Big redundancies at Berenberg as the bank ‘resets’ headcount to 2017

November 6, 2018, 6:37 am

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So much for Berenberg’s big equities hiring. The German bank said in February that it planned to add 100 people in the next two years. Instead, it’s making some big redundancies.

Insiders suggest Berenberg is making big cuts across its business in London with redundancies across research, sales and trading. One insider described the departures as, “significant.”

A spokesman for Berenberg confirmed the cuts. “After many years of successful growth and a planned Autumn 2018 review of our structure, we are re-setting equities headcount back to the beginning of 2017,” he said, adding that this is being done from a “position of strength” after market share gains.

Berenberg hired 70 people in London in 2017 and is thought to have hired at least 30 additional people this year. It is thought to employ around 380 people in the City in total, implying that the cuts amount to over 20% of staff.

The redundancies come amidst fears that Mifid II regulations will lead to widespread redundancies in equity research and equity sales in the City of London. So far, banks have held off making big job cuts, but recruiters have been predicting layoffs before 2018 bonuses are paid.

Berenberg’s redundancies are understood to have affected members of its healthcare and insurance teams among others.

In January, David Mortlock, global head of investment banking and head of the UK London office at Berenberg, told Financial News the bank’s expansion was justiifed: “We’re not delusional, we understand that the research pot is coming down, by 20-30%, but there’s not a single big client whose research list we’re not on.”

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The foreign bank that’s become a happy home to U.S. bankers and traders

November 6, 2018, 6:59 am

≫ Next: How to write a CV that will get you a job in accounting

≪ Previous: Big redundancies at Berenberg as the bank ‘resets’ headcount to 2017

Known mostly for its presence in its home country, Australian investment bank Macquarie is quietly taking market share away from Wall Street rivals in areas in which they historically dominate: investment banking and trading, particularly in commodities.

Net income for the first half of the year was up 5% despite a small downtick in homegrown profit. The Aussie bank was buoyed by a massive 31% increase in income in the Americas, which has nearly overtaken Australia as Macquarie’s most profitable region, despite having roughly 40% fewer employees. Macquarie’s investment banking and trading businesses did most of the heavy lifting, delivering a combined net profit of nearly $800 million, up 95% year-on-year. Income from its investment bank, Macquarie Capital, was up 114%, driven particularly by higher M&A and debt capital market (DCM) fees in the U.S.

Interestingly, U.S. investment bankers and traders appeared to do more with less. Headcount in the Americas only grew by 4% over the past year, compared to increases of 5% in Asia, 6% in Australia and 14% in EMEA, which saw its income for the half-year decrease by 3% despite all the hiring. However, U.S. investment bankers and traders should be rewarded handsomely. Employment expenses within Macquarie’s investment banking and markets businesses were up 13% and 11%, respectively, year-on-year.

Part of what makes Macquarie so desirable is that it is allowed to operate outside of the authority of U.S. and European banking regulators. Unlike U.S. banks tied to the Volcker rule, Macquarie can still make trades with client money. In fact, the Aussie bank just hired two prop traders for its London desk last week. Macquarie also hasn’t faced any pressure to limit their exposure to the volatile commodities business, an area in which they are now considered a market leader. This unique leverage is now coming home to roost in the West. Macquarie is paying well in the U.S. while adding hundreds of bankers in EMEA.

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How to write a CV that will get you a job in accounting

November 6, 2018, 9:08 am

≫ Next: Here’s how much MBAs earn in banking, private equity, consulting and hedge funds

≪ Previous: The foreign bank that’s become a happy home to U.S. bankers and traders

If you want an accounting job – either with the Big Four or in an accounting role in an investment bank, you will need to craft your CV (or resume) carefully. Accounting is an an increasingly complex and dynamic business environment and you need to market yourself carefully.

In my experience, every accountant wants their technical ability to really shine on their CV. That’s understandable. But many fall into the trap of simply documenting all the finer details of technical accounting processes, without putting it into context for the reader. You need to remember that your CV is a marketing document: you need to sell yourself, and you need to write for an audience that may not be an accountant (or aspiring accountant!) like yourself.

Your accounting resume needs to get past the applicant tracking system (ATS)

The first thing you need to do is to get your CV past the robots. – These are the so called applicant tracking systems which typically check your resume to make sure it contains the next skills before passing it to the next stage. If the ATS can’t find the right words, your resume won’t get past first base.

To ensure your CV covers all the important keyword areas, align your bulleted achievements to standard accounting competency frameworks. ACCA and CIMA both provide these. As you’d expect, CIMA’s framework has a management accounting bias.- CIMA’s framework is split into four knowledge areas; technical, business, people and leadership. The latter three are particularly relevant for accountants who are interested in wider business roles. These include management accountants, FP&A managers and finance business partners.

Structure your CV as bullet points and add the right keywords

The best way to structure your CV is as a series of bullet points. Each bullet needs to describe what you achieved. Start each one with an outcome that was beneficial to the business and a keyword if you can. Try to include the following technical competencies (although this isn’t definitive!).

Corporate Reporting: Preparing high-quality business reports to support stakeholder decision-making; financial accounting and reporting; cost accounting and management; business planning; group accounting; corporate finance.

Financial Management: Implementing finance decisions to maximise value creation in areas including investment appraisal, business re-organisations, tax and risk management, treasury and working capital management.

Taxation: Compliance with tax regulations; communicating with authorities to establish and manage tax liabilities; using tax computation and planning techniques.

Audit: Evaluation of information systems and internal controls; gathering evidence and performing procedures to meet audit objectives.

Governance, Risk & Control: Evaluation and implementation of risk identification procedures by designing and implementing effective internal control systems.

IT Finance Systems: Designing, planning, configurating and implementing accounting systems, or as finance lead for integrated ERP configuration.

Think hard about your numbers

For each of your bullet point achievements, think carefully about what you did and try to reflect the outcome in a way that can be measured numerically. ‘Guestimating’ with integrity is absolutely fine. Remember to keep the language simple, so it’s easy to read and accessible for all relevant audiences!

Victoria McLean is the CEO City CV, an award-winning international CV writers and career consultancy. She was previously a recruiter at Goldman Sachs and the equities division of Bank of America Merrill Lynch.

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Here’s how much MBAs earn in banking, private equity, consulting and hedge funds

November 6, 2018, 9:31 am

≫ Next: “I’ve left the US for a banking job in Hong Kong. I wouldn’t go back”

≪ Previous: How to write a CV that will get you a job in accounting

If you attend a top business school, you can expect to earn well over six-figures during your first year after graduation in almost any industry. New salary data from Harvard Business School shows that the only 2018 graduates to not earn over $100k entered the government or non-profit sector. But where can you earn the most?

As you can see in the chart below, fresh MBA grads from Harvard who took jobs in private equity, consulting and at hedge funds earned the same average base salary – $150k. Those who entered investment banking take home an average salary of $125k, though they received the largest median signing bonus of $50k. Investment bankers and consultants were also much more likely to receive a signing bonus. Roughly 94% of each cohort were given a bonus after accepting an offer; those percentages dropped to 33% and 27%, respectively, at hedge funds and private equity firms/VCs.

However, investment bankers reported receiving no other guaranteed compensation, typically in the form of perks like company cars and guaranteed bonuses that are written into employment contracts. This is where hedge funds and private equity firms can differentiate themselves from investment banks and consulting firms, but also from each other. Median non-signing bonus compensation at hedge funds was a staggering $150k, though only one-third reported receiving anything. Other guaranteed compensation at private equity firms and VCs averaged around $84k for the 21% who were fortunate enough to get a sweetener.

If the numbers tell us anything it’s that most MBAs who work in private equity, investment banking, consulting and at hedge funds earn around the same during their first year. However, there are a handful of hedge funds and private equity firms that roll out the red carpet for new MBA grads, or at least those from Harvard. With potential signing bonuses and other guaranteed compensation, a first-year hedge fund employee can earn well over $300k, and that doesn’t even include performance bonuses.

