Morning Coffee: New fears at Deutsche Bank as Barclays bankers get a boost. Banker/DJ wins ECM business
As Deutsche Bank prepares to make changes to its supervisory board, the front-runner to become its next CEO is a cost-cutter and a wealth management executive, not an investment banker.
Frustrated by the slow turnaround of the loss-making German bank, chairman Paul Achleitner is considering making Juerg Zeltner, the former head of the wealth management business of UBS, the successor to Deutsche Bank’s CEO John Cryan, according to Spiegel magazine.
Zeltner left UBS in December after more than three decades at the Swiss bank when it became clear that he was not going to hit his own profit targets and began resorting to cost cuts. He raised eyebrows when he said that UBS wasn't hunting for net new money unless profits followed, according to finews.com. None of this looks like good news for Deutsche's overweight and unprofitable (in Q4 2017) investment bank.
The turmoil at Deutsche Bank is a contrast to the comparative calm at Barclays, whose investment bank-focused CEO has just helped secure his position for a little longer. Jes Staley's decision to dig his heels in over a U.S. Department of Justice fine relating to the mis-selling of mortgage debt before the financial crisis, has paid off. Barclays is thought to have been threatened with a fine of $4bn, but Staley's recalcitrance saw it walk away with a fine of just $2bn. Now that the fine has been settled, Staley has one less thing to worry about and the relative increase in his security could not be more of a contrast to John Cryan's position at Deutsche Bank - particularly as Deutsche's own $7.2bn fine caused chaos for the German bank at the end of 2016 and helped destabilize Cryan's restructuring plans.
Separately, being an electronic dance music (EDM) DJ isn’t just a way to seem like a cool boss to junior bankers. It can also apparently help your bank’s bottom line.
Goldman Sachs COO David Solomon, the heir apparent to CEO Lloyd Blankfein, was reportedly eager to earn the business of Spotify, the music-streaming platform whose initial public offering is today, by touting his personal musical experience. Solomon made "a personal plea" in the bank’s pitch to the Spotify that referenced his side-project as an EDM DJ, according to Recode.
The pitch worked, and Goldman has been involved in an advisory capacity to the company as it approaches its IPO, getting a slice of the $50m fee pie.
On an October episode of the podcast "Exchanges at Goldman Sachs," Solomon described how he got into DJing:
“Five, seven years ago, I started really kind of taking note of club and EDM music and what was happening with all the electronic music, and I said: This is really interesting. Big business. And started looking at it, and I said: You know, I like some of this music. And started playing around with it, started reading about these DJs that really had these incredible platforms, and I said: You know what? This looks interesting. And kind of stumbled into it as a hobby, and now I just do it for fun.”
The European head of utilities research at Barclays has left the bank to join a climate change think tank, after concluding that regulatory changes ushered in at the start of the year have "taken the enjoyment" out of working for a big bank. (Financial News).
Private markets have more than doubled in size over the past decade, surpassing the growth of public stocks and bonds available to all investors. That’s transforming how companies grow, concentrating investing in fewer hands and raising concerns about oversight. (WSJ)
Amber Baldet, a blockchain program lead at J.P. Morgan, is leaving the bank to launch her own venture and will be replaced by Christine Moy. (Reuters)
Capital markets fintech ventures attracted less than half as much equity funding last year as they did in 2015 and 2016, according to a study from the Boston Consulting Group. (FT)
Wall Street M&A advisory bankers are getting ready for a ‘domino effect’ after Salesforce’s $6.5bn MuleSoft deal. (Business Insider)
Quants that invest in trend-following momentum stocks are getting hammered. (Bloomberg)
Right-wing quant hedge fund manager Robert Mercer had a secret adventure as a New Mexico cop. (Bloomberg)
Leonardo Marroni runs a $115m hedge fund from the spare room downstairs in a house in the leafy London suburb of Wimbledon, which serves as Devet Capital’s trading floor, conference room and occasional bedroom for six former stray dogs, where the firm operates on an annual budget of about £66k ($98k). (WSJ)
The average cryptocurrency hedge fund has lost 23% in 2018, and at least nine funds have been shuttered so far this year. (Bloomberg)
Cryptocurrency millionaires are buying Lamborghinis as the ultimate status symbol in their community. (Business Insider)
How does your pay stack up? (WSJ)
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