hence Man Group has got the Oxford-Man research unit at Oxford University and hedge fund Two Sigma is starting a partnership with Cornell.

Not everyone can be a top data scientist with a top hedge fund, but those who make it probably won’t have to kill themselves in the style of junior investment bankers. A separate study found that 44% of hedge fund employees work between 40 and 49 hours a week and that 29% work between 50 and 59 hours a week. Hardly anyone works 60 hours plus.

Separately, Financial News has caught up with Bruno Iksil – the man who claims he’s being wrongly accused of generating the $6.2bn loss at J.P. Morgan in 2012. Iksil’s finance career is in tatters, he’s had 80% of the $6m-$7m in compensation he earned each year at J.P. Morgan clawed back, and faces the prospect of an enforcement action from the U.S. Federal Reserve. The latter threat excepted, life doesn’t sound too bad. Since leaving J.P. Morgan, Iksil’s been living outside Paris where we’re told he, “runs, cycles or swims each day. He plays card games with his kids and helps with their homework.”

Meanwhile:

Why senior bankers want to work in transaction banking: In 2016, banks made $209bn from transaction banking, compared with the $172bn made by their trading arms, and $77bn in M&A. (Financial Times)

The future Deutsche Bank now looks more like HSBC than Credit Suisse or Goldman Sachs (WSJ)

Deutsche Bank has raised more than 20 billion euros in new capital since 2010 but has a market value of only 26 billion euros. (BreakingViews)

People from the markets division are running Deutsche’s new combined investment banking and markets business. (Bloomberg)

Hedge funds are buying bank stocks, especially European bank stocks. (Reuters)

Barclays has got an apprenticeship degree too. (CityAm)

New investment bank in Mauritus. (International Adviser)

It’s a great time to work in high yield. (Axios)

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Jefferies has been hiring. While few investment banks have been willing to commit to new recruits this year – thanks to Brexit uncertainty and ongoing challenges – Jefferies has continued to build its London operation.

Jefferies has been bringing in new people across the investment banking hierarchy. The most senior recent recruit is Haroon Rahmathulla, who has just joined as a managing director and head of chemicals investment banking from Barclays. He worked at the UK bank for six years, having moved to London from Lehman Brothers in New York in 2010.

Meanwhile, Juergen Schroeder, a director in corporate finance at Bank of America Merrill Lynch, joined in February. At BAML, Schroeder was the development officer for Moritz Erhardt, the intern who died of an epileptic seizure in 2013 after working for three days without sleep.

Other senior recruits include Alan Cameron, a director in the economics team at boutique bank Exotix, who joined Jefferies as a sovereign desk analyst. Ryan Burke, an emerging markets analyst at Threadneedle Investments, joined in emerging markets fixed income research earlier this year and Mark Chadwell, who worked in equity sales at Macquarie in Japan, was hired in a similar role at Jefferies in February.

Ken Rumph, who was latterly a principal at clean tech consultancy Cleantechnics has also joined as a research analyst focused on the venture capital and intellectual property sectors.

Jefferies hasn’t restricted its recruitment to the top ranks – it’s also hired juniors. Sarah Barr, a former equity research associate on the global consumer team at Nomura in New York, joined Jefferies’ London team in February. Charlie Talbot, an emerging markets credit sales associate – and former soldier – joined from Citi and Ayso van Eysinga, who was an associate at political risk research and consulting firm Eurasia Group, has joined Jefferies as an associate on the emerging markets fixed income desk.

Olga Small, algorithmic and electronic sales trader at Exane, also joined in the same role at Jefferies in January.

At the analyst level, Hamish Galgarno, joined the equity research graduate programme after interning last year and Robert Ortells, who has two levels of the CFA, joined as an analyst on the structured credit team.

Jefferies pays all cash bonuses in its UK operations, which is a good hook for anyone joining from a larger, regulatory constrained, investment bank. But there’s a catch – you have to pay them back if you leave.

Right now, the bank is in a very public spat with former employees who jumped to Credit Suisse in New York and is asking for $10m in damages from the bankers’ own pockets.

In London, exits have slowed, but it’s not all one-way traffic at Jefferies in the UK. Jayaweera, an equity analyst who worked at Jefferies for nine years, left for Peel Hunt earlier this month.

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A senior Goldman Sachs trader who has been working for the bank since graduating over 12 years ago, has just made the jump to the buy-side.

Travis Chmelka, a managing director in equity derivatives trading at Goldman Sachs in New York, has just joined Citadel as a portfolio manager. Chmelka worked at Goldman Sachs since graduating with a degree in economics from Columbia University.

Citadel has been building its team and making some senior hires from investment banks’ markets businesses – as well as other hedge funds – as it continues to expand.

For Goldman, this is another senior equities trading exit in recent months. Peter Selman, its former global head of equity derivatives who was latterly co-head of global equities trading and execution services in New York, retired last year.

Meanwhile, Dirk Urmoneit, a managing director in Goldman’s equity derivatives trading team, has joined J.P. Morgan in a similar role. In the middle of last year, J.P. Morgan also poached Jason Cuttler, the former head of Goldman’s tactical equity derivative strategy team.

