Morning Coffee: Merrill Lynch banker's guide to living a very good life in finance. The hottest hedge fund of 2019
If you want a long and prosperous career in parallel with a good and happy life, you might want to use Kevan Watts, a former Merrill Lynch banker as your guide.
Watts, who died recently after a short illness is the subject of a long and glowing obituary in the Financial Times. If you're at the start of your time in banking, it makes for informative reading.
Firstly, Watts took the sort of meandering route into finance that people like ex-Goldman Sachs CEO Lloyd Blankfein have long been advocating. - He didn't study finance at university, he studied philosophy. He didn't take a Masters in Finance qualification, he studied a postgraduate qualification in Wittgenstein. He didn't go straight onto an analyst programme - he went to work for the British Treasury for seven years. Only after that did he join Merrill Lynch in New York. In Blankfein's words, he spent time focused on becoming a "complete person" before immersing himself in the 70 hour weeks of the average banker.
At Merrill, Watts worked in M&A, covering clients in the UK, the rest of Europe and Asia. This meant an archetypally grueling travel schedule, but the FT says Watts was almost always home for the weekends. He stayed married to the woman he met when he was 17 (she was a bank clerk, he'd gone in to open an account). He cooked Sunday lunches.
Most of all though, Watts doesn't seem to have become too pleased with himself as a successful global M&A banker. Colleagues describe him as "thoughtful" and "contemplative." He managed to fit in some significant hobbies alongside his day job - he was a director of Tottenham Hotspur Football club, and he and his family ran a garden center and cafe near his home in East Sussex. Few people in Watts' village knew him as a banker, says the FT - most thought he was simply a guy who sold plants.
Separately, while Exoduspoint has been the new hedge fund making waves in 2018, 2019 may be the year of another recent launch - Bluecove. Just as Exoduspoint was founded by ex-Millennium star trader Michael Gelband, so London-based Bluecove was founded by former BlueBay Asset Management founder Hugh Willis. Bluecove is a systematic fixed income fund and the Financial Times reports that it's been doing some big hiring. - It's already recruited nine members of Blackrock's systematic investing team (including deputy head Benjamin Brodsky), plus Ian Howard, the former head of quantitative technology at Citadel and it doesn't even have a trading licence yet. Another five to ten hires are expected next year.
New York hedge fund GoldenTree Asset Management paid UK politician Boris Johnson $121k for a two hour speech, plus travel, plus accommodation. (Bloomberg)
The ex-Goldman Sachs partner who is trying to build 'the Goldman Sachs of crypto' may be having second thoughts. “2017 was just fun, it was almost stupid. [But] this year has been challenging. It sucks to build a business in a bear market.” (Financial Times)
Goldman Sachs was told to tighten its risk processes for deciding which deals to do and which deals to avoid just after it raised $6.5bn for the controversial Malaysian 1MDB deal. The Fed questioned why committees seemed to reject very few deals as being too risky or inappropriate. (Financial Times)
UBS is hiring Cicilia Wan from J.P. Morgan as its group-wide head of employee relations. UBS didn't have a head of employee relations before and there are suggestions this might be something to do with the alleged rape of an employee - although UBS says the hire was in the pipeline before the allegations surfaced. (FiNews)
UBS refused to pay the £500k legal bill for its former trader accused of manipulating LIBOR who now runs a burger bar. (Telegraph)
Deutsche Bankers who disappeared during the summer are resurfacing at hedge funds and in fintech firms. (Financial News)
Widow of lawyer who killed himself blames big-law culture: "It’s shameful to ask for help, shameful to be vulnerable, and shameful not to be perfect." (RollonFriday)
Steve Eisman, the money manager who predicted the collapse of subprime mortgages before the financial crisis: “Corbyn’s a Trotskyite...Now I know my Trotskyites well, and I know you don’t want to be invested in the U.K. if a Trotskyite is prime minister." (Bloomberg)
How to handle new managing director envy. (RadReads)
How to make $5k a month selling sneakers. (Financial Times)
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