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Landing a job on the buy-side is a notoriously difficult task. The sheer number of people who apply to work at hedge funds, private equity firms and venture capitalists means you’ll likely need a blue-chip resume just to earn an interview. An MBA can help you separate yourself from the herd.

We scoured our CV database containing more than 900k resumes to identify the business schools that will give you the best chance for a career on the buy-side. As one would imagine, the list is made up of top programs, with U.S. business schools being the biggest feeder of talent. There were some surprises, however. Graduates of NYU’s Stern School of Business, a top destination for prospective investment bankers, don’t populate as many chairs on the buy-side as one might think. There are also fairly large gaps between top-rated programs in Europe and Asia. Columbia edging out Harvard and Wharton may come as a surprise to some, though it finished atop the list last year as well and was second in 2016.

The rankings are made up of the MBA programs with the highest percentage of graduates from each school who are currently working at hedge funds, private equity firms or venture capitalists. Schools included in the rankings needed to hit a minimum threshold of current buy-side employees and total MBAs grads within our database to be statistically significant, hence the omission of Stanford Graduate School of Business, which does well within the VC world but provides too small of a sample size overall.

It’s important to note that the rankings are based on the percentage of graduates from each business school working at hedge funds, private equity firms and VCs, not the overall total. MBA programs with larger enrollments like Wharton, Columbia, Harvard, Booth, INSEAD and London Business School account for the greatest number of buy-side employees, but the rankings are shifted slightly because a few other qualifying programs enroll fewer students yet sport higher percentages. An argument can be made to give those five schools an extra bump as more of their alumni are in the business and can help make introductions, though they all rank very highly anyway.

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Banks have a well-deserved reputation for promoting bad managers, but I would challenge anyone to produce a manager worse than my own. He is a guy with big problems.

He’s been here years and has struggled with stress for a long time. He himself was afflicted with a very aggressive manager in the past, and took some time out. Now he’s back and like the playground bully, is visiting his past traumas on his team. There are eight of us, and he’s our defacto boss.

He sits there, stony-faced, slamming his mouse and his keyboard for almost no reason and cursing quietly so that you can just about hear. We rarely have the guts to approach him, and when we do he says he’s too busy to talk to us. The only time he perks up is lunch (always a burger) or at the prospect of a trip to the U.S., where he seems to max out his expense card (we get to see the fancy restaurants he’s taken clients to). The rest of the time, he sits there, seething.

Why was he promoted? Your guess is as good as mine. Other teams are aware of his reputation and regularly commiserate with us. The head of the division likes him, though, and the feeling appears to be mutual as he’s all-smiles when the big boss comes around.

I suspect that his success also has something to do with HR. They know that this guy himself was bullied in the past and took some time out and they don’t want to risk him leaving again and potentially suing the bank for discrimination (he’s Asian). Either way, HR are doing nothing.

The situation is untenable, but we remain here like rabbits in the headlights. Most of us have been here for years and we don’t want to swap jobs now because moving banks would entail giving up our amassed redundancy packages, but working alongside our boss is like sitting in a room with a bee’s nest that has to be approached very carefully. Any suggestions would be greatly appreciated.

Caspar Abeln is the pseudonym of a VP in a U.S bank

Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com
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 libelous (in which case it won’t.)

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Following the social networking apps craze, Silicon Valley is now hosting a new tribe: the FinTechpreneurs. A deluge of East Coast tech talent from investment banks have traded their ties and jackets for flip-flops and sunshine. Since 2009, more than 7,500 fintech firms have been launched globally, with hundreds popping up in the Bay area alone. Annual funding of fintech startups jumped from $5.1bn to $28.4bn from 2009 to 2015, according to Accenture.

While the fintech craze was born mostly from business opportunity, many banking technologists have left the sell-side for personal reasons as well. For one founder, launching her own financial startup was a no-brainer, considering the quality of life with her former employer – a major British bank.

“Having very few moments for yourself and your personal life was very difficult,” says the founder, requesting anonymity. “I wasn’t prepared to do this sacrifice for the job. Unfortunately, there was not a good balance between work life and personal life no matter what management was trying to implement to improve it.”

While choosing to launch a startup was an obvious choice for the young CEO seeking a better work-life balance, the heyday of fintech may now be in the rear-view mirror. New entrants to the industry – many with traditional banking backgrounds and no experience with startup culture – have been surprised with the lack of traction they’ve gained. Market saturation, a lack of recent fundraising and the growing presence of their former employers – bulge bracket banks – have made life difficult for many fintech entrepreneurs.

“Entrepreneurship is not for everyone. It’s an awesome ride but it’s a wild one,” says one French-American founder based in New York. “You have to be OK to live with uncertainty. You never know what will happen tomorrow, next week or next month.”

Indeed, less than 10% of startups are still running after two years. Industry professionals tell us the odds aren’t much better in fintech. Many banking technologists get tripped up dealing with fundraisers – a key aspect of the job they had no exposure to in their previous life.

“Venture capitalists are complaining about longer return on investments. They are more wary – some of them even say fintech is not that ‘hot’ anymore,” said Robert Naess, CIO of Nordea Bank and head of its portfolio. Many VCs look at fintech as highly likely to become “a bubble,” he said.

VC investments in fintech in the U.K. actually declined by a third from 2015 to 2016, despite the fact that the number of deals increased by 5% over that time, according to Accenture. The activity is there, but the idea that fintech will foster the next round of startup unicorns is starting to fade. It’s not 2015 anymore.

The reality is that success for many fintech companies is not disruption, but simply being bought out by large banks that incorporate their technology. So far, the deals haven’t broken any records. Others have been forced to partner with investment banks to get their product off the ground, and not necessarily through traditional investments. J.P. Morgan operates an in-residence program that acts as an incubator for fintech startups – typically launched by former employees – where the bank ultimately decides whether to go to market or keep the technology proprietary. Many competing banks have jumped on board, embracing Blockchain, AI and cryptocurrencies, further crowding the field with companies that have near-unlimited financing and huge existing customer bases.