Follow @BeecherTuttle

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“I’ve left the US for a banking job in Hong Kong. I wouldn’t go back”

November 6, 2018, 9:59 am

≫ Next: Behold the new ways to get a job at OCBC in Singapore

≪ Previous: Here’s how much MBAs earn in banking, private equity, consulting and hedge funds

About this time last year my bank transferred me from the West Coast of the US to Hong Kong. I’m an American-born Chinese corporate banker and I’d like to think I landed the move because of my performance levels…but my language skills may have had something to do with it. The stereotype, of course, is that the West Coast is a far more laid back place to work than Hong Kong, where is it’s nose to the grindstone 24/7. But I haven’t found that to be the case.

Nor have I found it difficult to cope with living in Hong Kong – my bank’s internal mobility team helped everything run smoothly. But working here, even for the same bank, is different.

Many of my bank’s clients are based in Hong Kong or China, so I’ve had to work pretty much like a local banker, conversing in Chinese much of the time. And many of our managers aren’t expats – they’re Hongkongers who’ve worked for the likes of Standard Chartered, Citi and HSBC. I don’t feel like I’m working in an American bubble transplanted into Asia.

While my bank is well known in the US, it’s not a big player in Asia – and therein lies another difference. I really feel the lack of resources here compared with the US. We don’t have large compliance or technology teams in the same office, for example. But overall, this is an advantage. We’re growing in Hong Kong right now, so when new people join here (unlike in the US) they make a discernible impact on the business and on my job. And our expansion makes for a very vibrant office environment, too.

Adding to this sense of adventure is the fact that I don’t typically know what my daily routine will be. In the US I had a very defined role; in Hong Kong my responsibilities are more varied. Aspects of the job are more challenging but also more interesting. The US regulatory system now seems straightforward, especially compared with covering distressed accounts in China. Often it’s not even advisable in China to file legal proceedings as it could hurt the reputation of the bank.

I came to Hong Kong as a relative junior in terms of experience in corporate banking, but I’ve quickly had to take on more responsibilities than I did back home. I’m now doing board presentations and working across a diverse region rather than a single country. I also get far more direct exposure to senior managers because they’re sitting right next to me and they actually need my help.

Admittedly, moving from the West is becoming more difficult for most bankers, and speaking Chinese gave me a huge advantage over other people looking to relocate. But personally, I’m relishing the differences between America and Asia, and have no wish to return.

Tony Chee is a pseudonym.

Image credit: zorazhuang, Getty

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Behold the new ways to get a job at OCBC in Singapore

November 6, 2018, 10:00 am

≫ Next: Morning Coffee: Ex-Goldman Sachs partner on the personal damage inflicted during his finance career. Bank of America’s wild hiring spree

≪ Previous: “I’ve left the US for a banking job in Hong Kong. I wouldn’t go back”

OCBC now employs almost 30,000 people across Asia and its headcount continues to rise. But what does it take to get a job at the bank? And what should you know about careers and hiring there before you step into an interview? OCBC’s third-quarter earnings report provides some new clues, which we’ve summarised below.

Global corporate and investment banking is suddenly hot

OCBC isn’t all about retail and wealth – its attractiveness as an employer for corporate bankers and (to a lesser extent) investment bankers is on the rise. Year on year, OCBC’s global corporate/investment banking division grew its operating profit by an impressive 29% to $1.48bn in the first nine months. It was the highest increase of the bank’s six units and was “driven by net interest income growth and lower allowances”.

Are salary rises strong enough?

Staff costs per head at OCBC – total employee expenditure (such as salaries and bonuses) divided by total headcount – rose by 4.5% ($2,793) year on year to reach $65,514 for the first nine months of 2018. That’s above the rate of inflation in Singapore, but well below the 10.4% increase enjoyed by UOB employees, who took home $71,633 on average. OCBC’s comparative parsimony may pose potential staff retention concerns if the firm continues to be outflanked on the salary front by both UOB and DBS.

Bank of Singapore continues to hire

OCBC’s private banking arm is now firmly established in the upper echelons of Asian wealth management. As of December last year, BoS was the seventh largest private bank in the region, managing more assets than the likes of Goldman Sachs and JP Morgan, according to Asian Private Banker. OCBC’s results reveal a further 11% year-on-year uptick in AUM at BoS (for the first nine months), which has now hit a record high of US$105bn, driven by sustained net new money inflows. BoS has also been hiring this year, say headhunters, and it now plans to recruit six more bankers for a team set up in May to support independent asset managers.

Headcount is up 558…

OCBC’s headcount is now well on its way to reaching 30k. It now stands at 29,719 – up by 558 year on year. The rise isn’t as large as at UOB (which added 928 people to its payroll over the same period) but is still significant in a tight labour market.

…partly driven by technology

Like its local and global rivals in Singapore, much of OCBC’s recent hiring has been focused on technology. “Our technology and digital investments have strongly contributed to our franchise expansion,” says the bank’s Q3 report. Many of OCBC’s new tech recruits are working on emerging technologies, such as the roll out of a facial recognition system for its premier banking business.

Keep an eye on: OCBC Wing Hang

Want to move from Singapore to Hong Kong? Applying to OCBC Wing Hang may be the answer. OCBC’s Hong Kong franchise, which specialises in commercial banking, consumer financing, share brokerage and insurance, saw its operating profit rise 28% to $367m in the year to end September. Wing Hang’s traders appear to have had a good nine months – OCBC pinned some of the rise on higher trading income.

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

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Image credit: robyvannucci, Getty

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Morning Coffee: Ex-Goldman Sachs partner on the personal damage inflicted during his finance career. Bank of America’s wild hiring spree

November 7, 2018, 12:26 am

≫ Next: Cognizant is at an exciting phase in Asia Pacific. Here’s what’s driving demand for its services

≪ Previous: Behold the new ways to get a job at OCBC in Singapore

It’s difficult to reach the top in investment banking. Everyone understands that, and we don’t necessarily need interviews with the extremely successful to tell us something so obvious. What makes Mike Novogratz, ex-Goldman Sachs partner and CEO of Galaxy Digital, so unusual is that as well as the regular hard work and success story, he talks frankly about the effect that success had on his personality and relationships. “Rarely do you leave Wall Street on a high”, he tells Financial News. “Most people leave having broken some glass, pissed off and cut up. I certainly left that way”.

Novogratz ran fixed income trading for Goldman Sachs in Hong Kong twenty years ago. He left the firm in 2000. The Financial News isn’t the only one to write about his time there. In a long article in the New Yorker last April, author Gary Shteyngart noted that Novogratz’ Goldman exit was down to, “lifestyle issues.” “We’re a family of near-alcoholics,” he told Shteyngart, who observed that he had been widely regarded as one of Wall Street’s ‘hardest charging party animals’ and that his time at Goldman Sachs’ Hong Kong office had been spent, “partying like a rock star.”

Novogratz married his wife Sukey Cáceres when he was 25. Four children later, they’re still together. Sukey doesn’t hold back on Novogratz’ time in Hong Kong. It was, “very challenging for marriage,” she told Shteyngart. Her husband was: “Someone who was constantly hedging his bets, literally, in work and in life, like, eh, I can never fully commit, even though we were married.”

Novogratz’ insalubrious Goldman exit was followed by a spell running the hedge fund business at Fortress. His downfall there came as a result of poor investment returns rather than hard parties, but by the end of 2015 he had burned his bridges at Fortress too and the fund was closed down.

Redemption came through an incongruous combination of yoga and cryptocurrency. After leaving Goldman, Novogratz went to rehab in Arizona to work on himself and his marriage. He ran six marathons in the desert. He started a punishing regime of three hour vinapassana meditation sessions to calm down and focus. And he invested in a small Ethereum crypto platform. The latter gave Novogratz the inspiration to set up Galaxy Digital, with the aim of becoming “the Goldman Sachs of crypto”, and despite the disappointing performance of Bitcoin this year, his investments have so far made between $700m and $1bn.

Novogratz’ story is of someone significantly larger than life. The biggest takeaway for the average reader is a warning that the kind of personal intensity which drives someone to that kind of success is not without cost. Even now, despite the meditation, billions of dollars in the bank and the hard lessons learned from two career crises, Novogratz still feels “considerable pressure to make money”, partly because of a lifestyle which involves the ownership of private jets and celebrity restaurants. And with his current status as a microcelebrity in the cryptocurrency world, it’s not as if the story is necessarily over yet.

