How Credit Suisse is changing who it hires because of artificial intelligence

November 7, 2017, 7:07 am

≫ Next: I have a comfy life at J.P. Morgan’s CIB working around 35 hours a week

≪ Previous: Credit hiring continues as Deutsche recruits from Moore, Nomura from Citi

The surge in demand for data science specialists seems a little like putting old wine in a new bottle. After all, both buy-side firms and investment banks have long used structured datasets to inform their investment decisions, so why the sudden surge in demand for seemingly unobtainable talent?

In a nutshell, artificial intelligence and machine learning are changing everything.

“On the sell side, applications of AI include everything from client acquisition and research to trading to operations to controls and compliance,” said Nikhil Singhvi, the global head of market and client connectivity at Credit Suisse at the Tabb Group Fintech Festival in New York last week. “Each of these has different use cases and different levels of adoption.”

When it comes to using AI for investment decisions, investment banks now have a disadvantage, he says. Bulge brackets used to be able to bet their own money through large prop trading desks, which also served as an in-house guinea pig for trying out new ideas. Regulatory crackdowns on banks’ prop trading desks after the financial crisis means this is no longer an option.

“With a lot of prop trading going away from the sell side, you have to do more and more testing, whereas in the olden days, when there were prop traders sitting beside you, you could work with them to test the strategies,” he said. “Now you have to do many simulations before people are comfortable and you can put it into production, and there are cost pressures.”

More to the point, Credit Suisse is changing the type of people it needs to hire, he said.

“We’ve changed our thinking from a regular stat-based quant to machine learning, which is a big change, and the challenge of finding [and hiring candidates with] the right skill set is a big issue.”

While unstructured data is increasingly in demand, Credit Suisse typically partners with providers who convert data sets from unstructured to structured, rather than bring people in-house to do such tasks.

“From a company’s perspective, how do we want to use this data, and what are the use cases? You still need to be able to make sense of it and read where the signals are pointing,” Singhvi said. “The capacity to be able to build the model – that’s where you need a lot of that data.

“If you don’t have the [cognitive-computing] hardware, then it is difficult to achieve within the bank’s infrastructure,” he said. “You have to push the boundaries with your infrastructure and architecture teams. It requires a combination of the public cloud and a private cloud and a continuous push within the organization to make it happen.”

Follow @danbutchrwrites

Photo credit: gorodenkoff/GettyImages
““

↧

I have a comfy life at J.P. Morgan’s CIB working around 35 hours a week

November 7, 2017, 7:26 am

≫ Next: The real lure at European banks on Wall Street: the massive salaries

≪ Previous: How Credit Suisse is changing who it hires because of artificial intelligence

I’m writing this for everyone at J.P. Morgan in London and New York City. I’d just like to say that I work for J.P. Morgan too and life is good. I don’t do your hours and I’m not badly paid.

I’m a developer in the Glasgow office. You may even know me: I’ve worked on products that have been rolled out across J.P. globally; I’ve been on plenty of calls.

J.P. Morgan in Glasgow is a comfy kind of place. I’ve seen what things are like in Canary Wharf. Here in Glasgow, life is a lot less stressful.

Working for J.P. Morgan in Glasgow is like working for a tech firm. There are no business functions up here and there are no teams aligned to demanding trading desks. We get to work at our own pace. The environment and the culture are less finance and more tech.

Banks are known for working people hard – even in technology, but the hours at J.P. in Glasgow are short. My contract only stipulates a 35 hour working week. Admittedly, I often do a bit more than that – but not that much more. There’s not the expectation that you’re going to work super long hours here. Sometimes I work a bit longer if I want to make progress, sometimes I go home early to catch a delivery or go to the gym. No one really checks up on me – it’s up to us to manager ourselves, as long as we’re productive it’s fine.

Of course, there are caveats. I’m paid less than in London. Just look at Glassdoor – it’ll tell you that the average software developer’s salary here is £34k ($45k). In London, it’s £60k. But then you can rent an amazing apartment in a good area of Glasgow for a fraction of the cost in London, so your money goes a lot further.

J.P. Morgan’s Glasgow office is also a big place. There are more than a thousand people working here. It could just be that I’m lucky: other teams might be less comfortable places to work. – But I don’t think so.

The real issue with J.P.M. in Glasgow, though, is promotion. Promotional prospects are ok here until you hit vice president (VP) level. Once you’re a VP, you’re pretty much stuck. It’s very difficult to get any higher than VP if you’re in the Glasgow office. If you want to make MD, you need to move to London. And this is where your problems will begin. The quality of developers in London seems to be much higher than in Glasgow and people there are used to a different pace of work. Most of the top developers here eventually transfer to London, but it can be hard to make it work.

Even so, Glasgow has been good for me. I wanted work life balance and I’ve had it. I expect to move to London eventually – who doesn’t? Until then, I’m just enjoying the pace of life.

Matthew Brown is the pseudonym of a developer in J.P. Morgan’s Glasgow office. This subjective piece reflects his opinion and is not a representation of the opinion of eFinancialCareers.

Follow @MadameButcher
Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com

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

““

↧

The real lure at European banks on Wall Street: the massive salaries

November 7, 2017, 10:09 am

≫ Next: Fussy clients, product pressure, stressful deals: my life as a Singapore corporate banker

≪ Previous: I have a comfy life at J.P. Morgan’s CIB working around 35 hours a week

European banks are hiring feverishly on Wall Street. McKinsey & Co is reportedly advising Deutsche Bank CEO John Cryan that the U.S. is the market to conquer. Barclays is busy pursuing its aim of becoming the preeminent transatlantic bank. Credit Suisse just got itself a head of U.S. equities trading from UBS and BNP Paribas has hired a new head of global markets institutional sales for the Americas. Hiring is on, and the Europeans are not holding back.

Bloomberg reported yesterday that European banks are luring Wall Street talent with hefty pay packages beyond those on offer at rival U.S. firms. “They’re playing catch-up,” said Jason Kennedy, CEO of Kennedy Group in London. Mike Karp CEO of the Options Group, said the Europeans are offering guaranteed bonus packages that make their total compensation 30% higher than U.S. rivals’.

However, other headhunters in NYC say the focus on bonuses and guaranteed compensation misses the point: what differentiates European Union-based banks on Wall Street isn’t the guaranteed bonuses but the salaries. The salaries are huge.

Huge salaries are said by headhunters to be particularly in evidence at Deutsche Bank’s U.S. operation. Deutsche Bank first hiked salaries in its investment bank in 2014. It hiked them again for juniors in 2015. And it hiked them again under John Cryan in January 2016. The increases applied to all regulated staff, which at Deutsche Bank now means everyone above vice president (VP) level.

As a result, Wall Street headhunters say Deutsche Bank’s salaries are now considerably out of kilter with the rest. “If Bank of America Merrill Lynch is hiring a managing director on $2m total comp, they’ll pay a salary of $450k plus a bonus of $1.55m,” says one headhunter with DB as a client. “At Deutsche Bank the salary will be $700k and the maximum bonus will be twice that at $1.4m.”

The cause of the discrepancy is the European Union’s bonus cap, introduced in January 2014. The cap forbids banks from paying bonuses greater than twice salaries for all regulated staff. Despite banks’ efforts to prevent the rules applying outside the EU, they also extend to their operations in the U.S. and on Wall Street.

Deutsche isn’t the only bank afflicted by the cap: Barclays, BNP Paribas and SocGen are under it too. However, headhunters say Barclays’ salaries are less out of line than Deutsche’s, possibly because the bank opted to pay large role-related allowances instead of increasing salaries when the bonus rules were introduced. Meanwhile, the EU has banned its banks from paying ‘hard’ guaranteed bonuses (but permits guarantees which are linked to targets and are a range instead of a hard figure) in all but exceptional circumstances. Deutsche – for example – only paid guarantees to 25 people last year.

Deutsche’s enormous salaries risk causing a headache if its Wall Street revenues don’t increase quickly. While U.S. banks are still operating a variable pay model, Deutsche is ramping up fixed costs every time it recruits. This is an issue given that Deutsche’s investment bank already has one of the highest cost ratios in the sector. With compensation typically eating up 40% or less of revenues at banks now, the BAML trader in the example above needs to generate $1.2m to cover his or her compensation costs. The trader at Deutsche needs to generate $1.8m.

Follow @MadameButcher
Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com

“”

Photo credit: IMG_0135 by Ilkka Jukarainen is licensed under CC BY 2.0.