In order to stay afloat, many fintech startups have no other option than to look to big banks. But fintech CEOs have struggled with traditional institutions’ lack of agility, willingness to partner and culture fit, according to the Capgemini World Fintech Report.

The end result is more stories like that of Jonathan Birnbaum, a former star Morgan Stanley trader who made Forbes’ top 30 under 30 finance list before quitting the firm to launch a fintech startup. Just six months later, he returned to finance at hedge fund behemoth Bridgewater Associates. Working in fintech isn’t all roses, it appears.

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Making managing director is often the highlight of anyone’s career in investment banking, and it was for me too when I reached that rank at UBS in Hong Kong. But unlike many freshly-minted MDs, I didn’t celebrate the milestone with a round of extravagant spending on high-end brands. And throughout my time as an MD I didn’t feel the need for designer goods – I wore a Timex, not a Rolex, for example.

Why do a lot of MDs have a passion for luxury items? And why don’t I? Let me explain.

What bankers buy

Bankers in Asia tend to prefer big global brands over local boutique labels. Many senior bankers don’t think twice about spending US$50k on a watch, and Patek Phillippe is an obvious choice if they don’t go for an Audemars Piguet. For suits, it’s often Zegna or Tom Ford, complemented by a Hermès tie. And if you see someone with a Tumi briefcase and carry-on luggage on a plane between Singapore and Hong Kong, you know he or she is probably a banker. Some bankers use their MD promotion to make more substantial lifestyle upgrades, such as trading in their Porsche for a Ferrari.

Why bankers spend so lavishly

Having seen many people get promoted during more than 20 years working in banking, I think that lavish spending on well-known luxury brands is largely to celebrate hard-earned titles. Some bankers have no time to shop, so by purchasing big brands they know they “can’t go wrong”. Others may want people to see and recognise their possessions. Their message is: ‘I have arrived! Look at my watch and look at my car!’. I’m embarrassed to admit that I had this mentality when I became a vice president some 15 years ago.

Why didn’t I splash out?

So why didn’t I spend as much as some other new MDs? And why would I advise that senior bankers keep their spending in check? There are several reasons:

The thrill never lasts

You typically only enjoy something during the first few weeks of owning it – then the novelty wears off. So why bother buying top-range brands when there are so many excellent middle-market alternatives out there? I find my Muji bags good enough when I travel. My Audi cars (no Ferraris) have served me well wherever I have worked, be it Singapore, Shanghai or Hong Kong.

Big-brand items aren’t always practical

Some of the expensive things that bankers like buying aren’t always practical, especially when you’re travelling a lot. Expensive cuff links and French-cuff shirts are almost a standard among male bankers. But I avoid both. It’s annoying on a business trip if you forget your cuffs – your shirts become unusable. I once had to buy two loaves of bread just to get some twist-ties to keep my shirt cuffs together. As a banker, my focus should be on serving clients, not on worrying about the expensive watch that I just remembered I left in my hotel room.

MD-level job security isn’t great

The MD rank is no guarantee of job security. In fact, senior bankers have been more likely to be laid off in recent years. And if you lose your MD job, it’s disproportionally difficulty to find one that pays a similar salary and bonus – banks in Asia don’t hire much at this level. In short, a flashy lifestyle is potentially unsustainable because it’s linked to one’s ability to make an ever-increasing yearly revenue budget. When I became an MD in 2011, I was a bit nervous because I’d seen many people get made redundant shortly after being promoted. And throughout my time as a senior banker, I was always grateful and didn’t assume my job would be there forever. So I simply wasn’t willing to boost my spending.

It’s better to save

By not spending so much when I was an MD, I was able to set more money aside so that I could maintain my lifestyle when I retired from the industry, and could be my own boss, and do something I love. And I’ve been able to achieve my goal – I set up a training and career coaching firm in 2016, continued my university teaching and now also blog to 2.5m followers on LinkedIn.

I prefer the personal touch

Here’s an example of a cheaper product being more effective: As a banker, I didn’t write with a pricey Montblanc; I always used Pilot pens and would make large orders of them with my name and email address printed on each one. I’d give them away to clients and potential clients, who would have a reminder of me on their desks. I tailored my suits not only because it was cheaper than buying off the rack, but also because I like to have pockets for my iPhone and access cards.

My habit of comparing prices

Noticing my Timex watch, an analyst once asked me why I didn’t wear a ‘proper’ watch that seniors bankers typically wear. I told him that it was partly because my modest family background (my mother worked two jobs just to get money to buy groceries) meant I’d always been ‘price sensitive’. I still have a bad habit of comparing prices between different supermarkets, for example, even though I can probably afford to buy anything on their shelves.

Eric Sim is a former UBS managing director who’s now the founder of career training school Institute of Life in Hong Kong. He’s also a guest lecturer at Renmin University and Tsinghua University’s Schwarzman College.

If you’re working at Bank of America, did you wake up with an extra bounce in your walk today, from the knowledge that according to Euromoney, your employer is officially the World’s Best Bank? And Citi employees, how does it feel to be the World’s Best Investment Bankers? The year-long reign of HSBC and Morgan Stanley has come to an end, and the bragging rights have been redistributed. Jean-Pierre Mustier is no longer the Banker of the Year – that title is now held by Tidjane Thiam of Credit Suisse. It’s all a bit of fun – or is it?

Well, it is all a bit of fun, but it’s not just a bit of fun. Banks put in a surprising amount of lobbying to win these titles and Euromoney’s editorial team put in the hours reviewing them. There were 1,500 submissions in total for the awards programme in total (20 global awards, 50 regional awards, and “Best Bank in ….” awards for nearly 100 countries). The judging process took four months and required over a thousand interviews. People are taking this a little bit more seriously than your average industry awards ceremony with a prosecco and chicken supper and 30 minutes of banter from a comedian in a dinner jacket.

The reason is that these “World’s Best” awards look absolutely fantastic in a pitchbook. The “credentials” slide is always one of the most important in any deck when you’re trying to get new business, because it’s the one that tells the clients what they really want to know. And since everyone is exaggerating their achievements, it’s valuable beyond belief to have a big gold star on that slide demonstrating that an informed outside judge with no particular conflict of interest thinks that your bank is the best at what they do.

