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Investment Bankers Are Nothing But a ‘Commodity’

As if investment bankers weren’t getting beaten up enough, here’s one more log to throw on the fire: they’re not all that special. A new report suggests that the skillset top investment bankers carry with them is nothing more than a commodity.

The study, put together by London Business School and private equity fund of funds Capital Dynamics, looked at the performances of 145 different private equity fund managers from 1990 to 2011, cross-referencing the returns with the profiles of their workforce and how they evolved over time, according to Financial News.

They found that high turnover rates of former investment bankers at buyout firms had no material impact on returns. Private equity firms that brought in new bankers to focus on a specific fund did just as well as those that held on to talent from previous deals. It seems bringing in the hired gun to focus on a new fund may be a bit overrated.

“Financial skills appear to be a commodity,” the study authors said. Ouch.

Such was not the case operations specialists – executives with sector-specific experience. Private equity firms that “refreshed” their operations staff between funds to bring in more applicable experience outperformed the masses.

Investment bankers can look at the findings two different ways. Sure, your experience isn’t all that special. But now there’s less reason for buyout firms to churn-and-burn through you and your colleagues between funds. You’ve met one investment banker, you’ve met them all.

Age Bias? Tips for Finding Work Over 40 (eFinancialCareers)

At the end of the day, as unfair as it may be, the responsibility falls on the candidate to win over a hiring manager, despite any preconceived or subconscious biases they may have had.

Charges Filed (WSJ)

It’s official. U.S. prosecutors charged two former J.P. Morgan traders for misvaluing their positions in order to hide the magnitude of the “London Whale” trading losses. The whale himself, Bruno Iksil, cooperated with authorities and was not charged.

Risk Reward (Financial News)

And in a bit of good timing, J.P. Morgan promoted one of its rising stars to a newly created role in risk management. Dale Braithwait is the new chief operating officer for risk in Europe, the Middle East and Africa.

Times Are Changing (eFinancialCareers)

Plenty of students still want banking and financial services jobs, but they need to know that things have changed – both for the better and for the worse.

Health Issues (The Guardian)

Barclays’ Finance Director Chris Lucas will step down from his post on Friday, rather than next year, due to failing health. He was originally planning on leaving the bank in February 2014.

They’re Back (FIN Alternatives)

The two co-founders of the Diamondback Capital Management, which closed its doors last year amid a string of redemptions following an insider trading probe, are each planning to launch new funds. Lawrence Sapanski will set up shop in Greenwich, Conn., while Richard Schimel’s fund will be based in New York.

Buzz Around the Office

Should Have Gotten Delivery (MSN)

Two dimwitted criminals were foiled in their attempt to rob a Chicago restaurant when the owner, with a gun in his face, told the pair that he was too busy with the dinner rush to get the money together. He asked them to come back in an hour. They did. They were arrested immediately.

List of the Day: Dead End Job

Think you are in a dead end job? Here’s how you know.

  1. You haven’t had a raise in years.
  2. You don’t have the mandatory skills to move up.
  3. You don’t even want a promotion.

(Source: AOL Jobs)

AUTHORBeecher Tuttle US Editor

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