↧

Fussy clients, product pressure, stressful deals: my life as a Singapore corporate banker

November 7, 2017, 10:39 am

≫ Next: Grads who could “build a start-up in their bedroom” wanted at BNP Paribas Hong Kong

≪ Previous: The real lure at European banks on Wall Street: the massive salaries

Last year I wrote a blog about the positive aspects of my job as a corporate banker at a big European bank in Singapore. The daily discussions with product teams, the early-career interaction with clients, and the lack of pitch books – these are all massive upsides to my role. And most days I do genuinely enjoy turning up for work.

But I hope I didn’t give the impression that my job is straightforward and relaxing – it can actually be quite the reverse. The role comes with its unique set of pressures.

The corporate banking market is very competitive in Singapore and if you make a serious mistake when handling a client, the word gets around our small country pretty quickly. Relationship managers at rival banks will soon make a play for that client, and other clients may also become aware of what you did. This hasn’t happened to me – but it certainly could if I’m not careful.

For example, I have a particularly annoying client who’s overly fussy and relentlessly negative. But in a job like mine, I simply can’t afford to upset him –- losing my temper means I risk losing a key client. If I were an investment banker perhaps I could be slightly more upfront with him because I’d just need to get the deal done and then move on. But I have to keep him happy month upon month, which heaps pressure on me and requires plenty of patience and tolerance.

As a young RM in corporate banking, my soft skills are constantly tested to the limit. For example, I’m increasingly having difficult conversations around compliance issues – often with new clients that I barely know. I can assure you that, especially as a junior, it isn’t easy to broach the subject of whether someone is doing business in Syria or another blacklisted country. I often need to be very tactical and sensitive in order to get compliance-related answers from clients without offending them and potentially damaging the relationship.

Other difficult situations sometimes crop up out of the blue. For example, I now have two corporate clients that are merging with each other, so I have to be very careful about what I communicate to each one to avoid compromising the deal.

As a corporate banker you must always be mindful of what to say and what not to say – even in social situations. Don’t slip up by inadvertently sharing confidential information over lunch. And even if you manage not to offend any clients along the way, you will also need to turn the product ideas you suggest to them into concrete solutions that deliver benefits to their businesses.

It’s sounds (and often is) stressful, but you will ultimately be judged on how many client conversations you convert into solutions. The higher your ratio, the more you will stand out as a banker in this cutthroat market in Singapore.

It takes at least two years to establish a trusting relationship with a corporate client. But if you keep on solving their problems, that trust will come – even if you’re much younger than them.

Another challenging aspect of corporate banking is the need to constantly ask yourself questions. You can’t just take clients at face value, you need to ask, for example: why have they made that business decision? Why were they behaving in that way during the meeting? Why did they say that about the product?

To make sure you can answer these questions as a junior RM, ideally get a job where you’re thrown into the deep end and have your own clients, but also where you spend some of your time shadowing senior bankers with their larger clients. Whenever you meet clients with a director or MD, make sure you pick their brains after the meeting about the client – they will have behavioural insights that you didn’t pick up.

If you don’t ask the senior bankers questions, you won’t progress your relationships, your career will stall, and the pressure will mount.

Lucy Ng (we have used a pseudonym to protect her identity) is a corporate banker at a major European bank in Singapore.

Image credit: baona, Getty

““

↧

Grads who could “build a start-up in their bedroom” wanted at BNP Paribas Hong Kong

November 7, 2017, 10:41 am

≫ Next: Morning Coffee: How to infiltrate Bridgewater’s “circle of trust”. The new upside to equity research

≪ Previous: Fussy clients, product pressure, stressful deals: my life as a Singapore corporate banker

Banks in Hong Kong and Singapore are ramping up their hiring of technologists with artificial intelligence skills, but are inevitably encountering a lack of candidates who have AI experience.

BNP Paribas, though, is trying to grow its own AI talent from scratch in Asia. As part of its 2018 APAC graduate training programme, the French firm is now offering Hong Kong-based AI-focused analyst jobs.

“We’ve been training digital and tech grads for a while, but this is the first time we’re hiring grads specifically in AI development in APAC,” says Jeffrey Ng, head of fast IT in BNP’s digital and innovation office in Hong Kong, without providing a headcount number.

The new hiring drive, however, puts BNP in competition with big technology companies and start-ups, which are also recruiting grads for AI roles. “It can be challenging to find grads here because traditionally Hong Kong was a sales centre for tech companies, not a development hub, so technology hasn’t been such a popular choice at university,” he says. “But that’s now changing.”

Tech giants like Google and Alibaba also have a slightly different focus to their AI hiring, adds Ng. “A lot of their university recruits have got PhDs and are already cutting-edge AI experts. Their main emphasis is on a single technology skill area, whereas we want grads to have broader technical skills and also have business acumen – people who might otherwise be trying to build a start-up in their bedroom.”

AI experts in banking cannot just be “brilliant programmers”; they must understand customer problems and come up with “real-life business solutions”, says Ng. This demands a trait often absent from both junior and senior technologists: a genuine passion for the finance industry.

BNP looks favourably on applicants who have passed (or nearly passed) any level of the CFA and who have taken part in a trading or business-plan competition related to digital or AI. Those who make the cut complete a 12-month AI-focused rotation across different business units and are then assigned a team to work in full time

“When building AI, we expect our grads to become domain experts in the bank’s functional areas too,” says Ng. “We want them to learn the banking business, and enjoy working in banking.”

Grads must obviously also possess a wide range of technology skills, although some of them could come from online courses as well as their degrees. A qualification in AI or a big data engine (such as NoSQL) is a plus, as is knowledge of Python, C++, or Javascript. An understanding of blockchain ledgers (i.e Corda or Hyperledger) and programming libraries (i.e. TensorFlow, Node.js, OpenCV, NLTK) is also desirable. The list goes on.

Ng says the new recruits won’t just be supporting the experienced techies; they will be working on delivering in-house AI prototypes, proof of concepts and minimal viable products.

“A lot of banks focus their AI development on securities trading and retail banking. I want to go wider,” says Ng. “In wholesale banking, for example, there are legal and trade issues, such as document extraction, that it can help with. AI can apply to any domain in banking and tackle issues ranging from extracting useful information via linguistic processing, to onboarding, to making better use of data to understand client needs.”

Won’t AI ultimately spell the end for some banking jobs, especially those in operations? “Technology is there to make people’s lives more efficient and better. Inevitably, there will be some impact on how people work in banking and some staff may need to upskill in the future,” says Ng. “However, the net effect of AI in banking will be to make jobs more interesting by cutting out some of the repetitive and simple manual processing. Young people increasingly don’t won’t to go into mundane banking jobs, so AI will make careers in the industry more attractive.”

Follow @simonmortlock

Image credit: BONNINSTUDIO, Getty

““

↧

Morning Coffee: How to infiltrate Bridgewater’s “circle of trust”. The new upside to equity research

November 7, 2017, 2:46 pm

≫ Next: Why this ex-Morgan Stanley commodities chief is tapping bankers for the “Goldman Sachs of P2P”

≪ Previous: Grads who could “build a start-up in their bedroom” wanted at BNP Paribas Hong Kong

If you’ve ever wondered what the downside is to earning big bucks at a hedge fund, look no further than non-compete agreements. Imagine signing up to a job only to be told that a condition of your continued employment is saying ‘no problem’ to the prospect of staying away from working for a competitor for two years after you decide to leave your current company.

Non-competes are ubiquitous among senior investment professionals on the buy-side. Citadel ties some staff into two-year non-competes, while Brevan Howard star trader Chris Rokos contested a five-year non-compete deal in order to launch his own hedge fund, Rokos Capital Management, in 2015. Bridgewater Associates, the world’s biggest hedge fund, goes one step further.

Greg Jensen, the former co-chief executive of the firm, current co-chief investment officer and long-time protege of Bridgewater founder Ray Dalio, has not had a good day. The WSJ has published details of an alleged groping incident at the firm involving Jensen and a reported $1m settlement with a female employee of the firm he had a consensual relationship with. Putting these aside for a moment, the Journal article also highlights another important detail – the necessary sacrifices to be accepted into the ‘inner circle’ at Bridgewater.

Jensen joined Bridgewater as an intern after graduating from Dartmouth College in 1996. Since moving up the ranks, he has, according to the WSJ, signed a non-compete agreement for his entire life. The upside? Jensen has been accepted into the “circle of trust” – yes, like Meet the Parents – a select group comprising around 12 employees who are given full knowledge of Bridgewater’s investment process. Still, should Jensen decide to leave, it’s unlikely he’ll be found wanting – aside from a long period of gardening leave, he has made $1.7bn in compensation over the past five years, according to estimates from researcher Institutional Investor’s Alpha.

