Journalist Kevin Roose’s new book Young Money follows eight bankers through their first years on the job and documents how naturally optimistic and positive people slide into negativity and bitterness – or just quit the industry entirely. Investment banks in London appear to have managed this in just a few weeks with interns this year.
In an article aiming to exam exactly how things have changed for interns at investment banks after the death of Moritz Erhardt last year – the Bank of America intern who died after allegedly working 72 hours straight – The Independent has instead stumbled across a microcosm of the psychological effects of working in the sector.
One intern initially describes it as “intellectually very engaging…it’s very analytical. I’ve always has a certain workaholic vibe.” This intern went into the placement expecting long hours and, even if they were unpredictable, don’t see this as the main problem.
“What’s gotten properly hard is the people,” she says. “They think they’re this planet’s elite. They’re entitled to have you as their personal slave. I feel my main job now is being the outlet for other peoples’ emotional stress.”
The toxic influence of being around investment bankers for a few weeks, albeit for most of her waking hours, has already started to change this intern class: “It is making me aggressive, very defensive, and not nice to people. Sometimes my mum calls and asks, ‘Why are you not home yet?’ and I go mental at her. The other interns [too], we all observe this change, it’s quite disturbing.”
Again, it seems, the problem in investment banking is not the hours – it’s the culture. Bankers who have been through internships themselves feel the need to dole out the same treatment to the current crop of wannabe analysts and use it as a method to find those who can cut it. Internships are increasingly the main recruitment vehicle for banks, and the way of vetting who will be able to do the job proper. This is already starting to work both ways – interns usually have a few options on the table and often working in an investment bank during the summer is seen as a CV-booster, rather than the route into banking.
Separately, if you thought two-year non-compete clauses at private equity firms for senior employees were bad, try leaving Brevan Howard as a senior trader. Christopher Rokos, the former star trader who earned $900m at the hedge fund and left in 2012 to start his own family office, had a clause in his contract that meant he couldn’t work in another trading role for five years after his departure.
Rokos, however, appears to be taking the unlikely defence of appealing the the public. Not trading for five years is against the public interest, his lawyers insist, “the public . . . will be deprived of [Mr Rokos’s] skills and hard work for period in excess of five years”. For its part, Brevan Howard would rather not have the competition, so is fighting Rokos’ plans to launch his own hedge fund. Rokos is also claiming, more reasonably, that his skills will diminish if he’s not able to practice them for this period of time.
Meanwhile:
RBS is in the process of disbanding its restructuring unit, which houses over 600 staff. Its current head Derek Sach has left and the new division will be run externally by current head of UK restructuring, Laura Barlow. (Wall Street Journal)
Pimco is hiring a lot of people for its equity business. It received thousands of applications and is set to announce new recruits in “batches”. (Financial Times)
High frequency trading firms are hiring investment banks’ traders (Financial Times)
Bond sales are being hit by wars in the Middle East and Ukraine (Bloomberg)
More Europe-focused investment bankers head for the exit. UBS has lost its head of the Netherlands, Remko Eddes, while and senior Credit Nordics banker, Michael Ingelog has also departed. (Financial News)
Rona Fairhead, the former chief executive of the FT, is in the running for the Barclays chairman job (Sunday Times)
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