It’s been a poor start for the equity derivatives desks of investment banks this year, but this follows a difficult 2016. According to figures from research firm Coalition, revenues on the top investment banks’ equity derivatives desks were down by 21% year-on-year to $12.8bn – the smallest figure since 2012.

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There’s a piece of Goldman Sachs that every other bank wants. Billions have been spent in its pursuit, but with the possible exception of J.P. Morgan, no other bank has achieved it.

The genesis of Goldman’s powers is held to be SecDB (Securities Database), the risk analytics and pricing system evolved by the firm over the past 20 years. Ever since the financial crisis, SecDB has been revered as the Platonic ideal of the black box crunching billions of numbers to produce actionable data. While other banks have multiple risk systems, Goldman has one. One system to rule them all. Turns out everyone else wants one too.

The appeal is summed up by an ex-Goldman senior technologist who worked with SecDB for years. “When Lehman went bust, it took us about twelve hours to work out Goldman’s credit exposure to Lehman across each of the entities we’d been trading with. Because every trade that GS had ever done with anybody was recorded in SecDB, we had the data by Saturday night. Other banks were still trying to work out their exposure months – yes *months* – after Lehman went under.”

He, and other SecDB progenitors and acolytes, say the system’s power comes from its uniformity. “SecDB is about having all your data (time series, trades, security information, emails…everything) in one place, with one way of accessing it,” he tells us. “At Goldman, you have one place to calculate the Black Scholes price of an option, and one place to get the discount curve for the U.S. dollar. Everyone goes to that place and everyone uses the right formulation.”

It’s this that other banks have tried replicating – with varying degrees of success. In January 2006, J.P. Morgan hired Kirat Singh and Mark Higgins, two of the core SecDB programmers from Goldman. In February 2007, Morgan Stanley hired Jay Dweck from Goldman to run a new ‘Strategic Analytics, Modeling and Systems Group.’ That same month, UBS hired Tasos Kontogiorgos and Jack Yang from Goldman to work on its own iteration of the system. And in November 2014 Deutsche Bank hired Sam Wisnia, the former global co-head of Goldman’s strats team, to implement a single risk pricing system for derivatives trades. “Wisnia was brought in by Ram Nayak and Colin Fan to sort out Deutsche’s risk and pricing systems,” a Deutsche insider told us last year. “Under Anshu Jain, Deutsche had a sort of start-up mentality. They were going for revenues and growth, and had a piecemeal desk-by-desk pricing system.”

It’s a measure of the desirability of SecDB expertise that Singh didn’t stay long at J.P. Morgan and Kontogiorgos and Yang didn’t stay long at UBS. Singh was poached to set up a similar system at Bank of America in 2010 and Yang and Kontogiorgos moved together to Credit Suisse in August 2012, where they remain to this day. “When I left Goldman I was seriously hunted by another banks to do a SecDB*,” says the ex-GS senior technologist. SecDB replicators are hot.

It turns out, however, that recreating SecDB outside of Goldman Sachs isn’t that easy. While other banks think they want a SecDB, the ex-Goldman technologist says they have no idea of the commitment required. “When I told the banks headhunting me, “You’re going to have to spend $1bn and it’s going to take a minimum of 5 years to get anywhere at all” they all got a lot less interested,” he tells us.”These banks just don’t realize how much it cost Goldman to develop SecDB over 20 years.”

Many have tried. Many have failed

This might be why many of the banks that have tried the one platform route, appear to have failed. Dweck, for example, left Morgan Stanley in 2011 and now sells violin-shaped swimming pools illuminated in fuschia by underwater cables. Neither UBS nor Credit Suisse appear to have firm-wide risk systems and are understood to have taken a more piecemeal approach instead.

J.P. Morgan has arguably come closest to replicating SecDB with Athena, the Python-based platform it began building under Singh and Higgins in 2006. J.P. Morgan declined to comment for this article, but Athena is understood to have been operative at the bank since 2009 and will reportedly be rolled out for access by clients from next year in the same way that SecDB is being repackaged to clients as Marquee.

Equally, Wisnia appears to be making headway at Deutsche Bank. Wisnia was indirectly praised by John Cryan during the German bank’s fourth quarter results call. “The new derivatives platform enables us to value and control and manage collateral for a broad range of derivatives,” said Cryan, “It makes us incredibly more efficient and is a big cost saver. It standardizes the way we look at derivatives across asset classes and improves our controls and saves costs too.”

The real question, however, is Bank of America. It is said to have spent seven figures on Quartz, its own iteration of the SecDB system. The bank didn’t respond to our request to comment for this article, but there is talk of “issues.” Last August, three of the most senior technologists working on Quartz at BAML left the bank. Although Quartz has been rolled out across the bank, the word is that it’s not really used. “You talk to people at BofA and they say Quartz is just there in the background,” says one senior quant who worked for Merrill Lynch in the past. “It’s not integral like it was at Goldman.”