Separately, while MiFID II doesn’t have many fans in investment banks, there’s one potential benefit to unbundling the costs of equity research from other trading charges – that research will get better if clients are paying directly for it, and the role of the analyst will gain some integrity again. Philip Augar, former City worker and a historian of London’s financial district, writes in the FT that the regulation will make equity research teams smaller, but “could complete the post-Spitzer rehabilitation of sellside research as a reputable occupation”. Research will be driven by market forces, which means it has to add value to those paying for it, rather than serve the interests of the companies the analysts are writing about. “All of this has the potential to restore prestige and status to a profession that long ago lost integrity and a clear sense of purpose,” he wrote.

Meanwhile:

Screen Shot 2017-11-07 at 14.06.11

Deutsche Bank isn’t just hiring for its trading floor. It’s also brought in 24 managing directors and directors within leveraged finance. (Bloomberg)

Meet Stephanie Cohen, the new person implementing Goldman Sachs’ $5bn plan to bolster its investment bank (WSJ)

Goldman Sachs had zero days in the third quarter where its trading team made more than $100m. This is a problem (Gadfly)

Craig Broderick. Goldman’s chief risk officer who worked at the bank for 32 years, is retiring (Reuters)

Forget the rhetoric – investment banks are saying in private that the lack of progress on Brexit will force thousands of jobs out of London (Financial Times)

Inside the slick new hedge fund offices designed to target techies (WSJ)

The perils of being a whistleblower (Financial Times)

Don’t believe everything you read about Brexit and banking jobs (CityAM)

Innovate Finance, the fintech lobby group set up by former UK chancellor George Osbourne, has been leaking staff (Financial News)

European cities are targeting lucrative corporate legal work from London (Bloomberg)

British people are happier after Brexit (Bloomberg)

The secret to dealing with manipulative colleagues (HBR)

Why the email prankster is calling it a day (Buzzfeed)

Follow @paultclarke

Contact: pclarke@efinancialcareers.com

↧

Why this ex-Morgan Stanley commodities chief is tapping bankers for the “Goldman Sachs of P2P”

November 8, 2017, 2:38 am

≫ Next: Firing (and hiring) plans by bank in the final months of 2017

≪ Previous: Morning Coffee: How to infiltrate Bridgewater’s “circle of trust”. The new upside to equity research

If you’re a senior banker or hedge fund manager looking for a place to invest your spare cash, Yann Murciano, the former head of base metals trading at Morgan Stanley, believes he can help out.

Since leaving Morgan Stanley last year, Murciano has quietly been running Blend Network, a fintech start-up and peer-to-peer lender that he says – ambitiously and as a slight to his former employer – he wants to turn into the “Goldman Sachs of P2P”.

On the face of it, as a P2P lender, the Blend Network is not an original idea for a fintech firm. It lends money to companies and individuals who are struggling for finance from traditional bank lenders, at a rate of 8-15%, from a pool of investors. But around two-thirds of the people lending the money are City workers.

“We have a lot of bankers and hedge fund guys lending on our platform. It’s rare in the current climate that you can find an investment with low volatility that returns more than 10%,” says Murciano.

Murciano was head of base metals trading at Morgan Stanley until his exit in June last year. He worked at the firm for ten years, having joined in 2006 from ABN Amro where he traded FX options. He is one of a number of senior Morgan Stanley commodities staff to leave over the past 18 months as the bank retreated from the asset class. Others include Amrik Sandhu, its EMEA head of commodities, who left to found his own commodities trading and advisory firm, InsideOut Advisors and Peter Sherk, the former co-head of commodities at Morgan Stanley, who is now CEO for North America at energy trader Mercuria.

“As a trader, I started out in FX options then moved to precious metals which was a less mature market at the time. A lot of FX traders did the same move. Precious metals options became more mature, I then moved to base metals. I was always looking for less efficient markets. I believe they offer more opportunities to traders,” says Murciano.

“This was ten years, ago, and commodities is clearly not a safe place to be. Right now, I believe that fintech is the new bull market.”

Murciano says that thing that sets Blend Network apart from other P2P lenders is his extensive investment experience and the fact that he has a wealth of City contacts willing to invest their money. He also has Ivor Freedman, a 76-year-old former retail banker, on board to who do the more “boring” side of organising loans. The firm employs seven people.

Murciano says the biggest adjustment has been the change of pace. “When you work on the trading floor, you’re used to people responding to your emails within two minutes. Working for a start-up in the retail space is a bit of a culture shock.”

Follow @paultclarke

Have a tip, story or comment? Contact: pclarke@efinancialcareers.com

Photo: Getty Images

““

↧

Firing (and hiring) plans by bank in the final months of 2017

November 8, 2017, 4:37 am

≫ Next: Ex-Barclays non-core MD joins former colleagues at restructuring boutique

≪ Previous: Why this ex-Morgan Stanley commodities chief is tapping bankers for the “Goldman Sachs of P2P”

As the nights get longer and the days get shorter and bonuses loom into view like a giant pile of restricted stock on the horizon, banks have a tendency to stop hiring and to start firing. Will this year be any different? As we reported yesterday, there’s still plenty of recruitment on credit trading desks. Is this a sign that 2017 is bucking the trend?

No.

Banks still have firing plans this year. Between now and January any hiring is likely to be minimal, but can’t be ruled out all together – when you have strategic roles to fill, it can make sense to bring people in before the post-bonus hiring rush in the new year.

Bank by bank, here’s what to expect in the dog days of 2017 and the start of next year.

Bank of America: Massive spending on (and likely hiring in) technology. Needs to get rid of some more traders

Bank of America’s investment bankers working on M&A and capital markets deals have been doing well this year. Its salespeople and traders have not.

In the call accompanying BofA’s third quarter results, CEO Brian Moynihan boasted that the bank has cut costs equivalent to the entire “cost structure” of Merrill Lynch since it acquired the Merrill in 2008. As BofA invests in technology, including artificial intelligence, it’s working to keep costs stable. Across the bank, BofA spent a huge $2.5bn on technology this year. CFO Paul Donofrio noted that savings which have been made in the banking (IBD) division have been offset by technology investments, and that BofA has been upgrading rather than making net new headcount additions.

Bank of America laid off around ten traders in September 2017. However, it could benefit from making more cuts to its markets division, where costs were 77% of revenues in the first nine months of this year, versus 65% in global banking and around 60% across the bank as a whole. Neither Moynihan nor Donofrio gave any indication that cuts are coming, however.

Barclays: No redundancies planned, ongoing hiring across technology and sales and trading (especially cash equities and electronic)

Barclays has been one of this year’s biggest hirers. In the ten months to October, it recruited 21 managing directors, two thirds of whom went into the markets division. Tim Throsby’s presentation in September suggests it hasn’t stopped hiring yet.

Throsby said Barclays wants to “restore excellence” in electronic trading, to “regain a leading position” in FX and rates, and to pursue “targeted growth” in equities, prime services and credit. The implication is that Barclays could hire further in all these areas, although it may not do so this year. In the call accompanying the bank’s third quarter results, CEO Jes Staley also said Barclays has been over-reliant on flow equity derivatives, whilst neglecting cash equities and that it intends to remedy this. Separately, Staley said that Barclays has “under-invested” in technology and will make amends for this too.

While Barclays is hiring, it says it won’t be firing. Despite a cost ratio of 74% in its investment bank in the third quarter (up from 68% a year earlier), it insists restructuring is over. “You cannot cut yourself to glory and those that try will ultimately fail,” said Staley. Instead of cutting heads, Barclays is cutting bonuses.

BNP Paribas: Still pursuing ~5% compound annual revenue growth in its global markets business. Has a further €100m of costs to take out of its corporate and investment bank before the end of the year

BNP Paribas has been hiring in 2017. The French bank has a 5% annual growth target for its global markets business between now and 2020 and has been recruiting in fixed income. Most recently, it recruited Deutsche Bank’s former head of inflation trading. It’s also added in credit and emerging markets.

BNP’s new recruits look more like upgrades than net headcount additions, however. Whilst bringing new people in, it has also been letting existing people go, the most recent exit being Simon Birch, the former head of emerging markets fixed income trading, who left last month.

For a bank that prides itself on its cost efficiency, BNP’s global markets division is starting to look a bit flabby. In the third quarter, costs rose to 77% of revenues, up from 71% a year earlier.

Fortunately, therefore, BNP is in the process of a cost cutting programme. In its third quarter presentation, it said it has around €200m of costs to cut before the year is over, half of which are likely to be extracted from the investment bank. Fixed income traders should probably be worried.

Credit Suisse: Continued cost squeeze focused on contractors. Equities hiring is over, but hiring (seemingly) continues in compliance

Credit Suisse wants to keep costs in its global markets division below CHF4.8bn this year – a reduction of 11% on 2016 and 45% (yes!) on 2015. It’s on track to do this. In the first nine months of the year, global markets costs were CHF3.7bn, implying that Credit Suisse can spend CHF1.1bn in Q4 2017, down only slightly on the CHF1.3bn it spent during the same period last year.

