Morning Coffee: The huge hedge fund and the crying woman video. Brexit Doomsday or Boomsday for the City?
Imagine it’s your first day in a new job at the world’s biggest hedge fund. You’re given a security pass and a brief tour by an HR employee who ushers you into a meeting room and rolls out a television. A video starts playing. On the screen, senior managers at the firm – including the boss himself – are confronting a female employee who, unable to take any more, eventually cracks and breaks down in tears. Welcome to Bridgewater Associates.
This used to be standard fare for new starters at Bridgewater, used to illustrate the company’s culture of “challenging” its staff and making them continually justify their point of view. If a meeting was contentious, it was invariably recorded and played back later to give people an opportunity to learn from their mistakes.
Bridgewater recently shelved some hiring plans. In fact, this could have saved some people a lot of heartache. Every once in a while, we get a glimpse into the inner workings of the secretive hedge fund run by Ray Dalio. And it’s always a bit odd.
The New York Times reports on a claim of sexual harassment between male employee and his manager. As a result, other employees have been asked to testify on what he calls a “cauldron of fear and intimidation”.
We all know about Ray Dalio’s 200 ‘Principles’, which guide the culture at Bridgewater. It’s (relatively) well known that you shouldn’t say anything unless you can back it up and prepared to have it picked apart. But employees claim that meetings are all recorded, staff are required to lock up personal cell phones every morning, security guards patrol the office silencing anyone who doesn’t “fit the Bridgewater mold”.
Maybe it’s just a case of adjusting to the culture. Testimonials from employees on One Day, One Job in 2011 describe it as an “all day pissing contest” where you have to prove you’re smarter than everyone else. But, come out the other side and you can genuinely thrive.
"BW believes it takes about 18 months to fully inculcate a person into their culture. It will be a long and possibly tortuous process,” said one employee.
Separately, Financial Times has laid out three possible post-Brexit scenarios for the City of London. Option one could mean picking up more offshore business like private banking, fintech and renminbi trading as a result of being freed from the shackles of EU regulation. This “souped up Singapore” would, however, still mean losing European business.
Then there’s everyone’s fears – the UK loses access to the single market, stricter migration rules means that employees from other EU countries can’t stick around and those 285,000 jobs earmarked by the Treasury as being at risk after a Leave vote simply disappear. The third is a less scary option where the City fudges it, London remains appealing as a place to live and work and any job losses are minimal.
Deutsche Bank’s Brexit advantage? "We end up slightly bizarrely by having something of a competitive advantage, which we didn’t want to create and is a bit inadvertent, but we came out of this relatively strongly” (Bloomberg)
Deutsche Bank is supposed to be hiring for its prime services division, but revenues slumped here too (Bloomberg)
The ‘scourge of the City’ Michel Barnier is the EU’s chief Brexit negotiator. (Financial Times)
France has the highest income tax rate in the EU (Politico)
Toscafund’s chief economist was pro-Brexit, but his employer’s flagship fund has just lost 14% as a direct result of the vote (WSJ)
Jake Donavan, who was just promoted to lead coverage of all industries at J.P. Morgan in London, has signed up to telecoms and media boutique LionTree (Financial Times)
Marc Gilly, one of Goldman Sach’s top prime broking employees in London, has left after 21 years and will not be replaced (Reuters)
The chief trader at Bank of America Merrill Lynch in Russia, Alexander Popov, has been laid off as it downsizes (Intellinews)
Och-Ziff’s head of U.S. equities trading, Joseph Samuels, has left (Bloomberg)
Ireland is ready and waiting for Britain’s bankers (Reuters)
Pimco’s new CEO Manny Roman: “Computers are much better at executing a transaction than human beings. It’s cheaper, it’s faster and the client is better off.” (Bloomberg)