For some of the technologists who were at Goldman during the evolution of SecDB, this is no surprise. “SecDB isn’t just about the technology, it’s about the culture,” says one. Goldman insiders say the SecDB platform combines the unusual virtues of extreme transparency and extreme centralization. Engineers across the firm have access to the code underpinning SecDB and anyone at any level is able to pull something out and change it – although the implementation is then approved centrally. “You can always change something and try it out, but you have to push it back to the main version before it becomes official,” says one technologist. “It encourages a huge amount of collaboration and transparency. SecDB is an accident of Goldman’s collaborative politics.” Anecdotally, it’s not like this elsewhere: even J.P. Morgan’s Athena platform is said to be dogged by bureaucracy which stifles the changes that have allowed SecDB to evolve with the market.

This isn’t to say that SecDB is perfect. As we reported last month, detractors argue that the platform is a victim of its own success. Because SecDB originated in the pre-Python era, the Goldman technologists who built it were obliged to develop their own language – Slang. Although Goldman is now encasing Slang in Python and Java wrappers, skeptics say the persistence of the language used only by Goldman will inhibit the bank’s ability to hire top technologists from other firm and to leverage open-source code repositories developed by tech competitors.

“Slang and Secdb have lots of issues,” says one Goldman technologist. “But when you’ve got 20 years of dealing with the issues you get very good at it.”

While Goldman’s ‘one system’ has had years to iron out its creases, rival banks are only just beginning. They may yet decide it’s not worth it. “There’s no need for this single position-keeping risk system” says one senior quant with experience at European and U.S. banks. “The speed at which products are traded in today’s world makes these single systems less relevant and accurate. Banks want them because they think it will save money, but they don’t realize how much they cost to implement.”

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“”

Photo credit: Superman by Daniele Civello is licensed under CC BY 2.0.

Forget siloed quant teams, overworked developers or the superiority of the human mind, there’s one big impediment to artificial intelligence really taking off in financial services – the current staff.

If AI is to gain traction in financial services, it will need to vanquish the army of financial services professionals standing in its way. At least, this is the conclusion of Raffaele Savi, a managing director and head of developed markets within BlackRock’s scientific active equities team.

“People are problematic, machines are easy,” he said, speaking at the Newsweek conference on artificial intelligence and big data last week. “People who understand finance and economics don’t think the same way as people who know a lot about computing and machine learning. We need to work together as an industry. AI is where the bulk of alpha will be on a longer term horizon.”

The biggest problem that financial services firms currently face is making the most of the vast swathes of third-party data being created every day. Asset managers and hedge funds need an informational advantage over the competition to gain an edge, and are looking beyond traditional sources of information like sell-side analyst reports and accounting data in order to do this. But most of these data sets are either too fragile, or need extra financial services domain expertise in order to be really exploited.

However, sitting around debating whether humans are better than computers is side-stepping the real issue, says Savi.

“The machines have already won. There is not a human trader alive who can compete against an algorithm,” he said.

Savi believes that hedge funds and asset managers are on the cusp of their “Pixar moment” when it comes to using AI.

“It took 20 years from Pixar being formed to Toy Story finally being released. 20 years of commitment without ever making a movie,” he said. “But two years after the first Toy Story, there hasn’t been another big animation movie made by humans again.”

“When data science and AI finally meet economic theory, the investment game will change for ever,” he said.

When this finally hits, expect it to be bloody. For all the talk of using human expertise, job losses in financial services as a result of machine learning – particularly in asset management – could be brutal.

Boutique research firm Opimas predicts that there will be 230,000 jobs lost in capital markets as a result of AI technology by 2025. Around 90,000 of these are likely to be lost within asset management firms, it suggests.

Most financial services organisations are struggling to hire AI and big data specialists because of an extreme talent shortage. But these jobs are unlikely to directly replace the money management roles being eliminated anyway. Opimas predicts that technology and data providers will hire 30,000 people to deal with demand for AI products from financial services organisations.

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The former head of international equity sales trading at Deutsche Bank says that trading careers are alive and well, and that surviving is simply a case of finding the right mentor and understanding your skills gap.

“The industry has come a long way with regards to mentorship and human development,” said Glenn Lesko, the president/CEO of Bloomberg Tradebook and former head of international equity sales trading at Deutsche Bank. “Find a strong mentor, listen and learn.”

While investment banks’ trading desks might be viewed as a cut-throat place to work, Lesko says that you should work with your colleagues to ensure you have a diverse range of skills and insights.

“Gain as diverse an internal perspective as you can from colleagues, including everyone from fellow traders to product people, technologists and operations,” he said. “Gain perspective on your firm’s clients and how they use your products and services to solve problems.”

As a senior trader, your experience in the marketplace and of clients and their workflows is an asset that can be used in other sectors, Lesko said.

“You simply need to read up and gain an understanding of the renewed focus on implicit costs that has been driven by the advent of passive and quant investment,” he said. “A former high touch trader who can convert to the new paradigm is invaluable to a client facing trading platform.”