That’s why the real value that was distributed at the ceremony last night is in the global category awards. Things like “World’s Best Bank” and “Banker of the Year” are not really specific enough to motivate a transaction. Potential clients might see them (probably correctly) as awards for having a currently fashionable business model, a rising share price and managing to avoid any really damaging scandals that year. But “Best Bank For Transaction Services” (HSBC) or “Best Bank For Sustainable Financing” (BNP Paribas) – to a client interested in doing some business in that space, this is a title very much worth having.

And related to this, winning the category awards is great news for bonus expectations. It’s unlikely that many people at BoA are really expecting a better compensation round for winning the overall gold star. But the heads of divisions who won “Best Bank For Financial Institutions” (Morgan Stanley) or “Best Digital Bank” (DBS) will not only be expecting a good year’s compensation round themselves, but will be able to make a pretty good case to the C-Suite that their world-beating franchise is delivering results and needs to be paid up in order to keep the team together. Congratulations to everyone who won.

Commiserations to anyone who was hoping for a good result from the UK government’s Brexit White Paper, which was about as disappointing for London’s bankers as Wednesday’s football score. It was finally confirmed that there is basically no hope for UK finance that the “passport” which allows them to do business all over the EU will remain, and the “mutual recognition” approach which was proposed as an alternative to it has been recognised as unacceptable to Europe. Instead, British banks will do business on the basis of “regulatory equivalence”, the same regime as US firms, to the very great dissatisfaction of industry associations. The Brits still hope that they can agree an “expanded” version of regulatory equivalence, but at present this doesn’t look likely. The European Securities Markets Authority has warned UK firms currently doing business in Europe under the passport that they only have until the end of July to get in their applications for a securities business authorisation in one of the EU27 states, and that they shouldn’t be relying on a transition period.

Meanwhile

Philippe Moryoussef, formerly of Barclays, was found guilty in the Euribor-rigging trial, while Achim Kraemer was found not guilty and remains employed by Deutsche Bank. The jury failed to reach a verdict on the other three defendants, who were all former Barclays employees. (Financial Times)

Jacques Ripoll of Santander will be replacing Jean-Yves Hocher at Crédit Agricole CIB when he retires this year. (Financial News)

The New York Department of Financial Services wants fintech lenders to be regulated to the same standards as conventional ones. At present, many online operations partner with national banks who are recorded as the “true lender” and thus avoid state-level usury laws. (Finextra)

Morgan Stanley has an AI platform, called “next best action”, which draws on a database of hundreds of conversations with its advisors to make recommendations. (American Banker)

A former department head at Citibank now offers guided trips to follow the path of Guru Rinpoche in Nepal. (Entrepreneur)

Deutsche, Rabobank, Unicredit and other European banks have launched we.trade, the first live trade finance platform to run on blockchain technology. They have had ten customers use it in the first five days. (Forbes)

Arabesque, the quant fund, has run data on various metrics to score global companies on environmental, social and governance issues. Lots of European banks did badly, but Deutsche Bank (partly as a result of governance issues and layoffs) was among the worst, ranking number 6,539 out of 6,700. (Financial News)

Christopher Lawrence, the rainmaker at Rothschild responsible for deals like Intel/Mobileye and American/US Airways, will be joining Lazard as head of global financial advisory. (Reuters)

No banks (unless you count Fannie Mae) in the top ten workplaces. (Indeed)

An unnamed J.P. Morgan employee has got a record $30m whistle blower award from the CFTC for speaking up about conflicts of interest with asset management clients. (Bloomberg)

Image credit: lankogal, Getty

If you make it to the top of banking, you’re going to be part of the 1%. Congratulations! Except, that this comes with some downsides: success can breed envy and criticism. If you want to handle this without turning resentful and aloof, you need to cultivate the right mindset. Here’s what that looks like.

Personally, I recently reached a major milestone in my life: my 40^th birthday. It’s a cliché, yes, but this midlife marker has caused me to look at my life and to consider my priorities.

When I first started out, my biggest focus was on all the money I could earn. After eighteen years of experience, and making money….the money is no longer the most important thing.

Instead, my goal now is to pursue all the wisdom and happiness I can gather. Over the course of my career, I’ve come to realize that nothing in life, whether good or bad, will last forever.

If you want to keep your head in finance, you’ll need to be a stoic. Focus only on what you can control. I try to spend my time controlling what I focus on – my goals, and my values. The rest is out of my power, so there is no sense in stressing over it. I now know that I don’t get to control the outcome, the result, or other people’s actions.

I also try to avoid feeling flattered or forlorn about other people’s opinions of me. I don’t want to spend all my time and energy chasing the latest status symbol to elevate me in the eyes of others.

I try to be humble. Over my demanding career, one of my favorite pursuits has been to remain modest at all times. No matter how far I have got or what I have done, I’ve tried to be like the Romans who were continuously reminded of their mortality after battlefield successes. – Remember we are just ants crawling around on a big rock and none of this matters. Being humble also helps to protect you against the loss of all that you have accomplished. Slow down, enjoy people: we are all on this crazy journey called life together.

I try to help people and I feel like this is one of the best ways of dealing with feelings of envy and criticism. – Help people who have less and who aren’t as lucky. – Help the new guy learn the ropes.

Most of all, I try to remember that I didn’t get here alone. I had help from friends and mentors along the way and it’s now my turn to pay it forward and return the favors and the wisdom to my mentees, In doing so, I’m helping others and facilitating my own personal growth.

Here’s to another ten years of hard work!

The author is one of a group of senior bankers who blog at the site What I Learnt on Wall Street.

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Contact: sbutcher@efinancialcareers.com

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Goldman Sachs has poached a senior corporate derivatives executive from UBS as it seeks to grow the business under assumed CEO-in-waiting David Solomon. Former UBS executive director Andrew Bisset will start with Goldman after his gardening leave period is up, according to sources.