Despite cutting costs viciously, Credit Suisse has been expanding headcount. In October 2017 it had 80 more people in global markets than in October 2016, and 350 more people in the investment banking division. It also had 750 more people across all business in Asia Pacific.

How can CS cut costs and hire? Simple: its cost cutting focus is contractors and consultants. In the year to October, 3,050 contractors and consultants were let go. As one Credit Suisse contractor pointed out this week, this is causing consternation among contractors still at the bank, who claim it’s cutting too deeply and that working there has become a misery.

While Credit Suisse is cutting contractors, its hires in global markets have been particularly focused on equities, where it’s been hiring heavily from UBS. However, in last week’s analyst call CEO Tidjane Thiam said the bank’s equities hiring is over and that CS is now waiting for revenues to come through in the next 18 to 24 months.

Separately, Thiam said Credit Suisse has been hiring for a new “compliance lab” which houses 18 PhDs and 54 people with masters qualifications. This appears to be the new, new thing at CS, and hiring there may well continue.

Citi: Gaps to fill in credit trading, still building in equities. No mention of cost cutting

Citi’s institutional clients group (its investment bank) has had an exceptional year and outperformed all its rivals. The bank has spent the last few years bolstering its equities trading business and in Citi’s third quarter investor call CFO John Gerspach said he was pleased with its progress and with the 30% combined revenue uplift between equities trading and equity capital markets compared to the previous year. Unlike Thiam at Credit Suisse, however, Gerspach didn’t say equities hiring at Citi is now over.

Gerspach also didn’t say that Citi is hiring in credit. However, as we reported yesterday, Citi has gaps to fill because its senior credit traders are defecting to Nomura.

There was no mention of cost cutting in the bank’s third quarter presentation, even though Citi said previously that it wants to shave 70 basis points off expenses in the investment bank by moving staff to low cost locations. At 67% of revenues in the first nine months of the year, costs in Citi’s institutional clients group were some of the lowest in the market.

Deutsche Bank: Cuts likely in support functions. Hiring likely in the U.S.

Deutsche Bank has a cost problem. In the third quarter of 2017, costs ate 87% of revenues in its investment bank, up from 74% a year earlier. And things threaten to get worse.

As Deutsche CFO James Von Moltke pointed out in the bank’s third quarter call, Deutsche has committed to actually paying bonuses this year, meaning that compensation costs will rise in the fourth quarter compared to 2016 (when it didn’t).

Naturally, there is a way around this, and that is to cut heads and pay those who remain. This is almost certainly what Deutsche will do. The bank already says it’s made cuts from its fixed income sales and trading staff and CEO John Cryan said today that Deutsche employs far too many people. Deutsche’s overall headcount of 97,000 could be halved by technology, said Cryan, adding that the bank has too many people in back office functions compared to front office functions. Following earlier suggestions by Cryan that Deutsche employs a lot of accountants who are performing the tasks of an abacus, the implication is that Deutsche is going to do something harsh with people working in support roles. This is unlikely to happen before Christmas. however.

While Deutsche is culling its middle and back office staff and replacing them with automated systems, it’s likely to add front office staff in the U.S. Cryan has reportedly called in McKinsey & Co. to help him turn the bank around and McKinsey and Co. say conquering the U.S. market will solve all Deutsche’s problems.

Goldman Sachs: Hiring ‘coverage and distribution staff’. Quietly culling some U.S. equity derivatives traders

Goldman Sachs has got big expansion plans. Outlined by COO Harvey Schwartz in September, these plans involve chasing $5bn+ in revenues over the next three years, split between fixed income currencies and commodities ($1bn+), lending and financing and Marcus ($2bn), investment banking and coverage ($0.5bn) investment management ($1bn) and equities ($0.5bn).

To this end, the firm is hiring. Most importantly, it’s hiring “laterally” as it brings in experienced people from rival banks. In the bank’s third quarter call, CFO Harvey Schwartz said Goldman has doubled its lateral hiring this year compared to last and that the hires are weighted to “sales distribution” after the bank said it wanted to increase its penetration of corporate clients. Many of Goldman’s hires have been at executive director and managing director level. After culling 30% of its credit sales and trading professionals between 2012 and 2017, Goldman has a particular need to hire in flow credit.

As Goldman goes for growth, no mention was made of cost cutting. This doesn’t mean it’s not happening. Fox Business reported this week that the bank is quietly pulling out of listed equity derivatives trading in the U.S.

J.P. Morgan: No mention of hiring, no mention of firing, but firing would be beneficial. Machine learning specialists welcome

Cost cutting is supposed to be over at J.P. Morgan. Investment bank CEO Daniel Pinto said as much earlier this year.

However, J.P. Morgan’s sales and trading business didn’t do well in the third quarter and the bank may well be tempted to take costs out before December – particularly as CFO Marianne Lake warned that fourth quarter sales and trading revenues are also likely to be down on last year.

J.P. Morgan is working hard to automate as much of its investment bank as possible. The bank as a whole already spends $9.5bn on technology and one of Pinto’s insiders is David Hudson, the head of markets execution who says the bank has done too much to protect employees in the past. Last month, Pinto promoted Samik Chandarana, a former credit trader and J.P. Morgan veteran, to the role of developing the bank’s data and machine learning strategies. This follows the success of David Fellah, a member of J.P. Morgan’s European equity quant research team, who developed LOXM, J.P. Morgan’s new self-teaching trading algorithm, which can execute large and complex equities trades.

Morgan Stanley: Investment in technology. No cuts planned

Morgan Stanley has no need of making cuts to its ‘institutional business.’ CEO James Gorman says the bank’s 72% efficiency ratio is below its 74% target and that its “project streamline” expense savings are coming to fruition.

Morgan Stanley hasn’t been a big hirer this year. However, Gorman suggested things may have been happening behind the scenes. Morgan Stanley is “driving electronic transformation” in its investment bank, said Gorman and building a platform that will last for the next decade. Expect technology hiring then.

UBS: No cuts coming. Ominous things have been said about automation and hiring in technology

UBS has also finished cutting heads in its investment bank for the moment. Andrea Orcel said as much earlier this year and UBS added 81 people in its investment bank (many of whom are likely to have been recent graduates) in the third quarter. of 2017. In the same period, costs consumed 85% of revenues in the investment bank, down from 91% a year earlier.

Even so, UBS could potentially benefit from taking some more costs out of its investment bank, where its cost ratio remains high relative to rivals.

Ultimately, this is likely to happen through automation. UBS CEO Sergio Ermotti has said that 30% of jobs at the bank could go in the next decade due to automation. Another UBS executive told Bloomberg it’s more like 40% in as little as four years.

Accordingly, UBS used its third quarter presentation to say that it has increased its spending on regulation and technology in the investment bank by 8% in the past year. As at other banks, technologists and compliance professionals (especially technologists working on compliance technology) are the people of the moment.

Follow @MadameButcher
Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com

““

↧

Ex-Barclays non-core MD joins former colleagues at restructuring boutique

November 8, 2017, 6:09 am

≫ Next: What to do now if you want a new job when your bonus lands

≪ Previous: Firing (and hiring) plans by bank in the final months of 2017

A former managing director within Barclays non-core investment bank signed up to a boutique that advises financial services on how to sell divisions that are not central to their business.

Giles Godfrey, the former head of non-traded assets within Barclays non-core unit, has joined Palio Financial alongside two other former big-hitting bankers. He is a senior advisor to the firm, according to his public profile, and joins founders Peter Meijer, a former J.P. Morgan banker who left his MD role at Moelis & Company to start the company last November, and ex-Barclays managing director Geoff Smailes.

Palio Financial was set up to advise financial institutions on the disposal of non-core assets and other strategic work, according to an interview with Meijer on Financial News last year. Meijer has a background in restructuring, having worked on portfolio disposals and other restructuring work at Moelis, while Smailes was head of global markets structuring and legacy credit asset trading at Barclays when he left in 2015.

Godfrey joined Barclays in 2008 as a credit trader and left his role in September last year. Barclays non-core unit was a massive undertaking established in 2014 to remove $110bn worth of risk weighted assets from its balance sheet – or around 25% of the total at the time. The bulk (£90bn) were set to be stripped out of the investment bank in areas including non-standard FICC derivatives and some commodities and emerging-markets products.

Godfrey and Smailes have worked together both during their time at Barclays, and at Solent Capital, a hedge fund set up by Smailes where Godfrey worked as a credit trader for four years.