A quantitative algorithmic approach to best ex

Lesko came to talk about the launch of OPTX, a new platform using quantitative data models and analytics to route equities and options traders’ orders to achieve best execution, but also talked about his trading. He says asset managers that are feeling fee pressure and increased regulatory scrutiny need a differentiator to compete in a brutally competitive arena.

“We’re launching a new approach to best execution, with a focus on data and analytics,” Lesko said.

“Instead of building out our own market connectivity to create the world’s biggest dark pool, we’re aggregating dark pools and connecting to counterparties in the industry through our BDARK offering,” he said.

Getting started in Asia

Lesko has worked in various parts of the financial services industry since he graduated with a B.A. in economics and business from Lafayette College in 1990. His initial role in the industry was as a research salesman and trader focusing on Asian markets at a small firm that was bought by Dutch bank ABN Amro.

“I learned a lot about how the markets worked, and then in the mid-’90s Asian markets became much bigger and many regional Asia-Pacific institutions became global,” he said. “After the acquisition, I ran sales and trading at one of the biggest Asian brokers, working to find liquidity for large global institutional investors that wanted to buy or sell equities in Asia.”

ABN Amro promoted Lesko to managing director and he moved back to the U.S. in 1999 to take charge of non-U.S. execution sales in North America. In 2001, Lesko joined Deutsche Bank as a managing director and the head of international equity sales trading after ABN Amro decided to deemphasize its U.S. platform.

By 2003, around the time that electronic trading was really gaining serious momentum for the first time, Lesko decided to leave Deutsche Bank to become a partner at CF Global, continuing his focus on international equity trading but at a outsource buy-side trading service provide founded by a former Tiger Management trader.

Advice for students and recent graduates

Tech-savvy young people have an opportunity to really make an impact on the financial services industry generally and sell-side and buy-side firms’ trading business in particular, Lesko said.

“It is important to understand their employer’s model and how they can differentiate themselves versus others,” he said.

“No one firm will be a leader in every element of the business, so it’s crucial to understand the critical skill sets and elements that your firm brings to the table and attach yourself to a firm that has a domain expertise and sticks to it as close as they can.”

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““

Private equity in China is becoming a tougher sector to work in as deals decline, funds close, and PE firms cut junior hiring.

“The PE industry is different from ten or even five years ago,” says Jason Tan, a partner at search firm Carlson Harriet in Shanghai. “In the past 24 months, largely due to China’s economic slowdown, a lot of small PE funds have closed down.”

It’s especially tough for junior to mid-level PE professionals. There’s an abundant supply of candidates who can do financial analysis and due diligence, but they usually don’t have the deal-sourcing and fund-raising skills that are now more in demand, says Tan.

Juniors are increasingly being forced out of the industry as a result. “The likely new careers for them are at the local investment banks, or in corporate banking,” says Tan.

For those remaining in the industry, deals are becoming scarcer as the growth of target companies declines.

“The number of entrepreneurs in China has been booming since 2015, but there are very few real innovative businesses here,” says an investment manager at a local PE firm in Shanghai. “What we often get from them are just ideas and PowerPoints, without a concrete business plan.”

Dominated by local players, China’s PE industry can be broadly categorised into two groups.

The first comprises of established PE firms run by investment professionals who follow a similar investment process as their counterparts in mature markets like London, New York and Hong Kong.

People with 10 years’ experience or more in this first group should not find it hard to move to another large PE firm.

“These PE firms are most interested in the candidate’s transaction sheet,” says Tan. “While in mature markets, educational qualifications also carry a lot of weight, in China the deals you’ve done and whether you’re currently working for a big name firm matter the most. And if you’ve done deals at places like Fosun Group, CITIC Capital or Anbang Insurance, you can get a new job very quickly.”

The other group of Chinese PE firms are typically newer and smaller. They were born out of traditional industries such as manufacturing and real estate, and are led by industrialists rather than investment professionals.

Working for these firms can be difficult. An investment manager at a small PE firm in Shanghai says his biggest challenge is communication with his colleagues, especially the firm’s founder.

“My boss used to run his own private enterprise, leveraging on his past experience as a government official, and then he set up the PE fund a few years ago. But he’s too dominating because he owns the connections and deals, controls the investment process and believes in his own judgement,” he explains.

The investment manager’s experience is not atypical. As a whole, Chinese PE deals are mostly done by superstars, who control the relationships with target companies. The rest of the team only take care of the administrative and transactional part of the project.

“I wish there was an established and clear investment analysis process to improve the efficiency of decision making here,” bemoans the investment manager.
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“”

Raghav Kapoor, a former Religare Capital Markets MD and Citi VP, isn’t optimistic about the long-term career prospects for equity researchers within large banks.

“A bank ultimately can’t expand its research capabilities without hiring, but research analysts are a big fixed cost on the payroll, so scaling up is difficult and expensive,” says Kapoor.

Kapoor admittedly has a vested interest in the problems besetting tradition equity research. His Singapore start-up, Smartkarma – a website offering on-demand Asian institutional investment research for a “Spotify-style” monthly subscription – is trying to take advantage of them.