Separately, following a 33% drop in its M&A revenues in the first nine months of this year compared to last and the ejection of the head of its investment bank, Bank of America is doing some very big hiring. The Financial Times Michael Koder, head of the corporate and investment bank, has been given permission to, ‘recruit up to 50 managing directors, and a number of mid-level staff to support them.’

It may be a while before the new hires make much difference. Former head of the business, Christian Meissner, famously said that building an M&A business takes three to five years once the right people are in place.

Meanwhile …

Presenting at a conference, Morgan Stanley’s investment banking head Ted Pick said that fixed income trading was “a little quieter” in October than in Q3, with equities “holding up well” and capital markets activity very much subdued, particularly by Asian clients. (Financial Times)

Alexander Friedman has, after several months of pressure following the Tim Haywood scandal, resigned as CEO of GAM (Financial News)

As Davos draws near, the tricky issue of what to do with Russian industrialists subject to US sanctions raises its head. Three prominent oligarchs (including Oleg Deripaska) have been gently told they aren’t invited (FT)

A somewhat inelegantly phrased letter from the European Parliament to Mario Draghi summarises their recommendations to be Europe’s top banking supervisor; the committee responsible praises the “experience” of Andrea Enria while noting “the importance of ensuring gender balance” as an advantage for Sharon Donnery. Ms Donnery also has experience; Mr Enria decided he would rather not comment. (Bloomberg)

JP Morgan’s philanthropic arm is attempting to replicate past successes in urban regeneration in Detroit by putting $30m into projects in the Greater Paris and Seine-Saint-Denis regions. (Business Insider)

Credit Suisse’s quarterly reporting has been a consistent headache for analysts for years because of its policy of reporting the official numbers, then a set of “core” numbers for businesses it doesn’t want to close down, and then a set of “adjusted” numbers which take out restructuring and legal costs. Starting next year, things get easier as the restructuring and legal expenses are now small enough to not need adjusting (Finews)

The corporate governance code for German-listed companies is getting significantly tougher on executive compensation. This is unlikely to directly affect banks (who have their own even tougher Europe-wide compensation regulations) but it’s an indication of the climate in one of the largest markets (FT)

CME Group has confirmed that it will be moving BrokerTec, the repo trading platform it bought with its acquisition of Nex, to Amsterdam in order to be ready for Brexit. (Bloomberg)

The Bank of England has launched two challenges – one for people who generally use cash to try to live in the cashless economy for a week, and one for card payers to spend a week paying cash for everything. They want consumers to keep diaries of how they cope, to get some insight into how people interact with the payment system. (Finextra)

And if you’re staying late at the office, things might be getting a bit more competitive for that takeaway order – Uber Eats intends to triple its workforce in Europe to compete with Deliveroo and Just Eat (Bloomberg)

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Cognizant is at an exciting phase in Asia Pacific. Here’s what’s driving demand for its services

November 7, 2018, 1:17 am

≫ Next: Space Executive opens Hong Kong office as part of ambitious global expansion plans

≪ Previous: Morning Coffee: Ex-Goldman Sachs partner on the personal damage inflicted during his finance career. Bank of America’s wild hiring spree

Cognizant is at a significant growth phase in Asia Pacific, buoyed by the region’s early adoption of new technology.

Hemant Tantia, Head of Banking and Financial Services – Market Enablement in APAC at Cognizant, says, “Asia Pacific has been a growth engine for our company and is one of our fastest growing regions.” Hemant says that clients in Asia Pacific embrace digital technology much faster than in many other places, making this an exciting market. “Companies here are more open to new technologies. This encourages companies like Cognizant to pilot new tech and our employees working here get to work on those cutting-edge technologies ahead of people in other regions. This is a huge motivating factor for our teams,” he says.

Cognizant, which has a reputation for being at the forefront of new solutions, is currently exploring Artificial Intelligence (AI) in banking in the Asia Pacific market, particularly to combat financial crime and money laundering.

One solution it developed for a large multi-national Banking & Financial services firm’s credit card division, which used data analytics, AI and machine learning to understand new fraud patterns there by increased the fraud capture rate by 30% and reduce the rate of false positive i.e. legitimate transactions wrongly declined by almost 100% . Another area in which Cognizant is active is the development of open banking Application Programming Interfaces (API).

The company is also actively developing robotic process automation in banking, under which manual processes are automated. In some case, Cognizant does not charge clients for this service, but instead takes its fee from a share of the cost savings the company makes as a result of its solution.

The fintech landscape is evolving rapidly, and one technology that Tantia thinks companies should be paying particular attention to is blockchain. “Blockchain has the potential to streamline operations and reduce costs, all while opening new revenue opportunities. While it has its current limitations in terms of scaling, the underlying fundamentals of this technology are very strong,” he says.

“Most tier one banks are still in a proof-of-concept phase and are waiting and watching, but blockchain is here to stay. If banks do not adopt it, they will end up being laggards because the advantages of blockchain brings are far reaching.”

According to Tantia, banks today are looking for end-to-end solutions and Cognizant can drive that. “I think Cognizant has gone much further than our competitors in terms of our solutions, our vision and how we integrate digital topics, linking data and analytics,” he says. “That Cognizant is the youngest company among all of its key competitors, yet our absolute and percentage revenue growth is industry leading, is testament to our leadership.

Tantia describes himself as a boomerang employee: He came back to Cognizant after a stint in private banking.

He first worked at Cognizant between 2003 and 2010, before leaving to work for a leading global bank, based out of Singapore. But in 2016, he says he felt “pulled back” to Cognizant.

“Cognizant’s executive management is very young and dynamic, not just in age, but also in thought. Their outlook is ‘next generation’, they think ‘fit for future’, and when they have to turn the ship, they do it relatively quickly,” he says.

Tantia says that Cognizant’s unique ‘two-in-a-box’ strategy, where global and local teams work in tandem, with decision making done at both levels, is a highly effective amalgam of the organisation’s global strategy and local execution excellence. He says, “ The two-in-a-box model with a market-facing team and a delivery team working together helps deliver the best fit solution for clients. It brings thought leadership from a global level, and is executed at a local level.”

As a result of the strong growth Cognizant has seen in Asia Pacific, the company is looking to recruit new talent, particularly in the areas of data analytics and AI. “The demand is much greater than the supply and we are trying to meet it through a combination of internal training, lateral hiring, as well as looking at available global talent.” Tantia says.

The company is also looking for people who can help banks with system integration for new fintech solutions, often in niche areas. “We are poised for significant growth in this area in Asia Pacific, and we have a number of open positions,” Tantia says.

Tantia says that Cognizant provides a very good platform for people to build successful careers. “Cognizant empowers you to do what you want to do. If you have the right mindset and you want a challenge, this company is an ideal fit for you,” he says.

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Space Executive opens Hong Kong office as part of ambitious global expansion plans

November 7, 2018, 1:33 am

≫ Next: Bank by bank, here’s where the hiring and firing will happen next

≪ Previous: Cognizant is at an exciting phase in Asia Pacific. Here’s what’s driving demand for its services

Specialist recruitment agency Space Executive has opened an office in Hong Kong as it looks to bring its boutique service to a new market.

The agency is one of the fastest growing multidiscipline recruiters in Asia, and has expanded to 25 staff, generating revenues of more than SG$8 million a year, since it was first launched just over 3 years ago.

While Space Executive already has a considerable international reach, placing candidates in 16 different countries last year, the opening of the Hong Kong office marks the first time it has had a base outside of Singapore.

Marek Danyluk, Managing Partner at Space Executive, says: “Hong Kong will have the same growth agenda as Singapore: we want to outperform the market and raise the bar when it comes to recruitment as a service and partnership.”

As part of its ambition to offer more holistic coverage in Asia, the multi-award-winning firm aims to have 15 to 20 experienced recruiters working out of Hong Kong by December next year. But Space Executive’s ambitious growth agenda does not end there, with the firm also planning to open offices in Tokyo in 2019 and London in 2020, before launching in the US.