Follow @paultclarke

Have a tip, story or comment? Contact: pclarke@efinancialcareers.com

Photo: Getty Images

““

↧

What to do now if you want a new job when your bonus lands

November 8, 2017, 6:23 am

≫ Next: “Sexual harassment is horrific in the financial recruitment industry”

≪ Previous: Ex-Barclays non-core MD joins former colleagues at restructuring boutique

Don’t assume because few people move jobs at the end of the year that now is the time to sit pretty where you are. In fact, the tail end of 2017 is the perfect time to start looking for a new role, particularly if you want to leave shortly after the bonus check hits in January or February.

“Historically, on average a role takes six-to-eight weeks to fill from the time that it’s open and posted to the time that the person joins, so if you start a search now you might not actually start working there until February or March anyway,” says Laura Mazzullo, the founder of recruitment firm East Side Staffing.

Now is the time to start looking. What can you do?

Update and edit your resume now

Get your resume in shape. “Update your resume now – don’t wait until January – and make sure someone in your trusted network edits it,” Mazzullo says. “A second set of eyes always helps.”

The same goes for your social-media profiles.

“Make sure your profile reflects the position you hope to get, and make sure your profile pic is a great photograph, because people will dismiss you so quickly if they don’t see a professional headshot,” she says. “Start connecting to people who are working at the organizations you’d like to work at, then see what contacts you have in common.”

Look internally first

Are you sure you want to leave your current firm? There’s a chance that you can earn a promotion or transfer internally to a role, desk or group that is a better fit for you.

“The grass isn’t always greener – maybe it’s working in a different division or another office or for a different person,” says Kim Ann Curtin, the founder of the Wall Street Coach. “It might be easier to transition to a new role within a company you’ve already been accepted to – maybe go for a promotion or lateral move to a more interesting role rather than look to jump to another firm.”

Get out there and find the right company and role for you

Research helps you to identify what companies offer the job and work environment that you’re looking for. Research target firms’ social media pages and websites, attend association meetings, and ask friends and family who they know in the field and companies that interest you.

“Do informational interviews and dig deeper into what a typical day is like, what they like and don’t like about the job and company and what it takes to be successful,” says Maggie Mistal, executive coach at MMM Career Consulting. “You’ll know there’s a match or not and whether it’s worthwhile to pursue a job.

“Research also helps you build your referral base,” she says. “Most jobs are still landed by who you know, so whether you want to stay in your field or change into a new industry, you’re going to need contacts to get there.

Use the holiday season for networking, but be useful

Make an effort to be more open to connecting with other people, setting up coffee meetings and introductory phone calls. In addition, you shouldn’t be afraid to send introductory emails and social-media messages.

“It doesn’t have to be for a specific job, but it’s good to get your name out there a little bit,” Mazzullo says. “Don’t just ask for favors right off the bat – send an introductory message or email, talk about industry trends, share an article that’s interesting or comment on something they’ve posted rather than immediately asking for a job or a favor, because some people may feel that it’s a little too aggressive or presumptuous.

“There are a lot of industry events – including specific banking or PE networking functions, conferences and holiday parties – happening around the holidays, so it’s a good time to get out show your face and meet people,” she says.

Get out from behind your desk and network with others in the areas and companies you think you’d like to work in. Look to your university alumni association and attend charity events in person.

“I suggest making a goal of doing one to two informational interviews a week while you’re preparing for your job search,” Mistal says. “Reach out to old contacts and find out how they’re doing.
Follow @danbutchrwrites

Photo credit: AscentXmedia/GettyImages
““

↧

“Sexual harassment is horrific in the financial recruitment industry”

November 8, 2017, 7:07 am

≫ Next: The big problem with DIY quants

≪ Previous: What to do now if you want a new job when your bonus lands

Hollywood had its Harvey Weinstein moment. Banking had its BNP Paribas moment. Now it seems that financial recruitment firms need to have a moment of their own: women in the recruitment industry say harassment and sexism is endemic and that almost nothing is being done about it.

“I hear what women say about the sexism on trading desks and I think, ‘That’s nothing,'” says one senior female finance recruiter in London, speaking on condition of anonymity. “In recruitment it’s 10,000 times worse. The sexism and harassment in financial services recruitment is horrific.”

The flashpoint in recruitment firms is Thursday nights. Thursday nights are drinking nights, and are when male directors will often take more junior female staff on office trips to bars and clubs. “In my team we continuously had a problem with one of the male directors on Thursdays,” says the finance recruiter. “Every time we hired a new pretty junior member of staff he’d be all over her. I had to make sure I went along to defend her and if I didn’t, something would almost always happen. I had quite a few young women leave as a result.”

She says the firm, which is well-established in London, would hire young female recruiters purely on the basis of their looks (“I’d hear them talking among themselves after the interview and they’d be discussing the interviewee’s chest”) and that senior managers would send firm-wide emails about the women who’d hooked up with male employees on Thursday nights.

She herself has now left the company, but says the director with a reputation for harassing women is still firmly in place. “Recruitment firms don’t have the kinds of checks that banks have, and they often hire very young people. You get these 24 year-old men managing teams and making money and they get huge egos and create very sexist cultures.”

In defense of recruitment firms, the (male) head of another leading financial services recruiter in the City says he fired a consultant for harassing his young female staff last year: “We had someone who was being very predatory with our younger women, taking them to strip clubs and just being generally unacceptable.” However, he too agrees that harassment is endemic in financial services recruitment: “I know of two senior people with a reputation for this and both have been in the industry for a long time and their behaviour has had no consequence.”

Recruiters are more likely to harass recruiters rather than other candidates. The senior female recruiter we spoke to said the best way to avoid it is to bypass the Thursday night drinking session, to have zero tolerance for any unwanted advances, and to be a big biller: “These men can’t handle it when you bring in more than they do.”

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

““

↧

The big problem with DIY quants

November 8, 2017, 8:20 am

≫ Next: Meet the ex-ANZ bankers now helping to lead DBS

≪ Previous: “Sexual harassment is horrific in the financial recruitment industry”

This year, quants are the new rock stars of finance. Hedge funds, asset managers and investment banks are all rolling out the red carpet for those who can write algorithms that will ensure they get ahead of the competition as Wall Street restructures itself around a brave new world of artificial intelligence, quantum computing and huge reams of structured third-party data to make investment decisions.

As a talent crisis looms, there’s also a new generation of firms – such as Quantopian, Numerai, Quantiacs – convinced that there’s really not a shortage of quants, they’d just rather create algos at home in their pajamas than within the confines of an investment bank or hedge fund. These funds use the carrot of Darwinian competition with the chance of a monetary prize at the end or, in the case of Numerai, its own currency.

Quantopian hired Jonathan Larkin as its chief investment officer in June last year to lead a ‘community’ of data scientists, mathematicians and quants, shortly before it announced that hedge fund grandee and Point72 Asset Management founder, Steve Cohen, was investing $250m and that it had plans to manage external capital and launch its own hedge fund based around its best freelance members. Larkin has now departed, with reports suggesting that it was down to disappointing performance within Quantopian’s $50m hedge fund, which launched this summer.

There’s a bigger issue here. Maybe, the idea of a ‘crowdsourced’ hedge fund open to any DIY quant willing to work for comparative peanuts isn’t a fundamental threat to the highly-paid professionals after all.

“These types of platforms can often be more about quantity over quality,” says Alexander Lipton, a PhD who has held senior quant roles at Bank of America Merrill Lynch, Citadel and Credit Suisse. “These days, anyone can take an online course and call themselves a data scientist. Hiring quants for a large financial institution is a rigorous and complicated process – and rightly so.”

Lipton was head co-head of the global quantitative group at Bank of America Merrill Lynch, overseeing a team of 200 quants across New York, London, Tokyo, Hong Kong and Sydney and was heavily involved with recruitment. “It was a complicated process. Usually, we required a very strong technical background, preferably a PhD from a top school and then we’d take them through a gruelling interview process to ensure they were up to the job. You have to draw a distinction between the general public who claim to be quants versus the people with the relevant skills and qualifications.”

The interview process at investment banks has come under criticism from quants themselves. Gruelling nine-hour modelling tests and up to 10 rounds of interviews are reportedly the norm. Assuming you make it through this, if someone at the top has any doubts, the hire is not signed off. Jamie Walton, the former head of FX quants at Morgan Stanley, told us previously that it received 700 quant applications every year, and hired 10-20 of them. Any new recruit need 100% approval rates from those involved in the process.

Naturally, those running these companies believe in the rigour of their own selection process. Quantopian founder John Fawcett told the FT that “we have conviction in our investment process and expect our refinements will lead to improved results”.

Larkin told us previously that the 15 people Quantopian selected from 120,000 members to manage capital underwent a selection process to rival any hedge fund or investment bank. Quantopian vets the algorithms, and makes sure the code can run successfully on its own for six months. Then it goes into an automated screening process and, finally, is monitored by the firm’s own quant team. Anyone who makes it through this is then subjected to a background test and then an interview with the team.

