Morning Coffee: New outlet for ‘frustrated, intelligent’ analysts. Bonus disparities at Morgan Stanley, Barclays and SocGen
You’re an experienced employee of an investment bank with a handsome work ethic and an above average IQ. Your job feels devoid of meaning. You don’t want to set up a Mexican restaurant, so what do you do?
If you’re a credit analyst in an investment bank, you can always join the buy side.
Funds and hedge funds are offering investment banking credit analysts a whole new lease of life. “There’s a lot of frustration on the sell side,” Brett Chappell, Copenhagen-based head of fixed income trading at Nordea Investment Management told Bloomberg. “Experienced and intelligent people who develop great trade ideas are not even sure if their traders can take on a new position in size, or if their bank would be willing to utilize its balance sheet.”
By comparison, Bloomberg says credit analysts on the buy side have an increasingly important purpose. “The role of the analyst is vital for the buy-side because if there is no trading then these bonds become a buy-to-hold investment,” said Andy Hill, London-based director of market practice and regulatory policy at the International Capital Market Association. “You really need to do your homework before you buy them.” It’s unsurprising therefore that plenty of investment banking credit analysts have been making the move.
Separately, salary benchmarking company Emolument has produced some new data reported upon by the Independent. The Independent suggests that the highest paid bankers (at J.P. Morgan and UBS) are the least satisfied, but we suggest that the figures – shown in the graph below – can be more accurately parsed as the extent to which banks distributed 2014 bonuses equitably.
On this basis, J.P. Morgan seems to have the most equitable distribution – with similar numbers of people claiming to be happy with their bonuses, unsure about their bonuses and unhappy with their bonuses. By comparison, Morgan Stanley, Barclays and SocGen seem to impose big distinctions between winners and losers. And BNP Paribas seemingly pays a small coterie well whilst leaving most people disappointed.
Fixed income research jobs at investment banks will be hit by MiFID II. (Euromoney)
The brutal bond sell-off may have begun. (Bloomberg)
Jobs at credit ratings agencies may be less secure than they look. (Euromoney)
What it’s like when you’re a top private equity professional at Blackstone: ““I get all kinds of like unsolicited positive things after Joe goes and visits somebody, usually followed up by some large amount of money.” (Bloomberg)
How it is when you work for Google’s venture capital fund. (Quartz)
If you work for Facebook you never need to eat at home. (WSJ)