Morning Coffee: Overburdened 50-year-old banker compelled to do less work. When family offices go wrong

In the febrile atmosphere surrounding junior bankers' working hours after the unofficial Goldman Sachs analyst survey, a demographic fault line is emerging. While older, senior bankers are presumed to be living in large and airy homes and spending evenings with their families, younger, more junior bankers complain of being asked to work from childhood bedrooms or solitary apartments until the early hours. - "At the nighttime, when all the MDs log off and go spend time with their families, that's when the materials get moved forward, when people move forward the memos and the presentations and all of the things that aid the calls for the next day," one Credit Suisse analyst told Business Insider in a complaint representative of the genre.

The presumption that senior bankers have it easy, however, may be an oversimplification. At the top of the tree, some have accumulated far too many responsibilities.

Christian Sewing, the 50-year-old CEO of Deutsche Bank is among this group. After getting rid of Deutsche's equities sales and trading division and ejecting the former head of the investment bank, Garth Ritchie in 2019, Sewing added personal control of the investment bank to his roster of other responsibilities. Nearly two years later, there are worries he's doing too much.

Under pressure from the regulator, which reportedly thinks he's 'overburdened', Bloomberg reports that Sewing is preparing to give up his side job. A successor as head of the investment bank will probably be named in the next few months and that successor will very probably be Fabrizio Campelli, currently Deutsche Bank's transformation officer, and previously an investment banker, strategy officer, and head of the private bank. 

The divestment of some of his responsibilities will presumably give the still-youthful Sewing a bit of extra time to himself in the evenings and at weekends. The regulator wasn't alone in thinking he was doing too much - investors were also spotted complaining in November 2019. The complaints were almost certainly justified: Sewing isn't the kind of boss to issue a few vague commandments before retiring to his 'Ferienheim'; at one point Sewing was demanding that he personally signed-off all new hires.  

The fact that it's taken Sewing quite so long to appoint a separate head of the investment bank suggests he's been in no rush to work less. Given the recent success of Deutsche's investment bank and its importance to Deutsche's overall health, this is probably just as well. - Sewing can credit himself with having done a good job. However, at his level of seniority, this is not enough. Junior bankers may wish that managing directors would intervene and command them to get some sleep, but when you're CEO of an entire bank your potential to make disastrous mistakes borne of exhaustion is policed more keenly. If a logo is misaligned at 3am, the share price is hardly going to suffer...

Separately, as hedge funds rush to convert themselves into family offices, we now have a real-time example of what can happen when one goes wrong. Following tens of billions of mysterious of block trade sales executed on Friday by Goldman Sachs and others, (prompting comments like, “I’ve never seen something of this magnitude in my 25-year career,”) it became apparent yesterday that the seller was in fact Archegos Capital, a private investment firm founded by Richard Kang, formerly an analyst at Tiger Asia Management. On Sunday, Archegos' website was taken offline. The FT tried to call its head trader, who hung up. 

The implications of the Archegos unwinding - described by Bloomberg as "one of the greatest margin calls of all time" - and seemingly precipitated by Goldman Sachs - are only just becoming clear. Credit Suisse and Nomura have already warned of 'significant losses' from their exposure to the fund, with Nomura thought to have lost $2bn and Credit Suisse thought to have lost up to $4bn. The fear is that other prime brokers will be prompted to make their own margin calls as a result and that the situation could snowball... 

Meanwhile...

"Some of our managing directors — these guys are 55, 60 years old — they've never once tried to use Microsoft Excel in their lives. They have no idea how long any of this takes." (Business Insider) 

The entire point of working 24 hours a day, for days on end, and canceling weeknight dates with Kate Upton, Las Vegas bachelor parties with George Clooney and Brad Pitt, and Christmas holidays with the Pope of all Christendom at the last possible minute is that the entire investment bank works at the pleasure and whim of clients who pay us a small fortune to do so. (Epicurean Dealmaker) 

A VP at a private equity firm in New York who worked as an analyst at JPMorgan a few years ago remembers being assigned work based on offhand comments a client made at a meeting. “You’d go to the meeting and someone would say, ‘I didn’t know I asked for that. And you’d just spent 80 hours on it.” (New York Times) 

“Every time I leave my screen to go for a walk or take a break I need to communicate it to my VP,” said an analyst at a boutique investment bank. “Everyone is constantly scared about being monitored . . . it’s a huge breach of our privacy.”  (Financial Times)

The advantage of crazy hours as a junior banker: 'Despite the stress and sleeplessness, I was able to complete tasks with a competency that I had spent years training for. More than that, I proved to myself that I could function and even excel in this fast paced, high stress environment. Call it a boot camp, but the experience would later open doors for me, and I was paid handsomely for my efforts.' (Financial Times) 

Jane Street hired Barclays' MD Aaron Katzman to trade single stock options. (Business Insider) 

Citi hired Erika Irish Brown from Goldman Sachs as its new chief of diversity. (Financial News)  

HSBC's internship will start-off online but might move into the office. (Financial News) 

Goldman Sachs told staff in its Bengalaru office to go back home again as cases of COVID grow. (Business Standard) 

Inside Citi's Singapore "lush banking conservatory" with hydroponically-grown rain forest plants. (Dezeen) 

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