The move comes just a month after Solomon, Goldman’s current COO, provided a strategy update for investors in which he singled out the bank’s corporate derivatives business as an area of focus. Goldman Sachs finished 2017 with the fourth-ranked corporate derivatives franchise, but Solomon indicated at the time that the bank planned to grow the team.

The hire comes at a somewhat tumultuous time for Goldman’s equity derivatives business, at least in Europe. Several high-profile traders have recently left the bank, including executive directors Francesco Taglietti and James Spooner in May. Nick Laux, the London-based head of single stocks derivatives trading and a Goldman Sachs lifer, is also said to have left the bank, as has Jean Paul Gorda, an executive director in equity derivatives sales in Paris. The departures follow a number of big-name equity derivatives hires earlier in the year.

Bisset, who is based out of New York, spent the last decade at UBS following a two-year stint at Lehman Brothers, where he was a risk solutions analyst, according to LinkedIn. Neither Goldman or Bisset responded to requests for comment on the hire.

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J.P. Morgan and Citigroup each booked strong second quarter performances, with profits increasing 18% and 16%, respectively. But J.P. Morgan’s investment bank and securities businesses shined in Q2, shattering expectations on route to a big payday for its bankers and traders.

Investment banking fees at J.P. Morgan were record-breaking, reaching nearly $2.2 billion on the back of a 24% increase in M&A fees compared to a 14% jump at Citi. IPO bankers also fared well at Citigroup, increasing fees by 8% to $335m. At JPM, meanwhile, equity underwriting revenues were up a ridiculous 49% to $570m. Each business line was expected to show marked signs of improvement with M&A and IPO activity spiking during Q2, but J.P. Morgan bankers took better advantage of the environment. Debt underwriting fees were down 1% at J.P. Morgan and 20% at Citi year-over-year.

In sales and trading, J.P. Morgan was particularly adept. Markets revenues were expected to remain somewhat flat during the second quarter as average trading volume on the NYSE declined by more than 8% between quarters. Yet J.P. Morgan’s markets revenues increased 13% to $5.4b, beating expectations by $500m. Equity trading revenues were up 24% year-over-year while fixed income revenues climbed 7%.

Meanwhile, Citi’s markets revenues met street expectations, falling by 1% to $4.5b. Equities traders did well, however, increasing revenues by 19%. The gains were offset by Citi’s fixed income business, which saw revenues decrease by 6% year-over-year.

The end result is a financial windfall for investment bankers and traders at J.P. Morgan. Compensation totals within its corporate and investment bank (CIB) were up 11% compared to Q2 of 2017. The bank shed around 800 jobs overall during the quarter, but added more than 200 staffers within its CIB. Compensation at Citi remained flat.

The results suggest that Goldman Sachs and Morgan Stanley may be next week’s earnings darlings. Both banks rely heavily on their huge investment banking and markets businesses, though JPM’s traders could have simply had a banner quarter that won’t be replicated by rivals.

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Working flexibly means that Andrea Chan is able to attend her children’s school events and be involved in their education. A Division Director in Macquarie’s Commodities and Global Markets team based in the Hong Kong office, Andrea says being able to work flexibly allows her to be present and “does away with a lot of guilt and distraction”.

Recognising that flexible working means different things to different people, Macquarie’s approach is to empower its staff to manage their professional commitments to suit their own personal situation, and equips its people managers to lead a flexible workforce. For Andrea, that means a four day work week, having Fridays off but says she is flexible with her days and changes it based on business and team needs.

In addition to spending more time with her children, Andrea uses her flexibility to volunteer, running better education programs in schools for an NGO.

Macquarie recognises that flexibility is a key enabler of productivity and engagement and is committed to providing a flexible workplace that supports its people to reach their full potential.

Recognising that not all financial institutions offer flexible work arrangements, Andrea says she approached her manager “gingerly, but hopefully” when discussing her need for flexibility but was met with a positive response. Understanding what she needs to achieve, Andrea manages her deliverables regardless of which days she is in the office and balances family life and volunteering whilst holding her senior position at Macquarie.

Having more time to spend with her two young children as well as giving back to the community, Andrea says that she is very thankful that both her manager and Macquarie support her flexible work arrangement. This view is supported by Biju Joseph Jacob in Macquarie’s Singapore office.

When Biju approached his manager about working flexibly so he could further his study, he was met with a “very positive response”. Going back to university to study a Master’s degree in Management and to pursue the Chartered Financial Analyst exams meant that Biju would need to attend morning classes once a week. He wanted to keep his fulltime workload, so after a conversation with his manager who Biju says was “extremely supportive of this initiative”, they worked out a personalised flexible working arrangement that allowed him to attend classes and sit his exams without reducing his work hours.

Biju is a senior manager and sits within Macquarie’s Technology team, supporting the Equity Derivatives and Trading business as a software developer. Once a week he comes in to the office in the afternoon and works late into the evening. The arrangement, which has been in place for the past two years, means that he can both maintain his fulltime work and attend his classes.

“The flexible working policy has enabled me to complete my Master’s degree and to pursue the Chartered Financial Analyst exams. These studies have not only helped me personally by equipping me with up-to-date technological, financial and management skills, but has also motivated me to contribute more back to the firm,” Biju said.

“Flexible working does not come at the cost of one’s career growth. Instead it provides a mechanism for an employee to perform at their peak. The ability for me to bring back modern academic concepts to use at work has been very valuable.”

As technology continues to evolve to allow greater freedom to perform work from different locations and in different ways, Biju says that he was able to utilise Macquarie’s flexible-working technology to stay connected, regardless of where he was.

Set to graduate this month, Biju says he has already “taken on additional responsibility, making my role more aligned with my newly acquired skillset.”

Andrea and Biju’s stories aren’t unique at Macquarie, with employees working flexibly for many years in different ways across their offices globally. To further promote flexibility, Macquarie employees across Asia are celebrating #flexweek, an initiative introduced to further encourage workplace flexibility and to promote the range of options available to its employees.

Find out more about a career at Macquarie: www.macquarie.com/careers.

