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Morning Coffee: The worst thing about being a VP in M&A, by Steve Bannon. Gary Cohn's millions

M&A jobs are hard. The hours are long. The food is bad. Your health may suffer, but this is not the worst thing. Steve Bannon, Trump advisor, and a former VP in M&A at Goldman Sachs, knows what the worst thing is and it's not the work itself.

In a long profile of Bannon, the Washington Post quotes Trump's chief strategist as saying he quit M&A at Goldman Sachs because of the limited upside. This was illustrated when, four years into his Goldman career Bannon persuaded the firm to invest in Qualcomm, the listed chip maker whose revenues now exceed $20bn annually. It was the late-'80s and Qualcomm was tiny and Bannon - who then had "film star good looks" - was earning $450k, working 100 hour weeks and eating pizza at 10pm in the office.

After pulling off the Qualcomm deal, 36 year-old Bannon had a revelation: he'd done all the work and Goldman had got all the money. The firm paid him well, but it saved the really big money for its MDs and partners and Bannon was still years off being one of those. “It was a huge effort to get it [Qualcomm]  done...I thought about it: ‘I will get all the grief if this deal doesn’t work out and none of the upside if it does well.’ . . . That investment was worth hundreds of millions of dollars.” A year later, Bannon quit and started his own firm. Nowadays, his net worth is thought to be around $48m but he's no longer likely to be mistaken for the next James Bond.

Separately, as far as we can tell Gary Cohn's wife did not work for Goldman Sachs. Lisa Pevarof-Cohn seemingly makes mystical bracelets (of the kind worn by Andrea Orcel at UBS) under the sometime pen name of 'cosmicguidelines' and owns a West Broadway Apartment formerly filled with taxidermy. Even so, Cohn's wife has a stake in several Goldman funds.

Cohn's decision to quit Goldman Sachs and join Donald Trump may have had the advantage of allowing him to liquidate his Goldman holdings around the top of the market., but it had the disadvantage of compelling him to fully disclose his wealth in an ethics filing. This filing shows that after 25 years at Goldman Sachs, Cohn has listed assets of $254m. Thanks to a previous federal ethics disclosure, we also know that $216m of these assets are (or were until he sold them) in a combination of Goldman shares, in 18 other publicly traded stocks, and in investments in eight Goldman-managed funds. We know too that Cohn's jewelry-maker wife has a stake in three such funds.

Goldman's managed funds aren't restricted to the firm's employees, so Pevarof-Cohn's stake isn't abnormal. Cohn's disclosure suggests, though, that he was so confident in his former employer and former colleagues that he chose them to manage both he and his wife's money. Goldman's private equity funds made big money for investors in the past. It's not clear that the Cohns' were both invested here, but the returns almost certainly beat selling bracelets aligned with the phases of the moon.


Just when things were looking up for Credit Suisse: "“The two things that people are fearing is a big fine and that this prompts another wave of outflows from their European business as clients get fed up with the franchise.”  (Bloomberg) 

Brexit means UK wealth managers might have to dump their European clients, including British expats, or set up expensive operations in the EU if they want to continue servicing their European investors. 25% of business could be affected. (Financial Times) 

How to create a buzz around your roadshow: lay tables for fewer people than have agreed to come so that it looks like a lot of people showed up unexpectedly. (Zero Hedge) 

DIY quant funds written by developers in their garden sheds are coming for your lunch. (Wired).

Data science interview questions and answers. (KD Nuggets) 

Darwin was a slacker and you should be too. (Nautil) 

Only 5.2% of people get into Harvard these days. At least it's easier than Goldman Sachs. (WSJ) 

Embarrassing resume blunders that are letting you down. (Clickhole) 


Photo credit: Steve Bannon by Gage Skidmore is licensed under CC BY 2.0.

AUTHORSarah Butcher Global Editor

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