Morning Coffee: Bank of America’s small banking MD class conceals this change. BlackRock might have a new awkward squad of employees

On the face of it, the list of promotions to managing director (MD) which Bank of America has just announced looks like it might have raised a few eyebrows.  The overall MD class of ’24 has 387 members, up 16% on last year.  Within that, Jim DeMare’s global markets operation accounts for 65 new promotions, same as 2023.  But what’s happened to the bankers?

Get Morning Coffee ☕ in your inbox. Sign up here.

The Global Corporate and Investment Banking business unit accounted for only 49 new MDs this year, down from 75 last year. In the "global investment banking team" alone, only 22 were promoted, down from 32 last year. There's only one new investment banking MD in Hong Kong and one in Singapore. It’s true that BoA has been running a little bit behind its competition for the first nine months, but this looks like quite a savage punishment.

Or does it?  In fact, the difference really reflects that fact that while markets business is quite homogeneous, “Global Corporate and Investment Banking” contains multitudes.  The most important driver of the year-over-year change is that an internal reclassification moved the Global Transaction Services business line out of Matthew Koder’s reporting line and into a Payments division that’s reported separately.

Overall, there are 22 new Managing Directors in the Global Investment Banking team this year, plus another 15 in Global Capital Markets.  Last year it was 32 in investment banking plus 13 in capital markets.  So the like for like change in the overall promotion of investment banking MDs at BofA is more like 45 going to 37. This is still a substantial drop, but a smaller one than the headline numbers suggest.  

Should the dwindling investment bank MDs come as a surprise? Not really. There was no real reason to expect a bumper year for promotions in the first place. As Goldman Sachs’ David Solomon said yesterday, an optimistic prediction for 2025 might be that deals could recover to their ten-year average or maybe a little better.  That’s not exactly a boom. It makes sense for BoA to keep the criteria quite tight and only give the bump to people with an undeniable case.

The tightness of BofA's banking MD class might even be good news. The bonus pool won’t be affected by a bloated MD class, and BoA have not been hiring externally particularly aggressivel. As deals recover, they will need to hang on to directors and vice-presidents to execute them, and so they ought to be scaling the bonus round with retention in mind.  A fancy title is nice to have, after all, but money in the bank has the advantage that you can spend it.

Elsewhere, it has to be considered at least a little bit odd that in next year’s intramural softball competition, it is going to be possible for BlackRock to field a nine-man team composed entirely of billionaires. (Not including Larry Fink himself, who could be an umpire or coach).  So far this year, the acquisition program has given ten figure payouts to the founder of Prequin, three founders of HPS and five at Global Infrastructure Partners.  All nine are subject to lock-ins and earnouts of one kind or another, which will keep them working at BlackRock for years to come.

This might prove tricky – the thing about billionaires is that they’re often quite difficult to manage. The earnout keeps them locked-in, but people like Mark O’Hare of Prequin, GIP’s Adebayo Ogunlesi and Scott Kapnick of HPS have built substantial businesses themselves, and might not be accustomed to taking orders in a corporate situation.

The billionaire’s club also creates a few substantial wrinkles in BlackRock’s succession planning situation.  Three internal candidates have been given retention awards and described as “senior leaders who we believe will play critical roles in BlackRock’s future”. They are still the most likely successors, but it might be a little bit destabilising to have to share meetings with quite so many very high-calibre new colleagues.

Meanwhile …

Marc Rowan thinks that the financial sponsors world is only going to get more exhausting.  While praising the strength and depth of the Apollo Management team (a question that’s on people’s minds since he was considered for a role in the Trump administration), he noted that “I want to make sure that we have a team that is not tired that wants to win because winning is going to involve changing … The shape of our firms is not going to be the same in the next five years”.  He also warned against being tempted to “take a breath, or take a victory lap”. (Business Insider)

Stemm and its founder Greg Karpovsky have found out the hard way that even being mentioned in someone else’s Russian money-laundering indictment can still be an extinction event for a fintech company. (FT)

After having been widely criticised domestically for letting Andrea Orcel catch them by surprise in the auction of part of their Commerzbank stake, the German government have hired Rothschild to make it a bit more of an even fight. (Bloomberg)

Crypto bros are hoping that Howard Lutnick will continue to be their best friend now that he's moving from Cantor Fitzgerald to the Commerce Department, and that quotes like “I met every criminal who’s now in prison” won’t come back to haunt him. (FT)

India has become one of the hottest IPO markets in Asia in recent years, so it’s not so surprising that this year is set to break records for investment banking bonuses there too. (Mint)

Meanwhile, the UK IPO market, for all the optimism expressed for 2025, looks like it will finish the year behind Malaysia and Oman in terms of money raised. (Bloomberg)

Just in case you were considering a change in the New Year, be aware that the world of “adult live streaming”, rather than being a well-paid, fulfilling and nuturing career, is apparently hellish. (WIRED)

Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, WhatsApp or voicemail). Telegram: @SarahButcher. Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. Signal also available.

Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libellous (in which case it won’t.)