Many new entrants into banking complain about the culture, often comparing it enviously to that of the tech world, where their former classmates are strolling into the office in jeans while banging out work on a beanbag chair. But what would a traditional bank even look like if it embraced a more laidback culture? And would employees actually prefer it? Berkshire Hills Bank is providing some answers to both those questions.

The somewhat unknown Boston-based bank has quietly grown its assets from $1b to $11.5b since 2002, when it was taken over by unconventional chief executive Michael Daly. “We’re not boring,” Daly told the Wall Street Journal in an exposé. Dubbed “America’s most exciting bank” (by Daly himself), Berkshire Hills doesn’t allow employees to wear suits, plays rock music at every meeting and hosted lip-sync battles where bankers dressed up like members of the band KISS. Daly even once “let it rain” at an employee town hall, throwing out $100 bills to a crowd of employees.

Daly’s unconventional leadership style pushes beyond fun and games, however. He writes hundreds of handwritten notes to his 1,900 employees every month and hands out his cellphone number to new employees who join via acquisition, encouraging them to “come get in [his] face” to prove they’re worth keeping around, according to the Journal. He’s been known to hire outside of traditional channels to find talent, including bringing on two former clothing store salespeople who impressed Daly with their energy.

Does every employee love the culture? Daly acknowledged that not all do, noting executives who don’t buy in tend to move on rather quickly. Roughly 40 employee reviews on Glassdoor paint a muddled picture, with some staff applauding the relaxed dress code and culture while others complained about a lack of training and “juvenile” co-workers. The average Glassdoor rating is a 2.1 out of 5; Daly has a 33% approval rating from employees. Berkshire Hills is a retail bank, but it’s building up its wealth management, private banking and commercial lending businesses.

Elsewhere, the co-owner of a London private equity firm may have taken the cake for the worst office party foul in the industry. Elvaston Capital’s Oliver Thum allegedly brought his mistress to the office shindig, prompting his wife to file for divorce two days later, according to the Telegraph.

Meanwhile:

Here are the average Wall Street salaries and bonuses for all five traditional banking titles. The biggest percentage increase is the difference in pay for VPs who get promoted to director. (Business Insider)

Despite plans to move 500 workers to the EU post-Brexit, Goldman Sachs has committed to occupying nearly every seat at its new London headquarters. (The Telegraph)

Roughly 4,500 tech workers from companies like Google are banding together to create a volunteer network that helps Democrats utilize digital mediums to reach voters. (NY Times)

Around 40% of J.P. Morgan senior tech hires come from traditional technology companies, rather than rival banks. (Business Times)

Hedge fund Millennium Management is considering moving from its 5th Avenue office space owned by Kushner Cos., the real estate developer formerly headed by President Trump’s son-in-law. (NY Post)

A sculpture made out of coins that depicted a beggar bent over a bowl was apparently not earmarked for its location outside the Royal Exchange in downtown London. The installation was unauthorized, hence the statue’s eventual removal, but nobody knows who built it or how it was installed without anyone noticing. (The Times)

Traders on the NYSE used to wear hats on every Friday the 13th to ward off bad luck. The tradition ended when a reporter snuck onto the trading floor and wrote an article titled “The Fat Cats in Hats.” (Business Insider)

Wearing a tie may reduce blood flow to your brain, according to a new study. (New Scientist)

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So much for Deutsche Bank’s 70 layoffs a day in May and June 2018: the German bank’s preliminary Q2 results, released unexpectedly today, reveal that only around 40 jobs each working day (1,700 in total) were eliminated in the two months after CEO Christian Sewing took over in April. Maybe Sewing decided to go easy on his front office bankers people after all? Even so, Deutsche’s corporate and investment bank (CIB) kept on losing market share.

As a quick recap, Sewing said in April that he intended to cut 7,000 jobs across the bank. Around 5,000 of these (although Sewing didn’t exactly say so) were expected to come from the CIB. At the end of May, Sewing said he planned to make all the front office CIB job cuts in June – implying around 2,200 front office job cuts in a month based on the fact that 45% of Deutsche’s CIB staff are in the front office (and presuming that the cuts were made in proportion to this).

The fact that just 1,700 jobs have been eliminated therefore implies that Deutsche’s front office bankers got off very lightly. Yes, emerging markets bankers, oil and gas bankers, equity structurers, healthcare bankers, prime brokerage personnel, and U.S. rates people have gone (among others), but it could have been much worse. Even so, Sewing’s strategy is showing signs of shakiness: as bankers are falling away, so – seemingly – is Deutsche Bank’s market share.

So far, only J.P. Morgan and Citi have divulged their results for the second quarter of 2018. Based on today’s limited revelations from Deutsche Bank (DB only gave overall revenue figures for all trading and for the whole of its investment banking division), Deutsche’s traders and its investment bankers lost share to their counterparts in the second quarter of 2018 – only the woeful performance of Citi’s investment bankers was worse. More worryingly – and as the second chart below shows – Deutsche’s traders and bankers also lost significant share to their two U.S. rivals in the first half of this year as a whole. And while Deutsche is losing, J.P. Morgan seems to be growing.

Sewing may not care about the shriveling share of Deutsche’s investment bank. – He is after all, a retail banker, who is widely expected to pivot to what he knows. However, Sewing has also said that he wants the investment bank to remain core to Deutsche’s DNA. We’ll only really know how Deutsche compares once other banks report over the next few weeks. For the moment, though, Sewing seems to be proving the adage that you can’t shrink to glory – and that if you try to, U.S. investment banks will take advantage of your diminution.

““

Deutsche Bank doesn’t want its best traders to leave. As we reported previously, the German bank is both making its traders work during their notice periods and offering them higher pay as an inducement to stay. Even so, traders are leaving Deutsche Bank – and turning up at Goldman Sachs.

Goldman’s most recent Deutsche Bank recruits include Dennis Cheng, a portfolio sales trader who was a vice president (VP) at Deutsche and just joined Goldman as an executive director in Hong Kong. Goldman also hired Christoph Gau, an ex-structured bond trader at Deutsche in London. Gau too joined as an ED. He will based in London and responsible for credit trading and illiquids.

