Morning Coffee: Banks hire senior equities traders as pay in the sector soars. Employment prospects post Deutsche Bank
Forget MiFID II: 2018 is turning out to be a very good year to work in equities sales and trading. After revenues rose by anything from 18% (UBS) to 38% (Citi, BofA, Goldman Sachs) year-on-year in the first three months, banks are hiring. Even better, pay for equities professionals is predicted to rise significantly come bonus time.
The latest big hire comes at Credit Suisse, which yesterday announced the addition of Alexander Englander as head of equity sales for the Americas. Englander, who shares much of his name with Israel Alexander Englander over at Millennium Capital (a cousin?), joined Barclays from Lehman. Despite previous intimations that Credit Suisse's equities build was over, global head of equities Mike Stewart has seemingly hired Englander to help pursue his aim of transforming CS into a top five equities house globally. He's also hired Anthony Buoscio, an equities sales trading MD who spent the last two years at Bank of America Merrill Lynch and who worked at Barclays and Lehman before that.
Credit Suisse isn't alone in sucking up equities heavy hitters. SocGen just recruited itself a new head of equities and equity derivatives in the form of Alexandre Fleury, the now ex-global head of equities structured products and structured financing at BAML. Fleury is the latest in a succession of escapees from BAML's equity derivatives business, which now has holes of its own to fill. Barclays, Citi and Goldman Sachs are in the market for senior equities professionals too, although as Lloyd Blankfein pointed out in February, a large proportion of the firm's "equities" hires nowadays are in fact engineers who will work on the bank's electronic trading systems.
The combination of big hiring and big revenue increases is expected to do big things to pay. U.S. pay consultant Johnson Associates released its new bonus projections for 2018 yesterday. Johnson says equities bonuses should be up 10-15% this year. Contrast this to M&A, where bonuses are expected to fall 5% to 10%.
The only place not hiring in equities seems to be Deutsche Bank, which might have been expected to hire under its new ex-GS head of equities, Peter Selman. Deutsche's equities revenues fell 21% in the first quarter and whose new chief executive is "reviewing" the equities business globally and potentially pulling back from the U.S. If Sewing does so, Deutsche's equities professionals can at least console themselves with the fact that it's a good time to be on the market.
Separately, one of the MDs let go in Deutsche Bank's earlier round of redundancies under John Cryan has found new employment. Financial News reports that Andrew Tusa, who was "ousted" from Deutsche's corporate broking division in February has landed as an MD in Barclays' corporate broking division now that it's May. Three months out of the market. Not bad: it's almost like an extended holiday.
At first the “ Goldman Sachs [bond pricing] Algorithm ” only handled trades below $500,000, but today anything below $2m “doesn’t get touched by a human”, according to Justin Gmelich, a senior executive at the investment bank. “In four-five years I wouldn’t be surprised if we have a lower trader headcount, and have more staff on the algorithmic side.” (Financial Times)
If you consider the machine learning models used in quantitative finance as “AI”, then no, you do not need to study deep learning. (Quora)
"The top tech firms are sucking the juice from the universities ...". Academics in AI are, "offered huge salaries, four or five times as much [as in higher education].” (Financial Times)
Steve Hunt, the former chief technology officer at secretive trading firm Jump Trading, has been hired by cryptocurrency exchange Kraken. (Business Insider)
Private equity professionals' preferred jokes cover “class, position in society, wealth, power and the possibility for social action.” (Financial Times)
Goldman Sachs has 1,000 people in Dallas. It wants 1,400. (Dallas News)
Ex-UBS CEO would like to be known as the "olive oil king." (FiNews)
36 year-old Barclays trader on $634k a year told to be more "confident" in his appraisal.
More time spent abroad increases “self-concept clarity” – confidence in and clarity about who you are. (BPS Digest)
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