Morning Coffee: Desperate bank traders take pay cut to join latest craze. It’s an ‘extraordinary’ time to be working in M&A

Traders today face two main problems: they are becoming increasingly expendable and their exit opportunities are limited. One potential solution appears to be emerging, however. If, of course, you are willing to roll the dice and potentially take a cut. Traders and bankers young and even old have started to flock to a cryptocurrency exchange that is expanding internationally at a near-unheard of level.

Tokyo-based bitFlyer, launched by Goldman Sachs alum Yuzo Kano, has been actively poaching former traders and bankers from his old employer and rivals including Barclays and Credit Suisse, among others, according to a profile in the Japan Times. Unlike some cryptocurrency companies, bitFlyer is specifically targeting banking talent to grow its operations, particularly as it looks to expand its offerings to include digital payments and brokerage-advisory services.

Kano told the paper that he is eyeing traders and bankers because, as the technology becomes more established and legitimized, cryptocurrency companies that thrive will need people that understand how the market operates. Interestingly, Kano is targeted recruits that fall into two different buckets: young and old. He’s hiring analysts and associates who want to work in finance but prefer the startup mentality as well as traders and bankers in their 40s who have “become disillusioned with the industry,” which may be code for “laid off” or “made redundant.”

The kicker of course is that bitFlyer likely can’t match the salaries of many current traders or bankers – compensation appears to top out around $200k. But the company can offer something most established financial firms can’t: pre-IPO stock options. And you don’t have to reach the C-level to receive them.

Consider Kano to be on the aggressive side when it comes to growth plans. bitFlyer doubled headcount to 150 in the last six months and hopes to double in size yet again before year-end. The company has offices in Tokyo, San Francisco and Luxembourg but hopes to open new locations in South Africa, Australia and other parts of Asia. If you want to spin the wheel, the (stock) options are there.

"I just didn’t see a future in traditional finance,” Daisuke Murayama, a 35-year-old former Barclays trader who took a pay cut to join bitFlyer in February, told the Japan Times. “It’s never coming back.”

Elsewhere, 2018 is setting up to be a great year to be working in M&A. John Waldron, co-head of investment banking at Goldman Sachs, told Bloomberg that he sees disruption across a number of industries that will culminate in an “extraordinary time” for M&A activity.

If you look at recent news clippings, Waldron is spot on. A deluge of deal announcements and activity have already made up for what was a somewhat slow Q1. One recent forecast estimates that the number of deals will increase 8% over the next two quarters compared to the same period in 2017. Judging by Waldron’s comments, that estimate appears low.

Meanwhile:

Goldman Sachs is teaming up with Apple to launch a new credit card. It’s a rare step for Goldman into the retail space, while Apple is simply replacing its current banking partner, Barclays. (WSJ)

All 10 of the highest-paid executives of publicly traded U.S. companies work in tech or private equity. Four alone work for KKR, two of whom didn’t even found the company. (Bloomberg)

The average Facebook employee made north of $240k last year. And that doesn’t even include stock options. (Wired)

Former J.P. Morgan trader Akshay Aiyer has been charged by the Department of Justice with conspiracy to fix currency prices. Two alleged co-conspirators who were named in Aiyer’s indictment pled guilty to similar charges back in January of 2017. (FT)

Henry Tarr, head of Goldman Sachs’s oil research team in London, has left the bank to join Germany broker-dealer Berenberg. (Financial News)

Home mortgage consultants and private mortgage bankers at Wells Fargo are being compensated $97 million in unpaid wages after a judge ruled that they weren’t properly paid for work breaks that they were entitled. (MarketWatch)

U.S. investment firm Columbus Nova has completely scrubbed its website after reports surfaced that it served as an intermediary that made payments to President Trump’s personal attorney on behalf of Russian investment firm Renova Group. (CNN)

Lauren Simmons is a unicorn. She is the only woman working full-time on the New York Stock Exchange. She is also the youngest, at age 23. (BBC)

The Napoleon Complex, a rumored syndrome that speculates short men make up for their lack of height by being ultra-aggressive, may be a real thing (New Scientist)

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