The successful quants were not amateurs, he said, but ranged from quants studying computer science at Cornell, to senior data scientists working for internet companies, to mechanical engineers. “From our vantage point, we see a lot of people with the types of skills that would be welcomed in a lot of industries, particularly finance, but that don’t necessarily want to be tied down to one sector,” said Larkin. “To some extent, it’s reflective of the evolution of work – people want to move around.”

Lipton has since quit large financial institutions and now describes himself as an entrepreneur. He is involved with numerous projects – he’s just signed up as a senior adviser to blockchain start-up Zilliqa, as well as OTC derivatives settlement tech firm Clearmatics. He’s an adjunct professor at New York Stern University, a technology fellow at MIT and a visiting professor at the Oxford-Man Institute of Quantitative Finance.

While he believes that quants are entering a new golden age with the opportunity to work on exciting projects around blockchain, artificial intelligence and data science, financial services is no longer the natural home for the top quants, he says.

“When I started in the 1990s, any quant who was a little entrepreneurial went into an investment bank. It was the ideal place to be – interesting work, at the forefront of financial engineering,” he says. “Now, finance is more sedate and there are a lot more opportunities available elsewhere.”

Follow @paultclarke

Have a tip, story or comment? Contact: pclarke@efinancialcareers.com

Photo: Getty Images

““

↧

Meet the ex-ANZ bankers now helping to lead DBS

November 8, 2017, 10:05 am

≫ Next: Hong Kong investment bankers quietly “hopeful” about 2017 bonuses

≪ Previous: The big problem with DIY quants

DBS’s third quarter results, released earlier this week, reveal the extent that it’s taken on board ANZ staff. Headcount at the bank was up by 934 year on year, mainly because of new employees from the “ANZ integration”.

ANZ sold its wealth and retail businesses in Singapore, China, Hong Kong, Taiwan and Indonesia to DBS last year. Its Singaporean and Chinese operations have already been migrated into DBS, and some former ANZ staff have already slotted into senior roles at DBS. Here’s a selection.

Faraaz Ali, regional head of deposits and secured lending

Managing director Ali is responsible for business strategy, growth, product, sales, and risk management in his team at DBS. At ANZ, which he joined in 2015, he was regional head of retail banking products. Ali worked in Citi’s cards unit prior to that, holding senior positions in the Dubai and the US, according to his public profile.

Gino Abbruzzi, group chief credit officer

Abbruzzi was the chief risk officer for Hong Kong at ANZ for more than three years, but has group-wide responsibilities at DBS in Singapore. Although he began his career in bond sales and structured finance roles, he has held senior risk jobs since 1999, including chief credit officer for Asia Pacific at RBS.

Belinda Hsieh, funds and investment communication head, product solutions

Hong Kong-based Hsieh was previously head of wealth management products, retail and private banking at ANZ, and has a long product-focused career. She joined ABN AMRO in 1999 and became regional head of wealth management products. Hsieh then moved into RBS (when it bought ABN in 2008) and ANZ (when it took over RBS businesses in 2010). DBS is her third transition into an acquiring bank.

Chris Li, CIO North Asia

Li was at ANZ for nine years, latterly as head of investment advisory, and before that spent six years in relationship management at Bank of America. He specialises in high-net-worth client advisory, investment strategy formulation, and product development, according to his profile.

David Teo, Treasures private client offshore head

Teo has been a mass-affluent banker since joining Citi in 2002, according to his public profile. He moved to HSBC three years later, becoming deputy head of premier onshore banking in Singapore. Teo joined ANZ in 2011 and held four senior Singapore-based management roles. He was most recently head of distribution for wealth and branches at the Australian bank.

Sujatha Prakash, head of digital wealth and cards technology

DBS has also taken on ANZ technologists. Prakash was head of delivery services for Asia Pacific, Europe and America at ANZ for three and a half years. Between 2006 and 2013 he held several head-of-technology roles in India and Singapore at RBS. He was latterly in charge of market and credit risk technology for Asia Pacific at the British bank, according to his profile.

Fern Ning Chua, head, treasury and investment advisory, Shanghai

Shanghai-based Chua was head of affluent banking and branch network during her four years at ANZ. She started out in relationship management at Standard Chartered, before moving to China with the bank in 2006 and becoming regional head of distribution for Shanghai and Beijing.

Follow @simonmortlock

Image credit: cyano66, Getty

““

↧

Hong Kong investment bankers quietly “hopeful” about 2017 bonuses

November 8, 2017, 10:10 am

≫ Next: Morning Coffee: How you’ll know you’re too old to make MD at Goldman Sachs. Elite students urged to adopt banking lifestyle

≪ Previous: Meet the ex-ANZ bankers now helping to lead DBS

Hong Kong investment bankers working for global firms are more upbeat about their bonus prospects than they have been for years, say headhunters and bankers.

“The hope is that bonuses will be better than they have been for the past five years,” says Nick Green, a partner at headhunters Odgers Berndtson. “Market sentiment in Hong Kong is a lot more positive than it’s been for five years, perhaps since the financial crisis. Bankers are more optimistic.”

Job cuts among expensive senior staff in Hong Kong in 2015 and 2016 have also given global banks more scope to increase their bonus pools for their remaining bankers.

But don’t get too excited. While any rise in bonuses will reverse a long-standing downward trend, increases are not likely to be dramatic and won’t be spread evenly across different banks and coverage sectors.

US banks are likely to be the most generous paymasters for 2017. “Goldman, Morgan Stanley, Citi, JP Morgan: the US banks will pay healthier bonus due to a better global revenue pool,” says a Hong Kong banker who asked not to be named.

“The US economy has been doing better this year, and that has also meant that US banks have been performing better, with rising share prices and year-on-year increases in earnings,” says Christina Ng, executive director at LMA Recruitment. “This should have a spill-over effect into their bonuses for Hong Kong bankers, which are likely to be more than last year.”

J.P. Morgan, Morgan Stanley and Citi all feature in the top-seven firms for Asia (ex-Japan) core IB revenue for the first nine months of 2017, according to Dealogic. The other four banks are Chinese.

Unsurprisingly, the best bonuses will likely go to bankers covering mainland China. While Asia Pacific domestic M&A dropped 3% in the first nine months to reach $515.6bn, China continued to dominate with a 60% market share.

“There’s now a clear demand for China bankers – across all sectors – but particularly in areas like technology, consumer and healthcare,” says Green from Odgers Berndtson.

“Industrials and chemicals, and real estate also continue to be pipeline-rich industries,” says Stanley Soh, a Hong Kong-based regional country director of financial services solutions in Asia. “These bankers will see above-market-average bonus due to the higher volume and value of these deals.”

Meanwhile, bonuses still will be focused towards “about the top 30% of bankers, the elite performers”, says Eunice Ng, a director at headhunters Avanza Consulting in Hong Kong.

“The biggest bonuses have recently been awarded to a small number of high performers rather than given out more widely,” adds Green. “This trend will continue, although the hope is that the high-performer group will be larger this year.”

Follow @simonmortlock

Image credit: bee32, Getty

““

↧

Morning Coffee: How you’ll know you’re too old to make MD at Goldman Sachs. Elite students urged to adopt banking lifestyle

November 8, 2017, 11:51 pm

≫ Next: Upset in Paris as U.S. style layoffs come to small French bank

≪ Previous: Hong Kong investment bankers quietly “hopeful” about 2017 bonuses

Are you too old to make managing director at Goldman Sachs? If you’re much beyond 45, the answer is probably yes. It may even be yes if you’re much beyond 35.

Goldman Sachs released its new MD list yesterday. Aside from being the largest such list ever (more on this below) it also offers some handy demographic pointers about the nature of managing directors (MDs) at Goldman Sachs.

Basically, Goldman MDs are young. On average, each new MD on the list has spent 10 years at the firm. If you start at Goldman when you’re 25, the implication is that you’ll be MD in your mid-30s. The earlier the better.

Like last time, Goldman also promoted a large chunk of Millennials (aged between 20 and 36). 44% of this year’s new MDs were in this category, up from a third the last time Goldman made MD promotions in 2013.

None of this should come as a surprise. The average age at Goldman Sachs is 28: youthful promotions are an inevitability.

Meanwhile, Goldman’s giant MD class, which is skewed towards trading, has a message of its own: that Goldman has promoted so many people suggests it’s working hard to retain them after a difficult year. If you’re not increasing bonuses, what better way to keep people on your side?

