Morning Coffee: The covert Goldman Sachs group that defines the future. Tidjane Thiam's quiet change of heart
Which is the best place to work in fixed income at Goldman Sachs? It's clearly not anything to do with investing and lending, which had a terrible first quarter. It's probably not generic fixed income sales, which is undergoing some sort of top level clear-out. It may be the 'Client-Relationship Management and Strategy Group,' which is both fully aligned with the way things are moving, and actually hiring.
The Wall Street Journal reports that Goldman poached Nathan Romano from Credit Suisse to join the Client-Relationship Management and Strategy Group in America. At Credit Suisse, Romano was an MD covering large hedge fund and private equity clients. In Goldman's 'CRM&SG', he's likely to do much the same.
Founded in 2014, the 'CRM&SG' exists to keep Goldman's most important clients happy. Run by Stacy Bash-Polley, who historically managed Goldman's relationship with Blackrock, the group aggregates Goldman's most senior and most effective salespeople and adheres to the zeitgeist for focusing firepower on the biggest and most profitable clients. While many fixed income sales staff face an uncertain future, the elite in the cross-asset Client-Relationship Management and Strategy Group are perfectly fine. - Theirs are not the sorts of jobs that can be done by machines.
Separately, Credit Suisse CEO Tidjane Thiam is not a man to stick to a decision when the facts have altered. The Financial Times notes that Thiam promised to "optimize" Credit Suisse's prime brokerage business when he unveiled his strategy for the Swiss bank last October. However, in more recent presentations, the FT notes that the prime broking business has been elevated to "maintain/invest." So, what's changed? Mike Paliotta, Credit Suisse’s global head of prime services, says Thiam simply became "flexible" when he realized that the returns from prime broking could be improved. The FT notes that other banks are coming to the same conclusion. Maybe it has something to do with keeping those large hedge fund clients happy?
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Former CEO of HSBC: "The EU will therefore do everything necessary to ensure it retains unfettered access to London and nothing will be done to harm British financial services in Europe." (Financial Times)
Now is the time to be working for a merger arb hedge fund. (Bloomberg)
Now is not the time to be working for any other kind of hedge fund. (Bloomberg)
Bank of America just reiterated its intention of cutting expenses. (Bloomberg)
Liquidnet Europe is growing its bond trading business. It just hired Thierry Sciard, a bond trading veteran from Stormharbour as a non-exec. (Financial News)
Citadel is going to start offering US Treasuries and credit default swaps to European investors for the first time. (The Trade News)
Revenues from fixed income were the lowest for any quarter at Nomura since the three months to March 31, 2009, according to a spokeswoman for the bank.(Financial News)
Between 1985 and 2010, the weekly leisure time of college-educated men fell by 2.5 hours, more than any other demographic: "Building wealth to them is a creative process, and the closest thing they have to fun." (Atlantic)
Michael Sherwood of Goldman Sachs invested in a restaurant selling deep fried cream egg. (Telegraph)
Sallie Krawcheck: "I am much less of a bitch than you think I am." (Inc)
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