Morning Coffee: Fate of 47 year-old equity salesman who took a year's paternity leave. Crossword puzzles and diseases at the UBS quant lab
It’s been a couple of decades since the days in which it was considered weird or unprofessional for bankers to take an interest in their children beyond paying the school fees and organising them a job in bond broking if they failed their exams. But it’s still not always easy for men to take paternity leave. Expectations and norms differ from bank to bank and some bosses are less than sympathetic when it comes to taking the legal entitlements seriously. Not many places, though, have made senior equity salesmen take a paternity test in order to prove that a kid is theirs,
This is, allegedly, what happened to Glen Wood, a Canadian equity salesman who was working for Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo in 2015. It wasn’t quite the sort of reality-television absurdity that it sounds; the rationale seems to be that he wasn’t married to the child’s mother (and is now a single father) and was unable to provide the usual maternity paperwork which the human resources department demanded. Eventually, on receipt of the DNA swabs, the paternity leave was agreed at one year, in line with Japanese law which provides the same rights to men and women.
On his return, however, Mr Wood was given reduced responsibilities and pay, and perceived that he had been demoted in his absence. From then on, it was a familiar story of a worsening relationship, stress-related illness, unpaid administrative leave and the seemingly unstoppable trajectory to the employment courts for a discrimination claim.
The case has only just begun, and the company contests most of the statements made in Mr Wood’s Youtube video and crowdfunding campaign. But whatever the specific merits, there’s a familiar story here. To some managers, taking family leave is seen as displaying a lack of drive, despite the fact that as a way of getting a paid holiday, bringing a newborn into your household has some obvious drawbacks. And as a single parent, Mr Wood might be one of the few men made subject to the same scepticism about his commitment to putting the firm first which accounts for the motherhood penalty for women.
In any case, when one adds together a general culture in which only 3% of Japanese men take their entitlement, a slightly unconventional family situation which it doesn’t look like the employers did well at taking in their stride and all of the endemic problems of the business of selling Japanese equities to overseas investors (a notoriously difficult market to make money in and where many firms are currently downsizing), it’s not wholly surprising, if a little bit disappointing that things ended up how they did. Even so, things get better year by year (and legal case by legal case), though, and one day soon it may be universally accepted that bankers have families like everyone else and the industry needs to get used to the fact.
Elsewhere, the Quantitative Evidence and Data Science Team at UBS look like they’re having a huge amount of fun. Although they’re data scientists and quants with the usual machine learning background, they need to sell themselves to an internal client base, and that means they have to be a little bit more creative than just drawing backtesting charts. So Brian Cross has found himself adapting models of the spread of disease to forecast the progress of fitness fads, and differential equations to work out whether online estate agents are gathering enough market share to be on the path to viability.
The merger of quant techniques with old fashioned fundamental stock picking is quite common, but interestingly the UBS team’s experience with “alternative data” has made them sceptical; Barry Gill calls it “very expensive” and “a little bit of a bubble” in terms of the pricing of datasets compared to their true value. Instead, they are applying lateral thinking and creativity, drawing on “liberal arts engineering” to recognise analogous situations across sectors and domains. As one might expect, they’re big fans of intellectual games; Mr Cross bought his wife tickets to a crossword puzzle competition as a Christmas present.
The FCA is taking a hard line with people who delete their WhatsApp messages – if they believe that you did it in order to destroy evidence of wrongdoing, they are prepared to bring a prosecution for obstructing an investigation. Your only defence will be to prove that your motives were innocent, or that you believed they could have got the information some other way. (Financial News)
Quite the “man bites dog” story – the new activist investor in Mediobanca is calling on the management to get rid of consumer credit and insurance and concentrate on beefing up the investment bank. (Reuters)
Give speeches, join interest groups but most of all, keep your address up to date in the alumni directory. Tips on how to use your business school or university network to best effect (Harvard Business Review)
GS Accelerate is the new incubator for start-up business ideas from Goldman Sachs employees (CNBC)
Ray Dalio continues to indulge his hobby of inventing new Principles on LinkedIn – the latest one admits that “make your passion and work the same thing” isn’t always realistic but suggests “the cleverer you are, the fewer compromises you have to make” (Bloomberg)
Marco Lopez de Prado wrote the book (literally) on machine learning in finance. After spending slightly less than a year at AQR (he left “amicably”) he’s now setting up a consultancy to help anyone jumping on the ML bandwagon to do it properly. His ambition, though, is to make finance “scientific” and therefore “boring”.(Bloomberg)
Juerg Zeltner may not get his spot as the voice of Qatar on the Deutsche Bank board after all; the supervisor is apparently set to veto it on the basis that his other banking job constitutes a conflict of interest (FT)
The rush to complete a large percentage of the day’s volume in the closing five minutes is leading to traders having accidents – recently one unnamed individual lost €2.2m when he was only able to enter half of a two-stage trade. (Financial News)
“If you’re not comfortable talking about genitalia, you shouldn’t be in the financial industry”. Not something you’d expect to hear at an investment conference (although it would make a slightly more interesting screen poll question than the usual). The moderator of the “fireside chat” where billionaire asset manager Ken Fisher dropped this bombshell was unsurprisingly unavailable for comment. (Bloomberg)
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