(Other stats to know about the new MD class: 43% have at least one advanced degree, while 66% started as analysts or associates at Goldman, the bank’s entry-level positions, and 21% are former Goldman Sachs interns – 20% have worked in multiple regions, while 47% have worked in multiple divisions. In investment banking, 101 people were promoted to MD, up from 97 in 2015. In the securities division, which includes sales and trading, 130 people were promoted, compared with 102 in 2015. Eight people were promoted in the consumer and commercial bank, when in 2015 no one was promoted. In technology, the total number was 52, up from 38 two years ago. The percentage of women promoted to MD declined to 24% this year from 25% in 2015. Staff based in the Americas accounted for 57%, up from 54% two years ago….)

Separately, it’s well-known that the Ivy League and Oxbridge are extremely competitive and stressful, but it’s widely assumed that most elite students are self-motivated to go the extra mile. It doesn’t help when professors encourage impressionable minds to go overboard on studying to the point that they don’t have any time for socializing or drinking.

A Cambridge University professor has been accused of “frightening impressionable undergraduates” after he sent an email to first-year students warning them that they would have to give up their social lives if they wanted to do well on the course, according to the International Business Times.

In an email to first-year natural sciences students at Queens’ College, Professor Eugene Terentjev wrote that the course required their “full brain capacity” and would leave them little time for a “social life” and “drinking.”

“Physical sciences is a VERY hard subject, which will require ALL of your attention and your FULL brain capacity (and for a large fraction of you, even that will not be quite enough),” he wrote in the email, which a student shared on the Memebridge Facebook page.

“You can ONLY do well (ie achieve your potential, which rightly or wrongly several people here assumed you have) if you are completely focused, and learn to enjoy the course. People who just TAKE the course, but enjoy their social life, can easily survive in many subjects — but not in this one,” Terentjev warned the students.

“Remember that you are NOT at any other uni, where students do drink a lot and do have what they regard as a ‘good time’ — and you are NOT on a course, as some Cambridge courses sadly are, where such a behaviour pattern is possible or acceptable,” the email concluded.

The message sparked outrage among students, academics and mental health campaigners who warned that Terentjev’s comments could be “extremely damaging” to the mental well-being of students concerned.

Anthony Seldon, vice-chancellor of Buckingham University and a prominent mental health campaigner, criticized Terentjev for “frightening impressionable undergraduates into believing that work alone is all-important”, describing his message as “irresponsible, unkind and wrong-headed.”

Meanwhile:

Goldman Sachs has got a new management structure in its trading business. (Bloomberg)

Jamie Dimon had a personal meeting with the British government and feels better about Brexit now. (Financial Times)

A Harvard Business School case study on the Goldman’s digital strategy, which runs through some of the history of the bank’s efforts to switch to thinking like a tech company, some of the tension it has caused and the payoffs, was presented as part of the executive MBA program last week. (Business Insider)

Some fintech startups want to become banks, too. (Bloomberg)

How a woman from a non-target university landed an equity sales internship and a full-time offer at a bulge-bracket bank in New York. (Mergers & Inquisitions)

Credit Suisse made a big e-trading hire. (Financial News)

UBS has made some big changes to management at its investment bank. (Wall Street Journal)

Jonathan Larkin, the chief investment officer of crowd-sourced quantitative investment algorithm platform Quantopian, has left the firm following disappointing returns in its inaugural hedge fund. (FINalternatives)

A small band of trading specialists are taking calls about $50m bitcoin trades. (Business Insider)

If you’re a trader or portfolio manager shorting a stock, then be sure you don’t the mistakes that these short-sellers just did. (Business Insider)

Venezuela has turned into bond traders’ worst nightmare. (Bloomberg)

Former Cheyne Capital senior portfolio manager Dietmar Schmitt is relaunching his hedge fund business, Sam Capital Partners, with a 10-person team of investment professionals. (HFMWeek)

Bumble, a dating app known for letting women initiate contact with men, now allows its more than 22m registered users to search for prospective mentors and colleagues, in addition to romantic interests. (WSJ)
Follow @danbutchrwrites

““

↧

Upset in Paris as U.S. style layoffs come to small French bank

November 9, 2017, 3:48 am

≫ Next: Morgan Stanley analyst quits for hot tech firm tackling huge real world problems

≪ Previous: Morning Coffee: How you’ll know you’re too old to make MD at Goldman Sachs. Elite students urged to adopt banking lifestyle

Exane Derivatives in Paris is a small place. Exane as a whole only employs 935 people according to figures on its website. A tiny fraction of those work for the French derivatives operation. In the circumstances, a continued drip, drip of layoffs is raising eyebrows internally.

As we reported last month, it’s not normal to make large scale redundancies in France. When SocGen wanted to let go of 500 people in its corporate and investment bank, it was forced to give them generous voluntary redundancy packages. BNP Paribas, too, has often opted for voluntary redundancies in its “simple and efficient” cost cutting programme.

Exane Derivatives, however, appears to be bucking the trend. Insiders say it keeps laying people off. Quietly, slowly, a few every month so that no one will notice.

Last month’s big exit was Stéphane Bettane, the managing partner of the derivative business. This month’s is said to be Hedda Benguerah, the head of marketing. Insiders say a senior strategist, a convertible salesperson and several support staff are leaving too.

Exane didn’t respond to a request to comment. Benguerah didn’t confirm her exit, but was not there when we called.

The exits, which are becoming a monthly occurrence, are at odds with the norms of French finance employment. “This is a small place and we’re starting to think that four or five people will go every few weeks,” says one insider. “They’re doing it like this so that they don’t have to deal with collective redundancy legislation,” he adds. French collective redundancy regulations apply only to instances where ten or more people are let go at one time.

In opting for a continuous drip of gradual layoffs, Exane is emulating U.S. banks like Goldman Sachs. Headhunters in London say the U.S. bank has a tendency to dribble staff out below the radar rather than making large headline-grabbing layoffs. Exane seems to have decided to do much the same.

Follow @MadameButcher
Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com

“”

Photo credit: I love Paris in the springtime by Jonathan Ooi is licensed under CC BY 2.0.

↧

Morgan Stanley analyst quits for hot tech firm tackling huge real world problems

November 9, 2017, 3:48 am

≫ Next: Is this the worst place to work for Goldman Sachs? Or the best?

≪ Previous: Upset in Paris as U.S. style layoffs come to small French bank

MiFID II comes into force in January next year, and if you’re a not a star equity research analyst in the senior ranks, it’s likely to bring in a new era of precarious employment prospects.

Analysts have, of course, been looking for new pastures – whether that’s a comparatively safe home on the buy-side, or investor relations.

Laura Ashworth, an equity research associate focused on the software industry at Morgan Stanley, has taken a different route – joining a hot new technology company developing huge virtual simulations to solve massive real-world problems.

Ashworth joined Improbable, which creates virtual world using cloud computing of “unprecedented scale and complexity”, as a strategy analyst late last month after more than three years in equity research.

Improbable, which is based in the UK, received $502m in funding from Japan’s Softbank in May, which it will use for hiring and developing technology. The firm has big ambitions. SoftBank managing director Deep Nishar said at the time of the investment that Improbable’s technology “will help us explore disease, improve cities, understand economies and solve complex problems on a previously unimaginable scale”.

Improbable also has a history of hiring from investment banks. Its head of corporate, Aleksandra Laska, previously worked for Goldman Sachs’ markets business, while its chief operating officer, Peter Lipka, was formerly an analyst within its technology team and James East who works in Improbable’s enterprise division joined from the U.S. bank in August last year.

Follow @paultclarke

Have a tip, story or comment? Contact: pclarke@efinancialcareers.com

Photo: Getty Images

““

↧

Is this the worst place to work for Goldman Sachs? Or the best?

November 9, 2017, 7:15 am

≫ Next: “I work in the Paris office of a top US bank. It’s completely different here”

≪ Previous: Morgan Stanley analyst quits for hot tech firm tackling huge real world problems

Goldman Sachs’ Bangalore business is quite the place. Between 2004 and April 2017, it went from 400 to 5,000 people. Since April, it’s seemingly added another 1,000. Ultimately, it could have up to 9,000 people on a new $250m “campus” site due to open in 2019. While Google has the Googleplex, Goldman will soon have a large leafy area on Bangalore’s ring road.

Goldman president David Solomon is all for the firm’s expansionary Indian operation. In a recent throaty podcast posted on Goldman’s own site, Solomon said India has plenty going for it: 50% of the population is 25 years or younger and the Indian government needs to create “10 million jobs a year” simply to keep them all busy. India is already growing faster than China, said Solomon, and the lack of Indian investment in infrastructure creates a huge potential for “outside capital” to make improvements. Ultimately, Solomon said he’s more optimistic about the business opportunity for Goldman’s clients in India than he is for their opportunity in China.