Despite its global expansion plans, Danyluk is clear that Space Executive will remain true to its original vision of being a specialist recruitment boutique. He explains: “Being boutique enables us to have more touchpoints with the client, and provide a more consultative service, rather than a transactional one.

“We want to build the business as a boutique in each country, but with a footprint globally.” The firm focuses on the interrelated disciplines of finance, technology, change and transformation, marketing, and legal and compliance. “We believe that globally, these are the verticals that are going to continue to be in high demand for highly skilled people,” Danyluk says.

“Ultimately, the goal of the business is to have 150 people around the world within the next six-and-a-half years, and to become known as the market-leading boutique agency supporting mid-to-senior executives across the globe.”

Another motivation behind its expansion is that Space Executive is keen to help candidates access opportunities in different geographies as their careers progress. “We believe very strongly in the mobility of talent, and we want to make sure that we are giving our candidates opportunities globally, rather than just in country,” Danyluk says.

“The world is changing, and people are much more mobile, especially at the senior end and we want to be in a position to support that mobility.” Hong Kong was an obvious place in which to start this expansion.

Danyluk explains: “Hong Kong is an exceptionally dynamic market and it is experiencing significant growth. It is also the gateway to China, and we view the China market as very much the future.

“We are seeing an increasing upward trend in Hong Kong in terms of embracing all things digital. The financial services sector is buzzing again and, for digital, Hong Kong is the location of choice.” Space Executive is excited to have recruited Nick Lambe as managing director of the Hong Kong office.

Lambe has an impressive track record, being the youngest person to be promoted to managing director at recruitment consultancy Morgan McKinley in 2010, where he went on to be a top five global biller, while running a team of more than 20 consultants. He also headed up the top-performing office in Asia in 2014, bringing in around HKD50 million in revenue.

Danyluk says: “There are specific nuances with hiring a leader in Hong Kong. They have to have a very deep-dive understanding of the Hong Kong market, which has its own complexities, and it is imperative they also understand Asia.

“Nick has one-and-a-half decades of experience, successfully leading businesses in Hong Kong at the highest level. By proxy of that exposure, he is a very rare find. His track record speaks for itself.” The ambitious growth plans are made possible because of the way Space Executive is funded.

Alongside the recruitment business, there is an incorporated venture capital business, called Space Ventures, into which a proportion of Space Executive’s profits are reinvested.

Danyluk explains: “Initially, the fund was to reinvest profits from Space Executive, rather than pay out dividends to the partners, so that the company had funds available when it wanted to expand.

“Then, we thought it would be a valuable proposition to the team to allow staff to come in on the same investment, so we conceptualised Space+ which enables people to invest their commission into the VC.”

The VC, which predominantly invests in fintech opportunities, operates as a five-year investment, after which staff can either cash out or reinvest their money.

Danyluk says: “We take the fact that we are investing people’s commission very seriously. The group also puts a lot of resource and infrastructure behind the fund to make sure it is managed very effectively. ‘It is something that is pretty unique in the market,” Danyluk says.

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Bank by bank, here’s where the hiring and firing will happen next

November 7, 2018, 5:38 am

≫ Next: Former Cowen execs teaming up to launch new U.S. prime brokerage business

≪ Previous: Space Executive opens Hong Kong office as part of ambitious global expansion plans

The redundancies have begun. As we reported yesterday, Berenberg has suddenly pulled the plug on its expansion plans and is dumping up to 20% of its staff in London. BNP Paribas has been at it too. Others will almost certainly follow. So who will survive until 2019? And who is top of banks’ shopping lists as we move towards a whole new year? Here’s how the land lies in early November.

Bank of America: Bring on the senior investment bankers

Bank of America is all about one thing right now: top investment bankers. The Financial Times reports today that BofA plans to hire “up to 50” managing directors (MDs), plus all the mid-level staff needed to support them.

It certainly needs to do something: revenues in BofA’s M&A business fell 33% year-on-year in the third quarter. However, BofA has already been adding M&A muscle: after losing 28 MDs earlier this, a spokesperson told the Wall Street Journal last month that it had already hired 49 to replace them. The implication is a complete refresh of the investment banking business. During BofA’s third quarter investor call, CFO Paul Donofrio said the investment bank needed to “renew” its focus and “re-energize” its teams.

Meanwhile, BofA’s London office is afflicted by the opening of the new Paris office early next year. Various senior people have already been transplanted and more are likely to follow. As the bank compensates for the cost of the new French operation, there are fears that BofA could cut spending (and heads) in London.

Barclays: All about electronic trading

As we reported last week, Barclays is said to be urgently attempting to fill vacancies on its London rates desk before the year is out. However, this is just one gust in the bank’s hiring storm. Yet again Barclays has been the big hirer of the year.

Between January and September 2018, Barclays said it made 275 external hires to its markets business. This followed big hires the previous year too. Since the start of 2017, Barclays has added 50 managing directors to its markets business and 33 to its banking (M&A, ECM and DCM) business. It’s also been investing in technology and in data science. Barclays has even been investing in equity researchers.

So what next? Barclays’ big focus now is electronic trading and digitalisation. During the bank’s third quarter call, Jes Staley said Barclays began investing in a program to overhaul its electronic trading business in mid-2016. After completing the upgrade to rates trading he said the bank had seen a 10x increase in the amount of trades being placed electronically, and that it had just rolled out a new electronic trading program for equities to match this. “It’s a combination of getting the right people there, giving them the support of senior management,” Staley said.

BNP Paribas: Digital transformation and quiet cost cutting

As we noted last week, BNP Paribas is not meeting growth targets in its corporate and investment bank. It’s already been quietly cost cutting (150 jobs have gone according to insiders) and there are likely to be more cuts to come.

During BNP’s third quarter investor presentation, CFO Lars Machenil said the bank’s strategy for 2019 will be all about generating revenues that are growing faster than costs: “….Going forward, the priority for management will be to have positive jaws in 2019…basically focusing on the costs and delivering the positive jaws.”

BNP’s 150 redundancies suggest it’s not afraid of cutting jobs in the front office, particularly it seems in fixed income trading. However, it’s back office employees at the bank who should be more afraid: the bank’s main lever for cost cutting is process automation. BNP says it’s already automated 120 process and has identified a further 200 that are ripe for automation in future. These include client on-boarding and credit processing. Jobs in these areas are most likely to disappear.

Citi: Combining corporate and investment banking with capital markets origination

Citi’s big focus now is restructuring rather than recruiting. The bank is in the process of combining its corporate and investment bank with its capital markets origination (equity capital markets and debt capital markets) businesses. During the third quarter investor call, CEO Mike Corbat said the bank is “integrating advisory services with capital raising.” This week, it named Philip Drury head of the combined business in EMEA.

The new structure may take some bedding in. The Financial Times noted that Citi moved late to combine the two units after a painful merger between its corporate and investment banks in 2008, when its investment bankers treated its corporate bankers like underdogs. At the time, Citi executives told the FT the new move was more about growth than cost cutting – although it some fallout seems likely as the businesses are combined.

The stars of Citi this year are likely to be its macro traders. The bank has been hiring in FX and U.S. government bond trading and departing CFO John Gerspach highlighted the bank’s strong third quarter performance in G10 rates and G10 FX. In equities the bank has been building its Delta One desk.

Credit Suisse: Equity derivatives praised, questions about cost cutting elsewhere

If you work at Credit Suisse now, you want to be in equity derivatives. During the third quarter, equity derivatives revenues at the Swiss bank were up 70% year-on-year and CEO Tidjane Thiam was effusive in his praise for the individuals responsible. “We’ve really got a first-rate team now driving our equity derivatives business,” said Thiam during the bank’s third quarter call, before going on to praise global head of equities Mike Stewart and Ross Mtangi, the U.S.-based head of the exotics business. Stewart and Mtangi seemingly have a mandate to hire: Hippolyte Agkpo, the former global head of quant strategies and exotic derivatives trading is joining in London after leaving Bank of America in New York.