In 2014, Kapoor left his MD job at Religare in Singapore to found Smartkarma with ex-colleagues Jon Foster and Lee Mitchell.

He says there were two main factors that drove them to launch the research streaming service.

“Firstly, the rise of electronic trading is squeezing margins at banks’ securities businesses, crippling their ability to employ experienced in-house researchers. With the bulk of the revenue tied to trading commissions, the outlook is despondent. If your rates are driven down 90% by tech, your volumes need to double just to keep flat – but they simply don’t.”

Secondly, new financial regulations, most notably MiFID II, are calling for greater transparency in the way banks charge for research.

“The unbundling of research is a natural catalyst for us,” says Kapoor. “Regulations are removing conflicts of interest – so research isn’t tied to corporate finance – opening up coverage of the small and mid-cap companies that banks have been ignoring.”

“When we looked at where there wasn’t much fintech disruption in the market, it wasn’t trading – it was research,” he adds. “Research is clutching on to old-world technology where the last innovation was the PDF.”

Smartkarma has signed up more than 100 “insight contributors”, including Morningstar and Daniel Tabbush, the independent analyst and former head of Asian bank research at CLSA.

Overall, these contributors – who cover about 1,600 companies across 15 Asian markets – receive a 70% cut of monthly subscription revenues, which is then divided up between them according to the popularity of their research.

“We use 23 metrics, including engagement and collaboration, to assess this,” explains Kapoor. “If your research gets cited, for example, this affects your payment. Our system is meritocratic and scalable – unlike that of a large bank.”

Kapoor says he wants to help the “many researchers who have left the large banks recently in Asia”.

“Some have set up small shops but are struggling to make money because they have to spend on hiring people in sales, compliance and operations. This all plays into our hands because we take care of these functions for them – like Amazon provides the marketing and fulfilment for its customers.”

Ex-bank equity researchers aren’t the only providers of research to SmartKarma – the firm is increasingly signing up data scientists and academics as contributors.

“The future of research now lies in data and the structured analysis of unique data sets. But you couldn’t ask a senior research analyst at a top-tier bank to do a social media research for you, for example,” says Kapoor.

SmartKarma’s customers (the firms that subscribe to access its contributors’ insights) include family offices, hedge funds, sovereign wealth funds, asset managers, and a large bank, Societe Generale, which has licenced the company’s platform to give unbundled Asia-focused research to its own customers.

The company employs 23 people between its Singapore headquarters and its new Hong Kong office.

About a third work in tech roles, another third in business development, and the others in jobs such as marketing and finance. Kapoor will be hiring “opportunistically” this year. “I like to recruit people whose skills are somewhere between tech and finance.”

This description could be based on Kapoor’s own career.

He became one of the youngest VPs at Citi in Singapore when he moved there in 2006, aged 24, to work in equity sales.

“I’m a geek at heart. At Citi I started doing tech stuff that would make mundane tasks for my team –from compliance to booking meeting rooms – a bit easier. For a front-office guy, I was at the extreme end of tech savviness,” says Kapoor.

In 2009, Kapoor left Citi to become a partner at newly founded brokerage boutique Aviate Global.

“I was 10 years’ younger than any of the senior partners. Making this move from a large bank to a start-up gave me a fearlessness that is now helping me at Smartkarma,” he says.

Aviate was taken over by Indian finance giant Religare just 18 months after launch.

“I enjoyed working there, but they didn’t embrace our culture because they naturally had a big-bank mindset,” says Kapoor. “One day I was wearing brown shoes at work and my boss told me off, saying ‘it’s not a holiday’. You don’t get that at start-up.”

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What do you know about Marcus Schenck, the co-head of Deutsche’s newly re-integrated investment bank? Probably not a huge amount. But the former CFO is now being groomed to be a potential successor to John Cryan as the bank’s CEO.

OK, so this might be a little too early to call. But Schenk’s elevation to co-head of the investment bank suggests that he – or fellow German Christian Sewing – are the most likely contenders.

The good news for battered investment bankers at Deutsche is that Schenck is a true investment banker at heart. Bloomberg reports that even when he was CFO, the former Goldman Sachs banker insisted on spending at least one day a week with clients – such was his desire to do deals.

Schenck, who is a big Bayern Munich fan, is not only installed to bring a more “German” feel to the bank, but to use his extensive network of CEOs and CFOs to bring in more business for Deutsche’s investment bank as it curtails its list of hedge fund clients. Schenck is affable, ambitious and “enjoys putting his stamp on a business”, suggests Bloomberg.

Sewing, who takes charge of Deutsche’s private and commercial bank, is also in line to replace Cryan should he decide to leave. “We’ll see over the next two to three years who will perform better and thus likely clinch the top job,” said Philipp Haessler, an analyst at Equinet Bank AG in Frankfurt.

Separately, call it a weird British thing, but there’s another study suggesting investment banks are highly unlikely to hire you if you come from a disadvantaged background.

While banks continue to espouse the notion of diversity, having the “wrong” accent and wearing the wrong clothes – yes, the “brown shoes” effect again – is more likely take them out of the running than a lack of relevant experience.