This is saying something, given that China has long been hailed as the holy grail for banks’ expansion globally. It also explains why Solomon says Goldman now houses 6,000 people in Bangalore, and why Goldman is currently advertising at least 100 more roles there – not all of them in technology and the so-called “Federation” (back office), but in its investment banking division and front office “strats” teams too.

However, there’s a cloud over this Indian idyll. And that cloud is promotions. Getting promoted in Bangalore isn’t easy.

The issue is illustrated by Goldman’s latest list of managing director (MD) promotions. While 17% of the firm’s 35,800 employees are now based in Bangalore, just 2% of the new MD class came from the Bangalore office. Nor are things getting better: 4% of Goldman’s new MDs were in India in 2015. If you’re in Bangalore, the trend is moving in the wrong direction.

The resulting frustration is in evidence on Glassdoor’s site devoted to Goldman’s Bangalore employees. Alongside the standard Goldman-related complaints about working hours, there are people there bemoaning the lack of promotional opportunities and the tendency to hire-in new graduates and pay them more than experienced hires. One analyst in Bangalore specifically decries what he claims is Goldman’s tendency to demote experienced analysts with two years experience to “analyst 0” if they move into front office roles, possibly in London or New York.

Even so, and despite the near-impossibility of getting a sniff at MD jobs in Bangalore, morale in India generally seems good. Employees at Goldman’s Bangalore office give it 3.9 stars overall on Glassdoor – the same as their peers give London and New York, and one anonymous Bangalore employee credits management with being, “awesome”.

Anyone looking for the most miserable office at Goldman, might therefore instead want to cast their eyes to Warsaw, where Goldman is busily building another low-cost hub in Europe. Although, 25% of the people Goldman promoted this year are in Europe, none of them appear to be in Warsaw, despite Goldman having had an office there since 2011 and already employing hundreds of people in Poland. On Glassdoor, Goldman’s Warsaw office only has three employee reviews. One claims senior staff there are out for themselves. Another says it’s hard to make money and “grow”.

““

↧

“I work in the Paris office of a top US bank. It’s completely different here”

November 9, 2017, 8:55 am

≫ Next: DBS’s head of cloud has just joined Google

≪ Previous: Is this the worst place to work for Goldman Sachs? Or the best?

I work in the investment banking division (IBD) of the Paris office of a major U.S. bank. Yes, I am French. No, I am not here because of Brexit. And yes, I am here by choice.

If you’re thinking of moving to Paris, there are some things you need to know. I have worked in Paris and London, so I am well placed to tell them to you. I have seen how the two cities work.

Firstly, you need to know that Paris is small. The U.S. bank I work for here has thousands of staff in London, but hardly anyone in Paris. Every year it recruits around three analysts in Paris. Today, we have seven analysts, seven or eight associates and around eight vice presidents. There are around six managing directors. There are two senior advisors. This is all.

Secondly, because of the small size of the office, the people in Paris are all-rounders. We can each do everything. We can originate and execute deals. We work across sectors. Yes, we work with the sector teams in London, but this is usually only at a senior level (we might get the London MD or VP helping with a pitch, for example). Sometimes, we work with the financing (ECM and DCM) teams in London too. We are powerhouses who operate across the spectrum.

This second reason is why I am based in Paris. It is a professional choice to be here: the work is more fulfilling. I also believe that working in Paris is better for my long term career prospects and my exit options. By being in France I am expanding my network at French corporates. This will make it easier for me to move into corporate development when I move out of banking.

I have personal reasons for being here too. I am French and I am a patriot: I want to cover French companies in France. I find it more satisfying to work on a project involving a French company I have known forever than a random Czech company I’ve never heard of. This is why I left London. I also have friends and family here. I am speaking in my first language. I do not have the discontinuity you get when you build a life in London.

If you move to Paris, then, you need to know that this is not a second tier office filled with second tier people. This is a small office, but the people here are exceptional. We are all people who would be in the top tier of analysts in London. We are highly capable and we are proud. We work harder than our colleagues in London and we work better. If you work in a bank, you need to know that Paris is completely different to London: London is second rate.

Matthieu Genou is the pseudonym of an analyst at a U.S. bank in Paris.

“”

Photo credit: Still life with a pigeon by Stefano Corso is licensed under CC BY 2.0.

↧

DBS’s head of cloud has just joined Google

November 9, 2017, 10:20 am

≫ Next: Hiring meltdown: bankers in Singapore and HK suddenly pull out of job offers

≪ Previous: “I work in the Paris office of a top US bank. It’s completely different here”

Carl Bachman Kharazmi, the APAC head of cloud engineering at DBS, has left the bank for Google.

Kharazmi joined Google in Singapore earlier this month in a cloud engineering role, according to his public profile.

During his two years at DBS, he led its “transformation” from traditional enterprise software to cloud technologies, including the adoption of public clouds such as AWS, SoftLayer and Azure. Kharazmi also ran automation projects and mentored teams across the bank on implementing open-source technologies.

DBS is the only finance firm that Kharazmi has worked for and his move to Google sees him returning to a technology company.

Kharazmi was at IBM (in its SoftLayer Technologies unit) from 2014 to 2015, latterly as an APAC infrastructure engineering leader, in charge of a 14-strong team. He has held various technology positions dating back to 2004, including as a team lead and enterprise cloud architect at video surveillance firm Axis Communications, where he worked between 2008 and 2013.

Western and Chinese technology companies are hiring more developers in Singapore and Hong Kong as the two cities transition from sales hubs to engineering centres. Google opened a new campus-style APAC headquarters in Singapore last November and now has more than 1,000 staff in the Republic.

Meanwhile, banks are targeting the same (small) developer talent pool. UOB, for example, wants candidates from “global technology platforms” such as Amazon, Google, Facebook and Uber, Susan Hwee, head of group technology and operations, told us in September. “These people are focused on engaging customers and customer-centric design, just like we are.”

Senior Asian technologist at Credit Suisse, DBS, OCBC, have also said they want to hire from outside of finance, insisting that the complexity and scale of banking systems make the sector appealing to new recruits. Kharazmi’s departure, however, is a reminder that banks can’t always keep hold of their top IT staff as more local jobs open up at tech firms.

Still, DBS continues to hire in technology. It aims to take on 200 new people, mainly developers and architects in Singapore and India, in the 12 months to end-May 2018. Our August analysis found that 24% of vacancies at DBS, OCBC and UOB were for tech and digital banking roles.

Could expertise is increasingly in demand at banks in Singapore and Hong Kong. “Banks are hiring fewer database administrator and other standalone infrastructure roles,” says Vince Natteri, managing director of IT recruiters Pinpoint Asia. “Instead banks are moving their tech into the cloud. So if you’re a banking tech infrastructure candidate, you’re better off learning AWS, Google Cloud Platform or other cloud technologies to hone your skills for the future.”

Follow @simonmortlock

Image credit: SpVVK, Getty

““

↧

Related articles:

Related articles:

Related articles:

Related articles:

Related articles:

Meanwhile:

Related articles:

Related articles:

Bank of America: Massive spending on (and likely hiring in) technology. Needs to get rid of some more traders

Barclays: No redundancies planned, ongoing hiring across technology and sales and trading (especially cash equities and electronic)

BNP Paribas: Still pursuing ~5% compound annual revenue growth in its global markets business. Has a further €100m of costs to take out of its corporate and investment bank before the end of the year

Credit Suisse: Continued cost squeeze focused on contractors. Equities hiring is over, but hiring (seemingly) continues in compliance

Citi: Gaps to fill in credit trading, still building in equities. No mention of cost cutting

Deutsche Bank: Cuts likely in support functions. Hiring likely in the U.S.

Goldman Sachs: Hiring ‘coverage and distribution staff’. Quietly culling some U.S. equity derivatives traders

J.P. Morgan: No mention of hiring, no mention of firing, but firing would be beneficial. Machine learning specialists welcome

Morgan Stanley: Investment in technology. No cuts planned

UBS: No cuts coming. Ominous things have been said about automation and hiring in technology

Related articles:

Related articles:

Update and edit your resume now

Look internally first

Get out there and find the right company and role for you

Use the holiday season for networking, but be useful

Related articles:

Related articles:

Related articles:

Faraaz Ali, regional head of deposits and secured lending

Gino Abbruzzi, group chief credit officer

Belinda Hsieh, funds and investment communication head, product solutions

Chris Li, CIO North Asia

David Teo, Treasures private client offshore head

Sujatha Prakash, head of digital wealth and cards technology

Fern Ning Chua, head, treasury and investment advisory, Shanghai

Related articles:

Related articles:

Meanwhile:

Related articles:

Related articles:

Related articles:

Related articles:

Related articles:

Related articles: