Morning Coffee: How to keep 22-year-old bankers happy and 42-year-old bankers employed. CLOs make a comeback
Junior bankers want better work-life balance. Forty-something bankers want new skills to stay relevant in the new era of "finance digitalization." The solution? Maybe banks should scale back juniors’ hours, take money from their bonuses and use it to retrain their more senior staff, who would otherwise become obsolete and get let go.
It's a suggestion based on observations in the FT and Bloomberg. Stereotypes suggest millennials don't want to work the long hours banks are known for, and an anecdote in the FT suggests this is very true. An FT columnist with a friend who recruits for investment banks, says millennial applicants often ask questions in interviews like: “Can I leave early on Friday afternoons to go to yoga?”
At the other end of the spectrum, Bloomberg reports that the Swiss Association of Bank Employees is pushing for Credit Suisse executives to give up their bonuses and invest them in training for older employees to get them up to speed with digital developments and new technologies. Why not, instead, ask millennial employees to give up their bonuses in return for shorter hours and reallocate their pay for training managing directors and senior VPs in new technologies? That way banks would solve two problems at once.
Separately, don’t call it a comeback – collateralized loan obligations (CLOs) have been here for years. They are, however, evolving with the times.
CLOs, which securitize bundles of leveraged loans, typically last about four-to-five years before their managers sell the portfolio, pay the CLO bondholders and give the remaining cash to equity investors. Now CLO managers are fine-tuning deal terms – shortening maturities and lowering rates more frequently – as they try to anticipate a turn in the credit cycle to higher rates and tighter lending, according to Bloomberg. It's giving CLO specialists a new lease on life.
Meanwhile:
Tony Pritzker, who runs the Chicago-based private equity and venture capital firm Pritzker Group with his younger brother, and hedge fund managers Jamie Dinan and David McCormick are among the billionaires who sponsor U.S. Olympic athletes. (Bloomberg)
When Trump’s Securities and Exchange Commission punishes banks and private equity firms, it does so quietly, without publicly shaming them. (Bloomberg)
About 700 Bank of America workers in Ireland are in line for an estimated €800 ($1,002.54) bonus thanks to Republicans’ $1.5 trillion tax cuts. (The Irish Times)
Goldman Sachs says it will participate in the U.K. government’s initiative for improving gender equality in financial services. (Financial News)
Lloyd Blankfein is partying like it’s … 2006. (Financial News)
Edith Cooper, who resigned last year as head of human resources at Goldman, just became Slack’s second independent board member. (Bloomberg)
A loophole may be closing that enabled hedge fund managers to pay lower taxes. (WSJ)
The $700m Decca Fund, which Ex-Hutchin Hill Capital trader Shahraab Ahmad runs at $3.3bn City Financial Investment Co., lost a quarter of its value last week after its bets against volatile markets backfired. (Bloomberg)
The newest rule of hedge funds is you do not talk about hedge funds. (Bloomberg)
Ex-Bank of America Merrill Lynch UCITs platform head Miriam Muller has been appointed as HSBC head of alternatives product development. (HFMWeek)
Warren Buffett’s favorite private equity firm, 3G, is really struggling. (Bloomberg)
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