The poll of finance leaders carried out by YouGov on behalf of the Sutton Trust and Deutsche Bank showed that 82% believed that people from poorer backgrounds were held back by their presentation skills.

Meanwhile:

“You wish there were a couple big machine-learning companies out there. As an investment banker, I’d be all over them now because there’s such high demand for them.” (WSJ)

John Cryan says there’s “gonna be a lot more fun” at Deutsche Bank (Bloomberg View)

J.P. Morgan, Citi and BAML would be the big winners if Trump rolled back regulation (Business Insider)

Steve Ashley is now the sole head of wholesale banking at Nomura (Nasdaq)

FICC trading is going to be up a little bit, says Citi CFO (Bloomberg)

“I encountered a brilliant pink silk jacket worn with tailored grey flannel trousers in a global bank, and a sharply cut trouser suit with a waistcoat, in private equity, and several dresses that had sleeves as well as details of arresting originality, in globally important work settings.” (Financial Times)

Now quants can view finance as just another problem, and never have to abandon their self-conception as a scientist (Bloomberg View)

Warren Buffett gets away with sexist jokes because he’s Warren Buffett (Financial Times)

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Contact: pclarke@efinancialcareers.com

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Working as a VP in an investment bank can be a thankless place to be. It’s where your career tends to come to a standstill and the director or MD level job becomes ever more aspirational. Couple this rank with working in a trading job, and you also have to fear a 24-year-old coming for your job.

And yet, VPs have enjoyed decent increases in their pay this year. Even more surprisingly, some of the biggest gains have been in trading jobs. Figures from recruitment firm Options Group suggest that working in long end treasuries trading as a VP is the place to be. At the upper end, total compensation for VPs came in at $900k, its figures suggest, and pay increased by 15% year on year.

The figures from Options Group below represent total compensation figures for the top 25% of employees and do not include any data from people who had guarantees or who were within the top 1% of performers. But they also suggest a correlation between the level of human interaction in the trading process and an increase in pay. Spot FX traders, who work in a sector that is increasingly automated, were among the lowest paid with compensation between $250-500k and received the lowest uptick in pay with a 3% raise.

This is not surprising. Despite an increase in revenues for fixed income currencies and commodities teams at investment banks this year, FX was still down by 6% year on year, according to research from Coalition. Rates and credit were the biggest gainers with 26% and 20% gains respectively.

What’s also strange is that equities traders managed to secure a pay rise at all. Cash equities revenues were down by 17% last year and equity derivatives slid by 26%. Nonetheless, a 5% pay rise was on the cards last year. Perhaps sales staff took the hit. Cash equities sales VPs suffered a 10% year-over-year decline in their compensation, earning between $350k and $550k last year, according to Options Group.

M&A banking VPs suffered a similar fate, with a 10% decline in pay from 2015 to 2016. Their total compensation ranges from $375k to $650k, per Options Group.

VP pay raises

Vice president-level traders on Wall Street specializing in the following six asset classes all got pay raises from 2015 to 2016. Here are the ranges of how much they got paid last year, including their base salary and recently announced bonus.

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Which banks will be hiring in which areas this year? Financial services recruiters suggest a patchy, reactive market, with banks hiring asymmetrically as they each pursue individual goals and fill gaps.

Most banks have provided a high-level overview of their recruitment priorities in 2017, either at the time of their fourth quarter results or during subsequent investor days. We summarize these below.

Bank of America:

Current number of job openings in London: 96

Most interesting contemporary opportunity: Associate in the scientific implementation group. – BofA wants someone to, ‘applying a systematic, quantitative, and scientifically informed thought process around execution, portfolio management, and risk management, with emphasis on the development of client solutions.’

Stated hiring priorities in 2017: This time last year, Bank of America was making cuts to its equities business. During 2016 as a whole, it cut global markets headcount by 7%. This year, BofA says it will, “continue to invest”, but doesn’t specify where.

Barclays:

Current number of job openings in London: 66 (At the corporate and investment bank, although most seem to be in the corporate bank.)

Most interesting contemporary opportunity: Senior modelling analyst in the consumer credit modeling team.

Stated hiring priorities in 2017: As per the strategy outlined by CEO Jes Staley, Barclays is now focusing on the UK and the US. Expect equities hiring at the British bank in 2017 – especially in London, where Staley says there is “room to grow.”

Citigroup:

Current number of job openings in London: 84

Most interesting contemporary opportunity: Equity electronic sales trader. Citi wants someone to help grow its electronic trading franchise in Europe by helping its clients choose the right trading strategies.

Stated hiring priorities in 2017: Citi says its “restructuring is over.” CEO Mike Corbat suggests we should expect further investments in equities and technology, so expect hiring here.

Credit Suisse:

Current number of job openings in London: 36

Most interesting contemporary opportunity: Head of Delta One Electronic Trading EMEA. Credit Suisse is looking for someone to head its EMEA electronic trading business.