If equity derivatives are thriving at Credit Suisse, the same cannot be said for the rest of the investment bank, which had a terrible third quarter. The global markets division has cut operating expenses by nearly 20% since 2015 and is on track to achieve its goal of $4.8bn in operating expenses per annum. However, following a third quarter loss of CHF96m, the suspicion is that there will be more global markets job cuts to come.

Deutsche Bank: Infrastructure cuts coming next

Deutsche Bank is targeting €23bn in costs for 2018 and €22bn for 2019. In theory, cuts to the front office of its investment bank are over. During the bank’s third quarter call, CEO Christian Sewing said Deutsche has completed the restructuring of its front office in line with its original target and will now be chopping back office and support jobs instead. “Further workforce reductions, as we said in July, are now more focused on infrastructure and support functions. This enables us to now focus on profitability and returns also by continuously focusing on client activities,” said Sewing. Deutsche’s investment bankers now have a mandate to chase clients and to focus on growing revenues. However, any additional hiring – unless it’s at the junior level – is unlikely.

Who stands to lose their jobs as DB pursues the additional €1bn+ in cost savings? Deutsche Bank CFO James von Moltke said the bank’s attempt to cut infrastructure costs will be focused on, “the efficiency of delivery, the technology infrastructure,” among other things. So, technologists at DB may be in the firing front line, again.

In reality, DB may also need to make more cuts from the front office of its investment bank. Costs consumed nearly 95% of revenues in the third quarter.

Goldman Sachs: Everything on hold until review of business lines is over early next year, quietly hiring investment bankers

Goldman Sachs is in a sate of flux under its new CEO and new CFO. Incoming CFO Stephen Scherr says the bank is, “reviewing all of our businesses front to back to ensure that our people and our financial resources are optimally deployed.” Scherr said this week that Goldman is scrutinizing the amount of capital it allocates to each division. “We’re looking at . . . what is the revenue potential for these businesses and against that looking at what the expense base is . . . and then coming to an assessment very clinically on whether that business is meeting its cost of capital.” The fear is that the review will end up with cuts to the under-performing fixed income currencies and commodities business.

Despite the review, Goldman has an ongoing growth plan which Scherr reiterated in a presentation this week. Like Barclays, the bank is chasing a perceived opportunity in automation and electronic execution – and, indeed, has been hiring (and losing people) here.

However, Goldman has also been quietly adding investment bankers too. As we noted in September, then incoming-CEO David Solomon (himself an investment banker by trade) seems to have been focusing on adding managing directors to the investment banking division. Between January and June, Goldman said it had added 20. This week Scherr said Goldman added another 20 between June and September. MDs who don’t want to join BofA can always try Goldman instead.

J.P. Morgan: Hiring investment bankers and investing in technology

J.P. Morgan’s plans for its investment banks boil down to two things: technology and bankers. CFO Marianne Lake said the firm is “investing in technology and bankers” when the third quarter results were released. Headcount in the corporate and investment bank rose by 5% in the three months to September, an increase of 2,652 people.

Who were all these hires? Some are likely to have been graduate trainees, but beyond technology and bankers, Lake didn’t say. Three years ago, Daniel Pinto, head of the investment bank promised to hire “dozens” of M&A bankers. J.P. made several senior M&A hires from Morgan Stanley in May. It’s also been busy building out the technology function in its corporate and investment bank under Mike Grimaldi.

Morgan Stanley: Technologists wanted to sit on the trading floor

Morgan Stanley’s mantra has long been that the front office its investment bank (its salespeople, traders and investment bankers) is just the right size. Instead, the bank’s focus seems to be on hiring technologists and quants/strats.

During Morgan Stanley’s third quarter investor call, CEO James Gorman said: “We’re continuing to invest across all of our technology platforms, in automation, in AI and big data or cloud computing, digital, our whole digital initiative across wealth management expansion across the asset management businesses and building out new platforms, raising new funds. All of these are investments that we’re making continuously and we’ve been hiring talent.”

Morgan Stanley has been revamping its offices to help accommodate all these new hires. The bank is redesigning its offices with brown leather sofas, stone floors, and pouffes to appeal to “the next generation of the best and brightest.” 9,000 “seats” have been upscaled so far (in New York, Houston, Frankfurt, Chicago, Glasgow, Budapest, London, Mumbai and Bangalore) and more are coming soon. “Our traders need to be with our techies,” said Rob Rooney the bank’s head of technology. “You’ll see a very different trading floor in five years time than you see today.”

UBS: Going for growth in M&A, ECM and the Americas

UBS is engaged in a very small amount of hiring. In the third quarter, the investment bank added just 179 staff (including graduate trainees), so it’s not exactly boom-time. In London, the Swiss bank is busy relocating 64 staff to continental Europe as part of its Brexit preparations. It’s also been hiring for its financial sponsors team and its consumer team in London. Following the exit of Andrea Orcel, the new heads of the investment bank – Robert Karofsky and Piero Novelli – want to grow M&A and equity equity capital markets revenues. “Talent and technology are the key inputs,” Novelli told Financial News – so there may be hiring ahead.

UBS’s ongoing focus, however, is the Americas. CEO Sergio Ermotti noted that the American investment banking business put in a “notable outperformance” in the third quarter. This followed the bank’s earlier declaration of a “very aggressive plan” for Americas expansion and it intention to hire “old fashioned bankers'” with relationships there.

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Former Cowen execs teaming up to launch new U.S. prime brokerage business

November 7, 2018, 5:57 am

≫ Next: If you work in cash equities, your options will soon be limited

≪ Previous: Bank by bank, here’s where the hiring and firing will happen next

Three former managing directors who recently ran Cowen’s U.S. prime brokerage business have all popped up at the same firm. Douglas Nelson and brothers Michael and Nicholas DeJarnette have been hired by trade execution and clearing specialist INTL FCStone to launch the Fortune 500 company’s first-ever prime brokerage business. The trio expects to add at least a dozen new members to its team across the U.S. in the coming months.

Nelson and the two DeJarnettes have been working with each other since 2005. They joined Cowen in 2017 following its $100 million acquisition of Convergex Group, where Nelson was the CEO of its prime services division for over a decade. Nelson and Michael DeJarnette were named U.S. co-heads of prime brokerage at Cowen at the completion of the acquisition but left the firm alongside Nicholas in June of 2018 after only a year on the job. They started at INTL FCStone last week following four months of gardening leave.

Known mostly for its role in commodities and energy markets, FCStone is banking on the trio to leverage their relationships with hedge funds and other institutional clients to launch a full-scale prime brokerage offering. Nelson pointed to FCStone’s existing infrastructure and the industry’s gradual transition to a cloud-based service model as part of the rationale behind the move. He said the new unit will look to bring on 12-15 new hires at its base in Atlanta as well as in New York and along the West Coast. The hiring will be split across sales and trading operations.

Prime financing execs have done quite a bit of moving around over the past few years as some banks looking to reduce their leverage have cut back on the capital-intensive yet potentially highly lucrative business. Credit Suisse and Deutsche Bank have been scaling back their prime brokerage units while BNY Mellon, Standard Bank and TD Securities have been launching new offerings. Meanwhile, Bank of America has completely retooled its prime services division this year following an internal investigation into alleged sexual harassment that coincided with at least nine departures. Other financial services firms like Cowen and FCStone are now looking to grab market share in a business that has been historically dominated by traditional banks.

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If you work in cash equities, your options will soon be limited

November 7, 2018, 10:37 am

≫ Next: The six most interesting new partners at Goldman Sachs

≪ Previous: Former Cowen execs teaming up to launch new U.S. prime brokerage business

The rise of quant-driven hedge funds, recent advances in technology and new regulations have taken a heavy toll on people working in cash equities at investment banks over the last several years. The bad news is that things are bound to get much worse, unless of course you work at one of a handful of firms.

It’s no mystery that the traditional high-touch sell-side brokerage model is perilously close to becoming extinct. U.S. cash equities commissions fell by 50% between 2009 and 2017, according to a new report from McKinsey & Co. Then there’s the effects of MiFID II, which has contributed to a 30% decrease in equity commissions in Europe in 2018 alone. Though the regulations aren’t applied in the U.S., McKinsey says similar pain points are being felt. Hedge funds and investment managers are “unbundling” even though they’re not required to.

