Monday’s Headlines: Banks boom in Silicon Valley
The recent Internet book means big bucks for Wall Street, which is courting new Silicon Valley million- and billionaires to help them manage their newfound wealth, DealBook reports. J.P. Morgan opened a 10,000-square-foot office in Palo Alto, Calif., while Goldman plans to increase staff in San Francisco by 30 percent over the next year, and UBS has more than doubled its wealth management staff in the area in the past three years.
The 1 percent banks charge to help the wealthy create estate plans and manage their investments adds up to billions of dollars, and the financial services industry is “salivating over the wealth being created,” the blog reports. Further:
Banks are casting a wide net for potential clients. At Facebook, Wall Street brokers are wooing executives, rank-and-file employees and administrative staff members. Morgan Stanley has a dual strategy, with one team of advisers responsible for senior executives at large technology start-ups and another for lower-level employees. Chris Dupuy, who leads Merrill Lynch’s wealth management team in the Pacific Northwest, recruits from the C-Suite to the “corporate cafeteria."
The trend is sparking opportunities for younger bankers who are more tech and social-media savvy, and can relate to the young engineers and entrepreneurs often at the center of this new source of funds.
A Morgan Stanley real estate fund will buy the largest mall in central St. Petersburg, Russia, for $1.1 billion. [Businessweek]
JPMorgan Chase’s investment bank cut employee compensation by 9 percent to an average of $341,552. [Bloomberg]
Investors may add $80 billion of new capital to hedge funds globally in 2012. [Businessweek]
Lazard has been given five weeks to find a buyer for all or parts of RBS’s equities and advisory operations before managers start firing employees. [Bloomberg]
Britain plans to turn London into a major foreign exchange trading center for the Chinese renminbi. [Financial Times]
The South American boom is backfiring as commodities taper off. [Businessweek]
Venezuela’s decision to leave the World Bank’s arbitration body would affect more than a dozen foreign companies that have unsettled disputes with the government. [NY Times]