Deutsche Bank is cutting 7,000 people from across the bank as it seeks to reduce costs under new CEO Christian Sewing. The German bank said today that it cut 1,700 people in the second quarter of 2018 – mostly in May and June. However, neither Cheng nor Gau were in roles Sewing highlighted for reduction, suggesting both may have gone to Goldman voluntarily.

They’re not the first. At least three members of Deutsche bank’s structured solutions team left for Goldman Sachs earlier this year. As Deutsche Bank is shrinking its investment bank, Goldman Sachs is pursuing $5bn in extra revenues over the next three years, of which $1bn is expected to come from fixed income currencies and commodities (FICC). As it goes for growth, Goldman is also hiring unusually high numbers of executive directors externally.

Some Deutsche staff seem to have decided that a move to Goldman is a career trade worth making.

““

The 2018 drought isn’t just restricted to Northern Europe. Today’s second quarter results from Bank of America suggest the U.S. bank’s M&A bankers saw very little rain in the three months to June, too. While rivals’ M&A revenues increased, BofA’s withered on the vine.

The chart below reflects BofA’s M&A aridity. While J.P. Morgan and Citi saw M&A revenues rise year-on-year in the second quarter of 2018, at BofA they fell – dramatically.

The collapse in BofA’s M&A revenues in the second quarter follows an earlier year-on-year fall of 30% in the first quarter. As a result, BofA’s M&A revenues are just $545m for the whole of the first half of 2018. Last year, they were $465m in the second quarter alone.

What went wrong? At the time of its first quarter results, BofA blamed particularly strong comparables in 2017. Today, again, it said last year’s second quarter was a “record,” implying that some sort of drop off will be inevitable.

Even so, there are indications that something’s up. And it seems to be up in America. Figures from Dealogic show that BofA ranked eighth for U.S. M&A revenues in the first half of 2018, down from third in 2017. Its M&A revenues in the U.S. market were just $228m – less than a third of market leader Goldman Sachs. However you look at it, it’s a fall from grace: BofA’s M&A business has traditionally ranked between third and fifth in the U.S. market.

BofA’s sudden demise as a U.S. advisory house may be attributed to reasons highlighted by Bloomberg in June. At the time, the newswire said the U.S. bank was suffering an exodus of top M&A bankers: at least 14 managing directors had left, of whom 10 were in the U.S. The exits were reportedly the result of internal squabbling and an excruciating approach to risk management as BofA’s risk managers scrutinized potential deals from every conceivable angle and approved them slowly – if at all. At the same time, BofA is said to be less willing than before to extend loans to help finance M&A deals after losing $292m on a loan to the Steinhoff Corporation – even as rivals like J.P. Morgan have been helping to finance massive deals like Bayer’s $57bn purchase of Monsanto.

BofA would undoubtedly argue that it’s not all bad. Senior bankers told Bloomberg in June that the focus is now on, “deepening long-term relationships” and that things should bounce back now that the internal Steinhoff investigation is over. Since the start of this year, BofA says it’s hired at least 15 senior bankers. At the time of its first quarter results, the bank said it was busy recruiting, “additional client-facing professionals to further strengthen local market coverage”.

Also at the time of its first quarter results, however, BofA also proclaimed that its investment banking pipeline was strong. With retrospect, this looks like very wishful thinking. Bank of America’s investment banking business has new co-heads in the form of Elif Bilgi Zapparoli and Sarang Gadkari, appointed in May 2018. They need to hope that the first two quarters of this year were just a blip. If not, they may want to reconsider the bank’s advisory strategy in the Americas and to hire in some decent rainmakers to replace all those who’ve left.

“”

Comparatively speaking, investment banking interviews are known to be extremely difficult. You’ll face highly technical questions along with behavioral inquiries and even an occasional brainteaser. Plus, the physical process is rather daunting. They call interview sessions for juniors “Super Day” for a reason; you’re not just sitting down with one hiring manager for an hour-long chat.

But which banks put candidates through the most stress during the interview process? The latest rankings from Wall Street Oasis are below. A quick glance at the list reveals an obvious narrative before you get near the bottom of the page. Interviews at boutique investment banks are killers.

Boutiques account for the top seven hardest interviews, as judged by people who have gone through more than one. Goldman Sachs and J.P. Morgan, two of the most prestigious and highly selective bulge bracket investment banks, don’t even make the top 10, finishing 13th and 23rd, respectively. PJT Partners, launched within the last five years by famed rainmaker Paul Taubman, leads the list, with 99% of candidates considering the interviews to be difficult. Established boutiques Centerview Partners and Moelis and Co. fill out the top three, followed by restructuring specialist Millstein and Co., which reportedly just got acquired last week by fellow boutique Guggenheim Partners. You have to reach the eighth position on the list before you hit a bulge bracket bank – Citigroup.

Recruiters and people who work at boutique investment banks don’t find the rankings to be much of a surprise. Due to their size, boutiques care more about culture and fit than larger firms, according to one New York recruiter who asked to remain anonymous as they work with a few of the aforementioned firms. Analysts work in small teams and have direct contact with MDs, but also clients – something you wouldn’t see at larger investment banks. “They’re never going to hire someone with minimal people skills who’s great with Excel,” the recruiter said. That said, the team is small enough that strong client-facing skills aren’t enough either. Boutiques don’t have to fill near as many seats, so they can afford to be selective. “They want the finished product,” the recruiter said.

This is why the interview process can be so demanding. Current employees at top-ranked boutiques note that the technical questions they were asked had much more depth than what they had seen at full-service investment banks. “They ask more than ‘walk me through the three financial statements’” of a company, one said. They’ll dig into your knowledge of financial theory and application, including actual case studies, he said. “You can’t just memorize answers to common questions – you actually have to know how to work through it and provide quantitative answers.”