Still, there is some hope left for those working in cash equities and research, though the transition will be painful for many. McKinsey believes investment banks that aren’t at the top of the market will be consolidated or eventually exit cash equities altogether, leaving only a select few to soak up all the remaining business. Those that remain will be the banks that have been hiring and empowering high-end coders rather than traditional sales and research staff, according to the report.

“It is no coincidence that the three leading sell-siders increased their cumulative cash equities revenue share among the top ten firms by almost seven percentage points between 2014 and 2016; and it is reasonable to expect that they will continue to put space between themselves and the rest of the pack,” the authors wrote.

So which investment banks will be left standing following the cash equities apocalypse? McKinsey isn’t saying, but the list would likely begin with Morgan Stanley and Goldman Sachs, the two firms currently sitting atop the global equities league table. Analysts from Buckingham Research predict the two banks will only widen their lead, noting they should be “outsized beneficiaries” of equities strength in the fourth quarter of 2018.

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The six most interesting new partners at Goldman Sachs

November 7, 2018, 1:27 pm

≫ Next: DBS’s profits are soaring, so why is pay falling?

≪ Previous: If you work in cash equities, your options will soon be limited

Goldman Sachs just announced its latest partner class, guaranteeing a $1 million salary and all the other perks that come with the title to 69 employees, down from 84 two years ago. Unsurprisingly, well more than half (48) work in sales and trading or investment banking. A record 26% are women, which is equally unsurprising considering new CEO David Solomon’s pledge to make the upper rungs of management more gender diverse. Below are six of the most impressive new partners.

Carl “Boe” Hartman, Technology, New York

Only three people from the bank’s technology division made partner, but what makes Hartman so unique is that he works for Goldman’s retail arm, GS Bank USA, which operates its online lending platform, Marcus. Promoted in 2017 to chief information officer of GS Bank, Hartman may be the first retail-focused employee to be named partner. Marcus launched only two years ago. Hartman is a retail lifer, spending a decade at Capital One before moving to Barclaycard. His appointment shows just how serious Goldman is taking its new retail venture. In a May blog post in which he shared advice he would give to his former self, Hartman wrote: “Write your ideas down — most are horrible, but a few are pure gold (and some will become part of this thing called Marcus by Goldman Sachs).”

Niharika Cabiallavetta and Beat Cabiallavetta, Securities, London

As insiders suggested to us earlier in the week, London-based Niharika Cabiallavetta, a credit salesperson who’s been at Goldman since 2005, made partner. What we weren’t told was that her husband, Beat Cabiallavetta, would achieve the same status. A member of the bank’s special situations group, Beat also joined Goldman in 2005 and was named a managing director in 2013, alongside his wife. This is the first time in London that Goldman has made two partners…partners. It should be a joyous evening around the Cabiallavetta household tonight.

Eric Murciano, Securities, London

Insiders also tipped us off that Murciano, Goldman’s co-head of emerging markets and FX sales, would be one of several fixed income execs to make partner while the equities team was relatively shunned. However, tipsters also suggested that Adam Crook, Murciano’s co-head, could also get the call. He did not. Murciano has been with the bank since 2004. Crook joined in 2008 and was named managing director in 2014.

Earl Hunt, Securities, New York

Hunt may not be the youngest partner Goldman has ever named (he graduated from Brown University in 2003) but the speed with which he climbed Goldman’s hierarchy is eye-opening. He has only been a managing director for 11 months after being named as part of the 2017 class. He left Citi in 2015 to join Goldman’s distressed debt team as a vice president and climbed all the way to partner in three years (though it’s worth noting Goldman doesn’t use ‘director’ titles). He started with the bank at a particularly opportune time as Goldman’s distressed debt trading desk saw significant turnover in 2015 following a difficult stretch.

Heather Kennedy Miner, Executive Office, New York

Goldman’s head of investor relations, Miner is the only member of the bank’s executive office to make partner in 2018. She has worn many hats. Miner started at Goldman as part of its corporate treasury team in 2003, making MD in 2006. She then spent more than eight years in investor relations before heading up Goldman’s strategic advisory solutions team within the bank’s asset management department. When Edith Cooper retired in 2017 as the head of HR, Goldman tapped Dane Holmes, then-head of investor relations, as her Cooper’s replacement. The bank then pulled Miner back to IR to head up her old department. Miner’s career arc shows just how difficult it is to make partner as a non-revenue generator. She waited 12 years from the time she was named managing director, compared to just one year for Hunt.

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DBS’s profits are soaring, so why is pay falling?

November 7, 2018, 1:59 pm

≫ Next: Meet the man now spearheading the hottest new tech team at Standard Chartered in Hong Kong

≪ Previous: The six most interesting new partners at Goldman Sachs

DBS is spending less on its average employee that last year, even as its profits rise and its local rivals UOB and OCBC continue to boost compensation, according to figures calculated from its third-quarter results.

Staff costs per head at DBS – total employee expenditure (such as salaries and bonuses) divided by total headcount – fell by 1.5% ($1,332) year on year to reach $90,128 for the first nine months of 2018.

The DBS earnings report doesn’t address the drop in average remuneration, but it does state that the final incorporation of ANZ employees, which took place in February, has affected its year-on-year costs. While taking on thousands of ANZ staff – DBS acquired the Asian wealth and retail operations of the Australian bank in 2016 – has obviously boosted overall expenses, one insider at the bank told us that it’s also helped to push down salaries per head.

Although DBS has retained many of ANZ’s well-paid private bankers and priority bankers, the bulk of the transitioning ANZ staff work in less lucrative retail and support roles. Moreover, the ex-ANZ workforce also includes employees in China and Indonesia, not just people in the high-cost markets of Singapore and Hong Kong.

The decrease in average comp at DBS is in contrast to the year-on-year rises at UOB (up by 10.4%) and OCBC (4.5%) for the first nine months, which were partly driven by the recruitment of expensive technologists amid a tight local labour market in tech. The two smaller Singaporean banks still have a way to go to catch up to DBS on the pay front, however. Despite pay inching down, DBS still spent just over $90k per staff member – compared with $71,633 at UOB and $65,514 at OCBC.

DBS, whose year-on-year profits rose 34% in the year to end-September and 76% for Q3, has larger non-retail front-office operations than those of its rivals, helping to explain its salary advantage. If you’re looking for a front-office job at DBS, you might want to try cash management. An 8% rise in income in the firm’s institutional banking division (to $4.26bn) was “led by growth in cash management”, according to the bank’s Q3 report.

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

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Image credit: Tomatopicturesm Getty

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Meet the man now spearheading the hottest new tech team at Standard Chartered in Hong Kong

November 7, 2018, 2:00 pm

≫ Next: Morning Coffee: UBS invited junior bankers to make their jobs less mundane. Goldman partners reflect cultural shift

≪ Previous: DBS’s profits are soaring, so why is pay falling?

Standard Chartered has named Chris Ashe as head of engineering for the new virtual bank that it plans to launch in Hong Kong. His hire is a further sign that Stan Chart is staffing up the unit, which we understand is currently called Project Dragon, in anticipation of it receiving the regulatory green light.

Ashe has left his role as engineering head at UK-based online financial services provider Tandem Money and is now based at Stan Chart in Hong Kong, according to his online profile. A spokesperson for Stan Chart declined to comment on the appointment.

In a major shakeup of Hong Kong’s much-maligned retail banking sector, the Hong Kong Monetary Authority is granting licences to virtual banks – which operate purely online and don’t have a physical branch network – for the first time. Stan Chart, along with 28 other firms, submitted applications at the end of August, the first batch of which are expected to be approved by the end of the year.

Stan Chart “set up a new entity for its virtual bank” in August and appointed Deniz Güven as its chief executive officer. Güven, who joined Stan Chart in May 2017 as global head of design and client experience for retail banking, is leading a team “to build a new banking model”, according to an August statement from the bank.

A source close to Stan Chart told us in August that the firm, “has been recruiting quite aggressively for the virtual bank, so it can hit the ground running if the HKMA gives it the go-ahead”. The hiring, which is ongoing, includes jobs in technology, risk and compliance.

