As Goldman Sachs embarks upon a round of fortified cost-cutting, which jobs will be immune to the change buffeting its securities business? Try the areas Goldman plans to invest in.
During a presentation at yesterday's Deutsche Bank Global Financial Services Investor Conference, Goldman Sachs' COO Gary Cohn said the firm is committing resources to three key businesses: 'electronic execution in FICC (fixed income currencies and commodities) and equities, client financing in macro and micro FICC, and European FICC and prime brokerage.'
Cohn's comments imply that anyone working on Raj Mahajan's global execution services team at Goldman, will be fine - particularly if they have anything to do with developing the new modular electronic Pantor trading platform, acquired by the firm last November. So too will be Goldman's debt capital markets or "FICC financing" bankers - particularly in Europe, where Cohn is a big believer in "disintermediation" and expects DCM revenues to increase as corporates raise money from markets instead of via loans from banks. And then there are the prime brokers - whom, as the Financial Times pointed out recently, are suddenly popular everywhere as banks come to appreciate their prime brokerage businesses as the gateway to lucrative hedge fund accounts.
The anomaly in Cohn's growth picture is European FICC, which he groups with prime brokerage. If Goldman's investing in its European fixed income business, why are senior people like Dalinç Ariburnu leaving? Or is investment in European FICC somehow compatible with the disappearance of top FICC staff? Suggestions welcome in the comments box below.
Separately, the strange case of Steven McClatchey, a 58 year-old ex-director at Barclays investment bank in New York, is odd on several fronts. Firstly, McClatchey - a grown man - liked to play with remote controlled boats. Secondly, McClatchey arranged with a mate (also a boat enthusiast) and a plumber to have his bathroom redone in return for stock tips. And thirdly, despite being a director in IBD at Barclays, McClatchey's job seems to have been decidedly junior in nature: 'He was responsible for putting together a weekly PowerPoint presentation to keep executives abreast of potential mergers involving bank clients,' says Bloomberg. McClatchey was 56 at the time, so why was he doing the job of a 23 year old analyst? Suggestions also welcome in the comments box below.
Goldman Sachs is doing less business with hedge funds and more business with asset managers and corporates. (Business Insider)
John Cryan says returns above 20% are a red flag, "because if you’re making too much money, you need to check that it’s still the right thing to do.” (Bloomberg)
HSBC's got a new COO for its global markets division from UBS. (Reuters)
European investment banking fees stand to be at their lowest level since 2003 in the first half of 2016. However, senior bankers expect things to improve after the referendum. (Financial News)
Bridgewater received $2m in aid from Connecticut and this persuaded it to stay there. (Bloomberg)
Bertrand Tissier, an equities salesman at UBS Securities in France, is arguing that he was inexplictably demoted to salesman two months after having risen to the rank of sales account manager and deserves $1m in compensation. UBS is pointing out that he left for another job. (Bloomberg)
“I had one pregnancy where I was trading and went into labor, and I refused to go to the hospital because I wanted to be sure that I had got rid of my position.” (Bloomberg)
Every single ultra-rich person I have met understands their edge, what they are good at, and then what they aren’t good at, and therefore should pay to get done. (WilowWallStreet)
Banker sells car on Bloomberg: “Ideal for 25th birthday.” £22k. (Twitter)
Revenge against a former boyfriend drove me to Goldman Sachs. (Lequynhmai)
To show how bankers view compliance officials, Barclays revealed a picture of nuns carrying guns, an indicator that the group was seen as ultraconservative but still dangerous. (Wall Street Journal)
Photo credit: Patek Philippe Calatrava by hendrikMINTARNO is licensed under CC BY 2.0.