Culture fit is the next big hurdle as analysts at boutiques will work mostly on live deals, not just pitches. On the surface, personal questions should be easier to answer than technical ones, but most of the time that isn’t the case, said a current VP at a New York boutique. “Most juniors seem wildly unprepared to have an actual conversation with you,” he said, recalling one interview where a candidate aced every technical question but couldn’t find his tongue when asked about his passions outside of finance. “He didn’t even make our long-list.” These types of people can be assets at large banks, but “you can’t take a kid to a client meeting if he is going to be sweating through his suit jacket,” he said.

The actual interview process at boutiques sounds similar to what you’ll face at larger investment banks, though they tend to start with phone screens more often as their human resources footprint is smaller. Larger investment banks have started incorporating simulated video interviews in some cases. You’ll usually be looking at two first-round phone screens and then, if things go well, a Super Day consisting of as many as six interviews with both senior managers and potential colleagues – a key difference between boutique and bulge bracket banks.

One point of interest that may have contributed to boutiques rising up the charts as the most stressful interviewers: many now offer several services in addition to traditional M&A advisory, including ECM, DCM, restructuring and activist advisory, among others. Yes, they are small – making culture fit particularly important – but the breadth of knowledge required to work at a boutique is on the rise.

Follow @BeecherTuttle

“”

Lloyd Blankfein is leaving Goldman Sachs and will be replaced as CEO by David Solomon, the current Goldman co-head of investment banking who was once head of the high yield division at Bear Stearns. We knew this already, but now it’s official: an announcement is expected later today. It will be a change in more than just name.

Solomon’s strategic plans for Goldman sound remarkably similar to those of Blankfein, with both men following the strategy laid out by Harvey Schwartz – who also wanted to be CEO, but left the firm after failing in his quest and is now presumably on a beach somewhere sharpening his kitchen knives. Nonetheless, Solomon is a very different personality, and those differences can be expected to permeate the Goldman Sachs cultural miasma.

Lloyd Blankfein, for example, is a relaxed and wry type of person, who likes nothing more than to spend rainy Sundays lying on a couch eating chocolate cookies. He’s also endowed with a strong sense of irony, as reflected in the (ill-judged) “doing God’s work comment” in 2009 when he still had some dark hair.

David Solomon, by comparison, is all kinetic energy. When he’s not working and wearing Lulemon Athletica clothing to Lulemon IPO, he has a monthly gig as DJ D-Sol. When he’s not DJ-ing he’s running, biking, spinning, or kite-surfing. Writing in Vanity Fair, William Cohan, the ex-Lazard MD turned writer and journalist, says Solomon is an, “inveterate adrenaline junkie.”

It is here, then, that the difference between the outgoing and incoming Goldman Sachs CEOs is likely to be most conspicuous. While Solomon is a weekend thrill-seeker, Blankfein is all about lying down and mitigating risk. One of Blankfein’s mantras is that, he spends, “98 percent of my time worrying about things with a 2 percent probability.” It was Blankfein – who was a risk manager before he became a trader – who led Goldman through the financial crisis. – “He leaned against the conventional wisdom, both within the firm and more broadly. In 2005-6-7, when the numbers were great and there was a lot of ‘this time is different’ going around, Lloyd would get up and say ‘Plenty of time to have our worst year ever’,” a senior Goldman partner told the Financial Times.

Will Solomon have the same wry perspicacity? It’s too early to say. The indications are that he won’t. He’s widely credited with being a “nice guy.” But he’s not Lloyd. And that’s going to be apparent in the years to come.

Separately, if you’re wondering how senior and ex-Wall Streeters spend their weekends, Bloomberg has a few insights. The newswire recently attended the weekend Hamptons charity gala of Chad Leat, a former Citi vice chairman who spent almost 30 years in corporate credit and acquisition financing. Described as “really rich” and one of the “wealthiest” people about, when he’s not holding charity galas, Leat reportedly spends time cruising in his, “new yacht with a cherry red interior.” Attendees at Leat’s event included Tom Maheras, the former co-head of Citi’s markets division, who had also been on a boat all day and was suffering from sunburn.

Meanwhile:

Deutsche Bank’s share price is rising because four large hedge funds, which have been selling the stock short, had to buy-in to limit their losses. (Handelsblatt)

Barclays is making risky loans to U.S. companies in an effort to gain U.S. market share. This can only end badly. (Bloomberg)

Credit Suisse rehired Mathieu Salas from Citi to head its coverage of financial technology clients. (Reuters)

Most banks are struggling to recruit because they “need people who not only have the new technology backgrounds but can also see how these can disrupt financial services processes and models.” (Bloomberg)

Morgan Stanley has got an AI project to analyze countless advisor phone calls and pull out the best answers. (Barrons)

Barclays and JPMorgan Chase have been experimenting with IBM’s quantum computing technology since December. (American Banker)

The CFA exam will include questions about Blockchain. (Bloomberg)

““

One of London’s top quants is on the move. Vladimir Piterbarg, the former head of quantitative analytics at Barclays, who joined the Rokos family office in 2015, has left again according to insiders. His destination is unclear.

Piterbarg didn’t respond to a request to comment on his plans, but a Rokos employee confirmed his exit. Piterbarg is understood to have left around a month ago, despite still being registered as employed by Rokos on the London Financial Conduct Authority (FCA) Register.

Piterbarg’s exit comes as both banks and hedge funds are hiring quantitative talent. Goldman Sachs, for example, is continuing to build out its “strats” team this year, and funds like Citadel have been focusing on quant hires and building machine learning expertise.

Piterbarg spent around three years and three months at Rokos after spending over 10 years at Barclays. He previously worked for Bank of America, where he was an MD and co-head of quantitative research. Piterbarg has a PhD in mathematics from the University of Southern California.

While Piterbarg is leaving Rokos, others have been arriving – particularly juniors. Owen Powell, a former junior fixed income sales trader at Berenberg, joined as a trading assistant in June. Dusan Milijancevic, a former Goldman Sachs oil trader, joined as a junior portfolio manager in May.