It isn’t surprising that Ashe was recruited externally rather than from within Stan Chart’s large tech team. “For banks as large as SCB in Hong Kong, it’s probably easier to hire new developers from the market rather than transferring people from other teams into virtual banking,” Sid Sibal, associate director of banking and financial services at recruiters Hudson in Hong Kong, told us. “Their existing technologists probably lack knowledge in virtual banking because it’s different from traditional e-banking.”

Other London techies, especially those working for online banks like Tandem, may follow in Ashe’s footsteps. The UK is a potential source of tech talent for Stan Chart and other Hong Kong virtual banks, because its online-only banking system is more mature, says a Hong Kong-based IT recruiter. Ashe joined Tandem in 2015, following a four-year stint as an architect and technical lead at Commonwealth Bank in London, Seoul and Sydney.

Stan Chart is believed to be the only mainstream bank to have applied for a stand-alone virtual banking licence. Other applicants include WeLab and HKT, as well as an alliance between Australia’s Airwallex, Bank of East Asia, and mainland firm Sequoia Capital China, reports the South China Morning Post. Stan Chart hopes that having a separate local digital platform will help it break away from its global and legacy technology systems and allow it to win new customers by working more closely with startups, according to Reuters.

While Stan Chart is looking to cut costs (and managerial headcount) in Singapore and Hong Kong, most of its business-facing technology jobs are safe from the axe, say recruiters.

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Morning Coffee: UBS invited junior bankers to make their jobs less mundane. Goldman partners reflect cultural shift

November 7, 2018, 11:56 pm

≫ Next: From a Software Engineer to Head of Merchant Sales, here’s how MBA from CUHK helped me to succeed

≪ Previous: Meet the man now spearheading the hottest new tech team at Standard Chartered in Hong Kong

It’s not easy to get a job as a junior in an investment banking division (IBD), preparing the ground for M&A pitches or capital markets deals. But when you arrive, you may be surprised. “As an analyst, you spend 75% of your time on PowerPoint, making presentations,” one J.P. Morgan analyst told us last year. “You’re making presentations for the same market and each time you build a new presentation, you’re spending a lot of time redoing similar slides.”

If that sounds laborious and slightly pointless, it is. If it sounds like analysts might complain about it, they do. People quit because of it. “A lot of the people who go into banking are very intelligent but the work is just not very stimulating and doesn’t use their intelligence properly,” one told us in September.

Banks are trying to do something about this. Goldman Sachs and J.P. Morgan are busy trying to automate elements of the initial public offerings for equity capital markets deals and Goldman says it is “building a technological solution around a deal life cycle.” Now, UBS has beem trying to keep its junior bankers happy by asking for their opinions on what to automate.

UBS juniors’ answers were illustrative of the pain points in the young banker’s day (and night). They said they want to use artificial intelligence to automate building financials models, creating term sheets (a document outlining the material terms and conditions of the deal) and constructing Pitchbooks in PowerPoint. While this might sound like most of a junior banker’s job, juniors in the past have insisted that this kind of automation will free then up to do more tailored and deal-specific analysis instead.

UBS seems genuinely to want to implement its juniors’ solutions. In August, it hired Ronald Jansen, the former head of IBD strats at Goldman Sachs, who was at the forefront of transforming Goldman’s deal processes. Sam Kendall, who runs investment banking at UBS has begun offering “pizza lunches” to encourage juniors to come and talk to him. “If we can release time from bankers to just think, sit there with a blank sheet of paper to think about their clients’ problems, then maybe we’ll move the ball forward a little bit,” Kendall told Business Insider.

Separately, Goldman Sachs’ partner list is out and in the new age of transparency under CEO David Solomon, the firm has provided a far more detailed breakdown than ever before of exactly who’s on it. – 29% are millennials, 26% are women, 20% are Asian. We’ve pulled out some of the more interesting names from the list of 69 here. What’s also interesting, though, is that it’s getting easier to make partner at Goldman if you’re not a Goldman Sachs lifer. The last time the firm named new partners, in 2016, 75% had joined the firm as either an analyst or an associate. This year, that’s down to 67%, which doesn’t even include the 15 outsiders Goldman has hired directly into partner roles in the past two years.

Meanwhile:

Barclays is cutting 134 technology infrastructure jobs in the UK and adding 50 in India. (Reuters)

David Solomon is emotional about the 1MDB scandal: “It is obviously very distressing to see two former Goldman Sachs employees went so blatantly around our policies and so blatantly broke the law.”

(Financial Times)

Goldman Sachs hired Thomas Doyle as head of single stock synthetic products group distribution in EMEA and David Cornish as head of quant distribution. (Financial News)

Carmignac Gestion, one of France’s best-known fund managers, stands accused of paying its employees dividends in Luxembourg rather than a salary in France, to reduce their tax burdens. (Financial Times)

Hedge funds had their worst October in seven years. (Financial Times)

Deutsche Bank needs to be afraid of the Democrats. (Axios)

McKinsey & Co says investment banks made revenues of $275bn last year, down from $345bn in 2007. “The banking sector’s price-to-book ratio was consistently lower than that of every other major sector over the 2012-17 period — trailing even relatively sluggish industries such as utilities, energy, and materials.”(Financial News)

What people get wrong about the super rich. (BBC)

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From a Software Engineer to Head of Merchant Sales, here’s how MBA from CUHK helped me to succeed

November 8, 2018, 1:31 am

≫ Next: COMMENT: Buy-side traders think far too highly of themselves

≪ Previous: Morning Coffee: UBS invited junior bankers to make their jobs less mundane. Goldman partners reflect cultural shift

Abhishek Vats, Head of Merchant Sales and Acquiring at Visa Singapore, was keen to move from an engineering role into a business-focused role.

He was working at Infosys as a senior software engineer writing codes for American Express, and he became increasingly interested in the purpose behind these codes.

He remembers: “I knew what I was doing because I was adept at the technical side of the business, but I did not understand the bigger picture of how it was impacting American Express.”

He further deliberated, “One thing that was clear to me was that besides having understanding of the business it is equally important to have a multi-cultural perspective of the business for making sound decisions”

His curiosity spurred him into exploring a Master of Business Administration with a global focus. He considered programmes at a total of eight different universities, both in Asia and in the US, before settling on the Chinese University of Hong Kong.

“I wanted to work in Asia-Pacific for the foreseeable future as I could see it was a growing market with great future prospects. The CUHK MBA offered a good balance between the eastern and western world.” he says.

He further adds “I was particularly impressed by the combination of global outlook of the MBA program and the multi-cultural student mix.”

CUHK’s MBA had a strong academic pedigree, ranked 2^nd in Asia and 14^th in the world in the Financial Times Top MBAs for Finance 2017 ranking.

Another aspect of the programme that appealed to Vats was its focus on leadership and entrepreneurship.

“Gaining the industry knowledge and learning how to think like an entrepreneur has helped me in everything I have done over the years since my MBA.”

“The content of the course also prepared me to successfully lead teams across different countries and backgrounds in this digital era” he adds

Vats was also attracted by CUHK’s exchange programme, under which students can spend time studying at partner universities. He spent his final semester at the National University of Singapore.

“It was through the exchange programme that I came to Singapore and managed to get my dream career.” he says.

After completing his MBA, Vats landed a job at Rocket Internet in Singapore, where he worked at the e-retailer startup Zalora.

He explains: “When I finished my MBA, I did not want to get into a big firm where my job scope would be limited rather I was looking to contribute to a fast-growing venture. Zalora provided me with this opportunity as the role enabled him to put into practice everything he had learned through his MBA, ranging from analytics to business operations to blue ocean strategy,” he says.

He remembers his journey with Zalora, a start-up comprised of 30 people to becoming one of the biggest ecommerce companies in South East Asia, with more than 2,000 people across 8 countries, when he left.

From Zalora he moved on to payments company Adyen, where he was VP of Strategic Partnerships APAC. He closely worked with some of the biggest tech companies of the world including Uber, Netflix, Google, Expedia and led their expansion into Asia-Pacific markets.

