Morning Coffee: J.P. Morgan reluctantly tells staffers to start packing. What it’s like to work for a hedge fund that’s rolling
If it seems as if banks are dragging their feet with their post-Brexit plans, they are. An EU regulator chastised U.K. banks last month for their “inadequate planning,” telling them to “speed up their preparations” and stop assuming a last-minute deal between EU and U.K. authorities would be reached. Count J.P. Morgan as one of the few that actually listened, though it may have done so with a bit of an eyeroll.
J.P. Morgan has asked “several dozen” employees to relocate from London to continental Europe by the beginning of next year, and said it plans to “migrate or add” hundreds more employees to its EU offices before the March 2019 deadline. The memo, which represents J.P. Morgan’s first official Brexit-related communication to employees, provided a bit of good news for those who will be affected. The bank said it would increase its presence in cities like Paris, Madrid and Milan. J.P. Morgan was widely expected to push employees to the less desirable Frankfurt, Luxembourg and Dublin, locations where it currently holds banking licenses.
The “several dozen” in question will include mostly client-facing investment bankers and asset and wealth managers as well as those who work in risk management, according to the Wall Street Journal. Written with a rather compassionate tone, the memo appeared to suggest why banks have been so slow to make such decisions – and why J.P. Morgan has only contacted a few dozen employees and not the several hundred that would need to go.
“We want to avoid affecting the lives of employees and their families with changes that could prove to be unnecessary or premature,” the memo read. While a last-minute deal to allow financial firms in the U.K. to continue to operate as they do currently would likely be celebrated by J.P. Morgan and its rivals, none want to make dramatic changes to their staff if they ultimately weren't required. The European Central Bank said yesterday that just 20 banks met the June 30th deadline to apply for a license to operate in the EU. Saying banks are dragging their feet may be an understatement.
Elsewhere, the Wall Street Journal just published a long expose on hedge fund titan David Einhorn, who has seen assets under management at Greenlight Capital drop by more than half as the firm has struggled with performance over the last three years. The piece provides a clearer window into what it’s like working for a hedge fund that once posted double-digit annual returns with ease.
While he can be difficult to deal with – sometimes insulting investment managers who hold dissenting opinions – Einhorn reportedly gives Greenlight employees plenty of outlets to blow off steam. Known for his penchant for poker, Einhorn whisks his staff off to annual gambling adventures in Atlantic City and Las Vegas – sometimes on a private jet – and doesn’t dissuade staffers from late nights at New York nightclubs. The hedge fund also hosted an annual poker tournament for employees, friends and clients, “where alcohol flowed and thousands of dollars changed hands,” according to the Journal.
“We worked hard and played hard,” one employee told the paper. The mood has likely soured a bit over the last three years with Greenlight posting a double-digit loss against the S&P’s 38% gain.
London boutique Robey Warshaw has advised on just a handful of deals during the first half of 2017, yet it owns a 20% market share in the U.K. The three-partner firm has a knack for advising on some of the largest M&A transactions. (Business Insider)
Former Harvard University president Drew Faust has been named to Goldman Sachs’ board of directors. (Bloomberg)
Swedish bank SEB is hiring 100 people a month, mostly in technology. (Bloomberg)
Google Cloud COO Diane Bryant has resigned after only seven months on the job. Speculation is mounting that Bryant could be in line to be the next CEO of her former company, Intel, though insiders say Bryant also struggled to find her role at Google. (Business Insider)
The chief executive of Allianz Global Investors is “very worried” about London’s ability to attract top graduate talent post-Brexit. The City may soon see a “brain drain…of the best and brightest.” (FN)
Deutsche Bank’s stock has been so battered that it may soon get booted from a key Euro stock index. (Bloomberg)
Morgan Stanley’s top lawyer is working to create a new political party in the U.S., the Serve America Movement (SAM). Eric Grossman hasn’t offered much detail on the party’s political and social leanings, but that hasn’t stopped him from eliciting big donations from Morgan Stanley veterans. (Bloomberg)
Dealbreaker is disputing a Bloomberg report that Credit Suisse is “wrapping up” its investigation into claims that an MD acted inappropriately with an intern at a company event. Dealbreaker, which broke the news last week, says the investigation hasn’t been concluded and the disciplinary process hasn’t even begun. (Dealbreaker)
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