Stated hiring priorities in 2017: Confusingly, Credit Suisse is cost cutting, but it’s also growing. At last year’s investor day it said it wants its markets business to achieve $6bn of revenues with $4.8bn of costs and $60bn of risk weighted assets. In 2016 these figures were $5.6bn, $5.3bn and $5.1bn respectively. In other words, therefore, Credit Suisse wants its markets business to generate higher revenues with lower costs but higher risk weighted assets. It’s expected to achieve this by ramping up its systematic trading unit, although it hasn’t said so explicitly. Senior M&A and capital markets hires are also likely in the U.S. and there are rumours that Credit Suisse is interested in rebuilding part of its macro trading capability in London.

Deutsche Bank:

Current number of job openings in London: 67

Most interesting contemporary opportunity: Change analyst, chief data office. Deutsche has got a ‘chief data office’ to inculcate the use of data across the bank. It’s up to the change analyst in this chief data office to alter people’s behaviours so that they get with the ‘data strategy.’

Stated hiring priorities in 2017: Deutsche Bank has promised to replace any fixed income staff who leave as a result of its non-existent bonuses. It also wants to Deutsche “deepen” relationships in M&A and ECM (suggesting it might hire some ‘rainmakers’), to recapture market share in equities and equity derivatives sales and trading, and to build contacts with the pensions and insurance industry in its rates business.

Goldman Sachs:

Current number of job openings in London: ~126

Most interesting contemporary opportunity: Desk analyst in the fixed income securities fundamental strats team. Goldman wants a quant to generate trade ideas in its fixed income business.

Stated hiring priorities in 2017: Goldman Sachs set out to cut $700m from costs last year and ended up cutting $900m. The bank has now finished cost cutting and is in a “position of strength” according to CFO Harvey Schwartz. Incoming CFO Marty Chavez says he will be all about “applying math and software to the problem of risk management.” Chavez has promised to increase the automation of investment banking tasks when he takes over in April. Expect quant and technology hiring above all else.

J.P. Morgan:

Current number of job openings in London: 219 (At the corporate and investment bank.)

Most interesting contemporary opportunity: Python/Java/C++ Algo Developer for equities in the central risk book. J.P. Morgan wants a programmer to develop algorithms that will trade the central risk book, possibly the most interesting trading desk in the whole bank. Headhunters say the central risk book is as close as you get to old-fashioned proprietary trading. Traders on the central risk desk monitor the positions of trading teams across a bank and try to ensure trades are placed and hedged efficiently. J.P. Morgan says tech knowledge is more important than finance knowledge for this role.

Stated hiring priorities in 2017: J.P. Morgan has finished cost cutting. At the bank’s recent investor day, CEO of the corporate and investment bank Daniel Pinto said the bank had been hiring data specialists, electronic trading specialists, and “senior bankers across products and geographies.” As J.P. Morgan prepares to make its Athena risk and pricing system accessible to clients, expect technology hires with data manipulation expertise. Pinto said the, “client’s user experience is key,” this year.

Morgan Stanley:

Current number of job openings in London: 190

Most interesting contemporary opportunity: Associate in the equity solutions group. Morgan Stanley is looking for a junior to help pitch its equity derivatives solutions to clients looking to raise money.

Stated hiring priorities in 2017: Morgan Stanley already made a few layoffs in its sales and trading business in 2017. This year, it plans to hire in equities trading, particularly in Asia, and to ‘deepen its bench’ in fixed income.

UBS:

Current number of job openings in London: 143

Most interesting contemporary opportunity: Group deferred compensation specialist. UBS wants someone to set the pay structure for its group.

Stated hiring priorities in 2017: In an interview with Business Insider, Andrea Orcel, CEO of UBS’s investment bank, said the bank is slowly adding senior investment bankers, “one at a time.” The Swiss bank is also growing its US equities business.

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““

John Macpherson’s final job in investment banking, as head of European head of listed derivatives at Citigroup in London, lasted around two months. He is, he says, the “guy you bring into grow a business” and Citi’s ambitions to expand did not match his own. He’s now landed in the most obvious place for someone looking for quick growth – fintech.

“I left Citi after a short period, for a number of reasons, primarily became it became quickly apparent that it was not the right atmosphere for my particular skills,” he said. “I became frustrated, and was carrying some emotional baggage from my time at Nomura. I thought ‘life’s too short’ and took some time to clear my mind and re-focus my career in a direction where my skills could be put to their maximum use.”

Macpherson had spent the previous two years as head of Nomura’s listed derivatives business globally and helped to build the team and grow revenues. But when Nomura closed its OTC clearing business in 2015, which supported the listed derivatives division, he decided to it was time move on to a firm that was expanding. Citi wooed him with the promise of building a listed derivatives business, but this never happened. After a year consulting and various non-executive director roles, he’s now CEO of fintech start-up BMLL, which he joined in November last year.

Macpherson isn’t exactly a take-it-easy type. He flies into business trips two days early over the weekend to make sure he’s prepared. His way of ‘unwinding’ is to train for and run ultra-marathons and he’s completed the Marathon Des Sables previously. The bulk of his career was spent as head of fixed income futures and options sales at Goldman Sachs in London. Macpherson says that he built Goldman’s London derivatives business from a $10m a year business in 2004 to a $100m business by 2009 and that it went from a bit player to the top listed derivatives house in the City. He says that his management style is to get stuck in as much as possible.

