Morning Coffee: UBS invited junior bankers to make their jobs less mundane. Goldman partners reflect cultural shift
It's not easy to get a job as a junior in an investment banking division (IBD), preparing the ground for M&A pitches or capital markets deals. But when you arrive, you may be surprised. "As an analyst, you spend 75% of your time on PowerPoint, making presentations," one J.P. Morgan analyst told us last year. "You're making presentations for the same market and each time you build a new presentation, you're spending a lot of time redoing similar slides."
If that sounds laborious and slightly pointless, it is. If it sounds like analysts might complain about it, they do. People quit because of it. "A lot of the people who go into banking are very intelligent but the work is just not very stimulating and doesn’t use their intelligence properly," one told us in September.
Banks are trying to do something about this. Goldman Sachs and J.P. Morgan are busy trying to automate elements of the initial public offerings for equity capital markets deals and Goldman says it is "building a technological solution around a deal life cycle." Now, UBS has beem trying to keep its junior bankers happy by asking for their opinions on what to automate.
UBS juniors' answers were illustrative of the pain points in the young banker's day (and night). They said they want to use artificial intelligence to automate building financials models, creating term sheets (a document outlining the material terms and conditions of the deal) and constructing Pitchbooks in PowerPoint. While this might sound like most of a junior banker's job, juniors in the past have insisted that this kind of automation will free then up to do more tailored and deal-specific analysis instead.
UBS seems genuinely to want to implement its juniors' solutions. In August, it hired Ronald Jansen, the former head of IBD strats at Goldman Sachs, who was at the forefront of transforming Goldman's deal processes. Sam Kendall, who runs investment banking at UBS has begun offering "pizza lunches" to encourage juniors to come and talk to him. "If we can release time from bankers to just think, sit there with a blank sheet of paper to think about their clients' problems, then maybe we'll move the ball forward a little bit," Kendall told Business Insider.
Separately, Goldman Sachs' partner list is out and in the new age of transparency under CEO David Solomon, the firm has provided a far more detailed breakdown than ever before of exactly who's on it. - 29% are millennials, 26% are women, 20% are Asian. We've pulled out some of the more interesting names from the list of 69 here. What's also interesting, though, is that it's getting easier to make partner at Goldman if you're not a Goldman Sachs lifer. The last time the firm named new partners, in 2016, 75% had joined the firm as either an analyst or an associate. This year, that's down to 67%, which doesn't even include the 15 outsiders Goldman has hired directly into partner roles in the past two years.
Meanwhile:
Barclays is cutting 134 technology infrastructure jobs in the UK and adding 50 in India. (Reuters)
David Solomon is emotional about the 1MDB scandal: “It is obviously very distressing to see two former Goldman Sachs employees went so blatantly around our policies and so blatantly broke the law.”
Goldman Sachs hired Thomas Doyle as head of single stock synthetic products group distribution in EMEA and David Cornish as head of quant distribution. (Financial News)
Carmignac Gestion, one of France’s best-known fund managers, stands accused of paying its employees dividends in Luxembourg rather than a salary in France, to reduce their tax burdens. (Financial Times)
Hedge funds had their worst October in seven years. (Financial Times)
Deutsche Bank needs to be afraid of the Democrats. (Axios)
McKinsey & Co says investment banks made revenues of $275bn last year, down from $345bn in 2007. "The banking sector’s price-to-book ratio was consistently lower than that of every other major sector over the 2012-17 period — trailing even relatively sluggish industries such as utilities, energy, and materials.”(Financial News)
What people get wrong about the super rich. (BBC)
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