Morning Coffee: Senior bankers' new method of overworking juniors. Jes Staley's plan to hire dozens of traders
Ever since the death of Moritz Erhardt on a banking internship in 2013, banks have tried to reduce the number of hours their analysts work. Erhardt was said to have worked 72 hours straight before the epileptic seizure which killed him. Today's interns at Goldman Sachs can be expected to be sent home at midnight (at the latest) with instructions not to reappear until 7am, while most banks have put measures in place to cut working hours for full time staff - like Saturdays off or so-called "protected weekends."
An important element of this 'overwork protection' has also been to shorten the length of the 'pitchbooks' juniors working in M&A jobs put together to help senior bankers win deals. Notorious for being incredibly and often unnecessarily detailed, it's pitchbooks that typically keep junior bankers up at night as managing directors ask for endless minutiae about the deal that might take place, and then endless revisions. Five years ago, Gregg Lemkau the co-head of Goldman Sachs' M&A division, said that in challenging markets potential clients often just want to be amused (and therefore won't look at detailed pitchbooks anyway) and in 2015 Goldman promised to use technology to reduce the amount of work that goes into them. Across the industry, there's been a push to make pitchbooks shorter than before - 30 pages rather than 100 is the new norm.
Except....it seems that some MDs are unwilling to do away with weighty pitchbooks as a crutch when they meet clients. Madeleine Henry, a former Goldman Sachs analyst, says it's become a thing to ask analysts to produce 'backpocket decks' - unbound unofficial pitchbooks which regularly exceed 100 pages and presumably still require tweaks at 2am.
Henry left Goldman in 2015 and went to work for Ziff Capital Partners, which she left in May 2018 to become a writer, so it's not exactly clear where the backpocket decks were encountered. However, their existence suggests that changing banking culture isn't as easy as a memo from the boss and some standardized PowerPoint templates. - It's MDs who need to feel comfortable approaching clients with more slender pitchbooks, and clearly they don't.
Separately, Barclays' CEO Jes Staley has got a new plan. Reuters reports that Barclays intends to make 'dozens of hires' for its Asian markets business sometime in the medium term (likely 2021) years after spying a quick and hopefully easy source of profit growth. The new hires will only happen en-masse if Barclays' return target is met, but it still seems a bit of a volte face. It's worth bearing in mind that Barclays pulled back from Asia and from retail banking in Continental Europe under Antony Jenkins in 2014 and that Staley himself pulled back from Barclays' Asian cash equities unit in 2016.
Jes Staley and Jamie Dimon might meet Donald Trump when he comes to the UK. (Financial News)
Goldman Sachs' $250m office in Bengalaru is now open. Equipped with contemplation rooms, it's an innovation hub which is already developing a focus in artificial intelligence, machine learning and data analytics. (Hindu Business Online)
Goldman Sachs isn't giving up on fixed income trading. '“We see value in maintaining and increasing our core footprint, we expect to continue expanding our market share in both FICC (fixed income trading) and equities,” said COO John Waldron last week. Waldrom said systematic trading is an area where Goldman is “not satisfied” and sees room to grow. (Financial Times)
How the new head of Jupiter Asset Management spent eight months between jobs: “Travelled, chilled out, badly learnt golf, went to the gym, slept longer. I sorted out my financial side — we work in the financial industry and we do nothing about our own finances because we’re too busy." (The Times)
Liberated from the need to live in London, young UK technology millionaires are choosing to live in...Reading. (The Times)
Ex-Goldman Sachs banker's healthcare company offers free yoga and ping-pong but has a reputation for hard-driving employees. Ping pong tables are used as desks and most people only last 11 months. (The Times)
For a moment, Deutsche Bank contemplated merging with UBS. (Yahoo)
Last week around 10 banks took part in a switching run where lenders closed existing swaps positions in the UK and opened equivalent ones in Germany in preparation for Brexit. (Bloomberg)
The UK pays £160k to its chief statistician but no one wants the job - possibly because it's in Wales. (The Times)
The worst banking interview question. (Wall Street Oasis)
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