In his current role as Head of Merchant Sales and Acquiring for Visa, Abhishek is driving VISA’s acceptance expansion, ecommerce growth, relationships with acquirers and merchants and contributing to the Singapore’s Smart Nation priorities.

Vats says: “I started doing payments from the merchant side at Zalora, then I moved to the next position in the value chain, which is the acquiring side, at Adyen. Now I am at the top of that chain on the network side at Visa.”

CUHK’s career management centre was also key in helping Vats fulfil his ambitions, and the support they provided to propel his career.

He adds that the career management office’s involvement did not end when he got a job, and even now they still get in touch with him and are always happy to help. “It is a long-term relationship,” he says.

He is under no doubt that it was his CUHK MBA that enabled him to make this progress.

Vats says: “My MBA at CUHK served as great provider of opportunities to learn business and leadership skills and interact with diverse group of people that has helped me go up the ladder.”

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COMMENT: Buy-side traders think far too highly of themselves

November 8, 2018, 1:59 am

≫ Next: Mass exit of most remaining members of Deutsche Bank’s London healthcare team

≪ Previous: From a Software Engineer to Head of Merchant Sales, here’s how MBA from CUHK helped me to succeed

If you’re a trader on the buy-side, at an asset manager or a hedge fund, you probably think you’re something special. After all, everyone wants to work on the buyside; you’ve got the job they’d kill for. This might be the case, but most people have no idea what buy-side trading jobs are like. When you’re in the market, you know that they’re usually occupied by mediocre individuals who like pushing buttons.

Buy-side traders are usually “execution traders.” This means that they execute the trades decided upon by other people. In practice this means clicking on buy and sell buttons and selecting which broker to send the order to. If they’re lucky they might get to make three clicks on their mouse when they place a trade. Impressive? Not exactly. I’ve attended many meetings with analysts, portfolio managers and traders. The traders are always the weakest link: they usually have no clue about the general economy or themes in the market.

As with most mediocrities, buy-side traders are generally incapable of acknowledge their inadequacies. 90% of their job is to copy/paste what brokers send them on Bloomberg and to send it to their portfolio manager, but based on their behaviour you would think they’re George Soros. They all claim to be incredibly busy, but spend their time watching their screens for earnings, events such as non-farm payrolls and on Bloomberg chats. In my experience many have problems processing all this information. They’re only really happy when they’re at an expensive restaurant or bar for broker entertainment – all the better to name drop later.

Which brings me to the worst thing about traders on the buy-side: they are snobs. And like all snobs, they like to look down on people – which, if you’re a trader on the sell-side, means you. Buy-side traders wield their power over sell-side traders like ruthless dictators, and when you work on the sell-side you live in fear of their unjustified complaints. It’s very easy for a buy-side trader to complain about a broker, but when you’re a broker who loses your job or gets your bonus docked as a result, it’s not so funny.

Not that buy-side traders care about their victims on the sell-side. I’ve heard them mocking sell-side traders who’ve been penalized as a result of their unjustified whinging. Senior managers at asset management firms turn a blind eye to their traders’ snide comments because they know they keep brokers on their toes by creating a culture of fear which ensures their firm gets a good deal.

If I sound bitter, it’s because I am. In the past, I have defaulted on my mortgage because of two clients who constantly complained about me. They had no real reason to do so, except that they preferred to deal with my female colleague. Banks are always looking for a reason to cut pay: who cares if 58 other clients think I’m great, they’ll always focus on the two who say otherwise. – Whether it’s justified or not.

Antonio Mullen is a sell-side trader with a grudge.

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Mass exit of most remaining members of Deutsche Bank’s London healthcare team

November 8, 2018, 5:59 am

≫ Next: ‘Trump effect’ scaring off one of Wall Street’s key recruiting cogs

≪ Previous: COMMENT: Buy-side traders think far too highly of themselves

If, like us, you thought that Deutsche Bank’s London healthcare team had been all but eviscerated in June 2018, you might be surprised to learn that were still people left working in it after those mass exits five months ago. However, it now seems that there won’t be people working in it for much longer.

Deutsche insiders say that five other members of the team have resigned in the past month. All are expected to join different banks.

Deutsche Bank didn’t comment on the exits. They are thought to include: Hemant Kapoor, an associate in the healthcare team who moved to London from New York in 2016 and was expected to make vice president soon, but has apparently gone to J.P. Morgan instead; Vahit Allili, a vice president in the healthcare team who’d been with Deutsche since 2015 and is joining Lazard; Nikunj Mall, an associate on the healthcare team who joined as an analyst in 2016 after moving from India (also moving to Lazard); Charlotte Schaefer, an analyst who’s understood to be joining a Canadian private equity fund; and Miemie Strydom, who’s gone to a DaVita International, a company providing dialysis services.

The exits come as Deutsche Bank is trying to grow revenues in its investment banking business after declaring the restructuring of its the front office to be complete. However, with costs accounting for nearly 95% of revenues in the corporate and investment bank in the third quarter, there are suspicions that CEO Christian Sewing will have to make further cuts to senior bankers before the end of the year.

Some Deutsche MD’s suggest “another big cull” is coming in the next few weeks as Sewing cuts heads before bonus time. “He needs revenue and he needs producers, so all he can do now is to cut a few more senior non-revenue producing MDs,” says one.

In the meantime, Deutsche Bank’s healthcare team isn’t entirely devoid of staff. The bank still has two directors in London – Jacek Pawlowski and Nicholas Naillon. However, the team has no managing directors following the exit of head of healthcare Darren Campili to Barclays and redundancies in June. Juniors on the team were therefore fearful for their future flow of deals.

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‘Trump effect’ scaring off one of Wall Street’s key recruiting cogs

November 8, 2018, 7:35 am

≫ Next: Five things you need to know before learning Python for a finance job

≪ Previous: Mass exit of most remaining members of Deutsche Bank’s London healthcare team

The current political climate in the U.S. may be shrinking the talent pool from which banks and other financial firms recruit. International MBA candidates who were eyeing top U.S. business schools with a financial career in mind have become warier of applying due to the uncertainty over recruiting, according to a new study. Perhaps more importantly, the problem appears particular to banking.

The annual MBA Applicant Trends report from Stacy Blackmon Consulting surveyed more than 500 current season business school candidates, split roughly evenly between U.S. citizens and international applicants. The vast majority of potential MBAs don’t see the current political climate in the U.S. as an impediment, with 78% saying they were un-swayed or even more likely to apply. That number drops only slightly – to 73% – for those planning a post-MBA career in finance. However, the narrative for the industry changes rather dramatically when you take citizenship into account.

Only 59% of finance-minded international respondents said they were un-swayed or more likely to apply to a top U.S. business school due to the current political climate. A third said they were less likely to apply. Meanwhile, U.S. finance-minded respondents are actually more emboldened due to the “Trump effect” than the overall pool of candidates. Roughly 93% said they were unaffected or more likely to apply, with only 4% reporting being less sure.

The study authors said that the international finance cohort is “more sensitive” to U.S. politics than other MBA candidates due to what they perceive as “recruiting uncertainty” among financial employers. “It has put me under a lot of stress while thinking about applying,” said one international finance-minded candidate.

Large investment banks that have significantly increased their use of highly skilled foreign workers over the last five years are now being forced to reconsider their approach with the Trump administration’s desire to make is more difficult for non-citizens to obtain work permits, according to Bloomberg. Major investment banks have increased their use of H1-B applications for foreign workers by 60% over the last half-decade. Fast forward to this year and banks like Barclays are passing over foreign applicants in some cases where they would have previously welcomed them, according to the Bloomberg report.

It seems the apparent trepidation of banks has trickled down to the next batch of highly skilled international business school grads that they’d look to hire. This could result in a significant talent drain for banks, even if no new mandates are invoked. The threat appears strong enough to inspire some international candidates to remain on the sideline or look to other industries that are less hesitant to bring on foreign workers.

Follow @BeecherTuttle

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Victoria McLean is the CEO City CV, an award-winning international CV writers and career consultancy. She was previously a recruiter at Goldman Sachs and the equities division of Bank of America Merrill Lynch.

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