“I’m not a person to sit in the corner in a glass office and let the business chug along,” he says. “I helped build the futures business at Goldman into the biggest in EMEA and we replicated this across the U.S. and Asia. It was a trying period and everyone in the team had to stand up and be counted. This meant pulling a lot of 18-hour days to keep the business growing.”

To backtrack a little, Macpherson says that he never really expected to work at Goldman Sachs in the first place. After leaving the army, he ended up in the City in various sales and broking jobs before landing a big job at J.P. Morgan heading up its futures and options sales and execution team in Europe. When Goldman called him out of the blue, his first thought was that he wanted to see what was going on inside its Peterborough Court offices.

“When Goldman Sachs called me, I was flattered, as the bank was a mystery to me and many others. Unless you were part of the bank, you never knew what went on behind those doors,” he says.

He’s not a typical Goldman recruit. “I don’t have a degree, I went from school to the army and then into a financial sales job,” he says. “Most people at Goldman are recruited via the graduate training programme and then retained. Fewer people arrive with extensive experience from other firms.”

Macpherson spent over nine years at Goldman, but when the bank started making cutbacks rather than building the business, he got itchy feet.

“I ended up reporting to people who didn’t understand the secret sauce, which had to that point helped the listed derivative business grow,” he says. “They were trying to downsize the most successful team of its kind in London and, although I was appreciative of my time at Goldman, I equally realised that I wanted to build upon the best parts of what I had learned in a new endeavour with an aspirational firm.”

The new “aspirational firm” he’s looking to build is BMLL. It is using machine learning to tackle the vast amounts of data coming out of stock exchanges. It takes historical order book data from over 30 different trading and parse that into a common format that is more easily analysed by its clients. Then it uses Amazon Web Server to host that data and allows clients to rent it and analyse it in the manner appropriate to them.

Macpherson became CEO of BMLL, taking over from Johannes Sulzberger in November last year . He’s overseeing a period of expansion for the firm, which has been around since 2014 and been through various periods of fundraising. Earlier this year, it ran a proof of concept with the Bank of England’s fintech accelerator programme.

“At the exchange level, there’s petabytes of data being generated, but there’s no common format and indeed these formats regularly change over time,” says Macpherson. “With new legislation such as MiFID II and regAT an ever growing number of customer types are required to access this data, but they also need to parse it and convert it into a format they can actively use.”

BMLL is one of a growing number of fintech firms using AI to crunch data for hedge fund clients, but Macpherson says that the types of customers who use its service is broad. “There are different client types the product can appeal to – compliance departments, regulators, quant hedge funds, brokerages, investment banks, high frequency trading firms and long-only asset managers,” he says. “BMLL provides a cloud based platform to provision API access to full depth limit order book data coupled with distributed machine learning. Our APIs enable end users to quickly and efficiently address research problems in this data, such as anomaly detection.”

BMLL is targeting financial services organisations. However, it has not tapped industry expertise to build the product.“We currently have 27 scientists based next to Google’s headquarters in central London, many of which has been poached from the research labs of world-leading universities,” he says. “In addition to that we have a number of smaller teams based overseas. Due to the scale of the demand we are seeing we are aggressively hiring – conditional on funding by the end of the year we expect to hit 50 staff.”

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Contact: pclarke@efinancialcareers.com

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““

Going it alone is the new thing for senior investment bankers. Maybe they’re trying to emulate Simon Robey and Simon Warshaw by eating up bulge bracket banks’ market share, but setting up a boutique advisory firm is increasingly common.

The latest M&A banker to draw on decades of investment banking experience to launch a boutique is Mike Beadle, a managing director within Barclays’ UK investment banking team in London. Beadle left Barclays in February and has now started his own advisory firm, Kinnerton Capital.

Beadle joined Barclays in August 2007, so was with the UK bank for almost ten years before his departure. Before this, he was an assistant director at Rothschild.

Kinnerton Capital will help companies solve financing and treasury issues. Beadle’s experience has focused on debt capital markets deals including leveraged finance, project finance and convertible bonds.

Beadle is the latest senior banker to cut ties with big investment banks and go it alone. Peter Bell, the former head of UK M&A at Bank of America Merrill Lynch, launched his own corporate finance boutique Cardean Bell in November, while Peter Bacchus, the joint head of investment banking and global head of metals and mining at Jefferies, is launching Bacchus Capital Advisors.

In the U.S., Andrew Kass, who was a managing director in Deutsche’s internet investment banking team based in San Francisco and New York, left the bank in December and has just launched a boutique advisory firm called Blackwatch Advisors.

At the even more senior end, Lars Andersson, the vice chairman of investment banking at Morgan Stanley in New York, left in November and is reportedly launching a boutique focused on life sciences and technology.

Follow @paultclarke

Contact: pclarke@efinancialcareers.com

Photo: Getty Images

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