Morning Coffee: The terrible tale of the traders who left HSBC. Is it only the lightweights who are leaving the Gulf?

As the proverb has it, if you lose your job after twelve months, the likelihood is that you screwed up. If you lose it after two days, then whoever hired you screwed up.  Vincent Domier and Matthew O’Neill might be getting a new perspective on this piece of folk wisdom.

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It was only in November that it was announced that they would both be leaving HSBC to join the mysterious but extremely profitable stablecoin firm, Tether.  Domien was HSBC's global head of metals trading and O’Neill the MENA head of precious metals origination, and the idea was apparently to create “the best trading floor for gold in the world.”  Now they’re both out, and the official word from Tether is that the company “always strives to operate with a lean team, and to continuously optimize our operations”.

What’s going on?  It’s not completely clear how long Domien and O’Neill spent at Tether; the original story was published while they were working out their gardening leave.  But presuming that they had industry standard notice periods, and that the news leaked out reasonably soon after their resignations, it’s unlikely that their careers there lasted more than a few months and might have been very short indeed.

One natural explanation might be that having built up a hoard of more than $12bn of bullion last year, Tether might have changed their mind about wanting more.  Although the current gold price would still leave them in profit, it’s fallen by more than 10% since the beginning of March, and hasn’t exactly lived up to expectations of a hedge against geopolitical uncertainty.  But that doesn’t seem to be the issue; according to Tether, “We have been building a state of the art gold team that leverages expertise gathered from all of Tether’s recent investments.”

So if it’s not “plans changed”, then we are looking at explanations of the form “face didn’t fit”. Which isn’t by any means unlikely. Although we don’t know much about Tether’s corporate culture, because nobody seems to know very much about Tether at all, it’s a reasonable guess that it would be significantly different from one of the world’s biggest banks.  Depending on what NDAs might have been signed, we might have to wait a bit to find out or perhaps we never will.

In the meantime, it would by no means be completely unknown for either or both of them to return to HSBC. “Prodigal son” hiring is surprisingly common in the investment banking industry; if someone did a good job before, they are likely to do a good job again.  So unless Domien and O’Neill burnt their bridges, they might be receiving an expression of interest, and even if they did, precious metal trading is currently a very hot hiring market.

Even so, it can’t have been a pleasant experience.  It’s a vivid example of the way in which things can change between the hiring process and employment.  Tether might have to do a bit of explaining to any new high-level hires it wants to make, and at least two former HSBC employees will have learned that if something seems too good to be true, it possibly is.

Elsewhere, when the going gets tough, the tough … stay put?  Although some headhunters have apparently been using the situation in Iran as a way of starting conversations with wealth managers about the benefits of life in Switzerland, more established MENA bankers seem to be less inclined to pick up the phone.  According to one Dubai-based professional, “Longer-term residents are still taking things in their stride for the most part, and are largely content to work from home but otherwise carry on fairly normally”.

The implication appears to be that people who were serious about building a new career in the world’s fastest growing markets are still serious, and that the people who have suddenly begun to feel “a greater openness … to explore opportunities abroad” are the blow-ins and trend-chasers who just wanted a few big paydays.  It might not be the biggest factor in anyone’s decision to stay or go, but apparently the locals and long term expats will definitely judge you.

Meanwhile …

Bankers who are sticking it out in the Gulf have the support of their CEOs.  Lots of senior executives remember the cautionary tale of Citi selling a stake in a Saudi bank in 2004 and not getting an opportunity to return until 2017. (Semafor)

The SpaceX IPO is apparently having its kick-off meeting next week; although there is some uncertainty about “lead left” position, it appears that Michael Grimes, freshly back at Morgan Stanley after his short time working for the US government, will be taking the leading role. (IFRE)

But some bankers will have more eyes on the planned IPO of TK Elevator (the elevator business bought out of ThyssenKrupp by Advent and Cinven).  It’s not such a big deal, but if it does well it might open the gates for private equity  realisations. (Bloomberg)

Although the London IPO market is still very quiet, this isn’t as much of a drag on revenues for the local brokers as it used to be.  Peel Hunt have reported that their full year profit will be considerably higher than analyst expectations. (Financial News)

Deutsche Bank has promoted Joe Lai to be head of investment banking and capital markets for Asia-Pacific. Mayooram Elalingam will stay at the bank but focus on “senior client relationships and strategy development”. (Bloomberg)

After a reorganisation in 2024 which cost it a number of senior bankers, mid market specialists Alantra are building back, hiring Tom Burton from TS Securities to be an MD in its technology team. (Financial News)

Some not so subtle one-upmanship from Chris Rokos, who has given a donation of £190m to Cambridge University.  The previous largest ever gift to a British university was £185m, to Oxford. Interestingly, the gift is to establish a school of government and political thought, rather than finance or AI or anything trendy. (FT)

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