Founded in 2013 by Chris Rokos, the co-founder of hedge fund Brevan Howard, the Rokos Family Office was intended to manage Rokos’ own fortune. In January 2017, Rokos opened the fund to outside money and Rokos Capital Management was born. It’s not clear whether Piterbarg worked for the family office or the hedge fund (or both): he’s registered as working for Rokos Capital Management with the FCA, but says he works for the family office in LinkedIn. Both of these seem set to change soon.

““

If you’re reading this, you might be doing an internship with an investment bank this summer. – Or maybe you’re thinking of doing one next year. That’s nice, but I bet you have no idea what internships are really about. Most people join a bank for the summer thinking it will be all about working hard, running Excel, making decks..

They’re wrong. None of that really matters. Summer internships in investment banks are not about getting work done. They are mostly about three things, and three things only:

1. Getting a full time job offer.
2. Know more about finance then when you went in.
3. Coming out more valuable then when you went in.

Internships in banks usually last 10 or 12 weeks. As part of the recruitment process, their main purpose is to get you a full-time offer. If you don’t get one, it’s not the end of the world (I didn’t get an offer after either of my internships). If you want to get a full-time offer, you’re going to need to take a few things into account. –

A. Does the team have headcount for the next year? In other words, can they hire you if they want to? Not all teams have this luxury.
B. Do you have the skillsets and personality fit for the team you’re interning with?
C. If so, who’s your sponsor and are they senior enough?
D. If not, can you find another team quickly where there’s headcount, where the fit exists and where someone will support you in the process of becoming a full-time employees?

Once you’ve achieved this, you need to work on making sure you come out knowing more about finance than when you go in. You might think this will be a given, but only the top banks have a structured summer internship program. If you’re not interning with the top tier you may be assigned to a team that doesn’t know how to use you. In this case, the VP or associate you’re helping won’t necessarily have time to focus on your education. You therefore need to take matters into your own hands.

A. Try to meet five new people a week from new areas of the bank that you don’t know about.
B. Schedule 30-45 minute meetings with them, where you ask questions and request things you should read and other people you should meet.
C. Follow up with everyone you meet after a few weeks of the internships and also once you leave.

Your final aim is to come out of the internship as a more valuable employee then when you went in. This is going to be a function of what you learnt and who you met. Your entire early career trajectory is about those two things: What are you learning ? Who are you building a relationship with?

In all decisions you make in your internship, optimize for the three key aims. A job in finance isn’t like University. You cant just do what you are told and get all the answers right and think you have aced it. You are playing a different game now.

The author is one of a group of senior bankers who blog at the site What I Learned on Wall Street (WilowWallStreet.com).

““

It’s rare that developers in banking are armed with only one programming language. Now, the demand is for ‘full-stack’ developers who can bring multiple programming language skills. Nonetheless, the gatekeepers in HR want to see one or two specific skills in order to pass a resume through to the hiring manager.

So for the third consecutive year, we combed through our database over the last 12 months to find which programming languages are included in the most job postings on our site as well as the number of candidates who currently possess those skills. The results reveal the most in-demand tech skills in banking along with the current level of competition in the market.

While banks are thirsty for high-level tech talent, the market became even more crowded this year. The same was true when we compared 2017 totals to the previous year. More jobs are available, but the competition for roles that require non-niche programming languages continues to increase. Perhaps this could be due to the fact that banks are now hiring more senior software engineers and technologists from out of the industry than in previous years. J.P. Morgan just acknowledged this week that 40% of their senior tech hires are poached from traditional technology companies, as opposed to rival banks.

Either way, some programming skills are more in-demand than others. These are the hottest languages in the financial sector right now.

C++: 15.5 candidates for every available job

In what is perhaps a bit of a surprise on the surface, C++ expertise appears to provide the best odds of landing a programming job in financial services. Yes, it’s an older language, but that’s part of what makes it a more in-demand skill at the moment. C++ is the backbone for many banks’ legacy systems that are still in use today, but there’s a dearth of specialists as it’s not as common with younger programmers. It’s also enjoyed a renaissance of sorts with the influx of high-speed trading due to the need to process high volumes of data.

As a result, C++ developers find themselves with leverage that they likely didn’t think they’d have several years ago.

Python: 26 candidates for every available job

Used primarily for pricing, risk management and trade management platforms, Python has progressively become one of the go-to programming languages at investment banks and hedge funds, replacing Java in many instances. The number of jobs mentioning Python as a desired skill has nearly tripled over the last year-and-a-half – from 270 to more than 800. However, the number of candidates who have experience working with Python has skyrocketed during that time.

In December of 2016, the last time we did this research, there were only 14 candidates for every job. Now there are 26. At the time, we were told the supply wasn’t meeting up to the demand. The playing field currently appears more level. That said, a growing percentage of people who have experience with Python aren’t necessarily competing for programming jobs.

Python is great for creating analytic tools and quant models, according to Gina Schiller, managing director at New York headhunter Jay Gaines & Company. It’s unique modeling capabilities have caught the eye of analysts, traders and researchers, who find Python a helpful tool in their own realm. In fact, Citigroup just started offering Python coding classes to banking analysts and traders as part of its continuing education program. The idea didn’t come from the bank; employees were the ones who expressed interest.

While it’s impossible for us to quantify the number of jobs and resumes that reference the R language due to the simplicity of its name, R is often used in conjunction with Python and is also very popular, though not quite as ubiquitous. High-frequency/low-latency trading funds use R for statistical computing to run simulations and predictive analysis. A quick perusing of job postings requiring experience with Python usually ask for exposure to R.

Java: 29.8 candidates for every job

Unlike with Python and C++, the number of jobs requiring Java has gone down over the last 18 months – from 460 to 346 – despite banks’ acute focus on hiring tech talent. Once the golden child of investment banks, Java has often been replaced by Python and R, which are known to be faster, more flexible and easier to use for current projects. And because of its popularity just a few years ago, there are plenty of people with Java experience.

C#: 37.6 candidates for every job

C# experience has also seen a small drop in demand due to new requirements in the current trading landscape. “C# is still in use but now pretty much only for quanty, low-latency things,” said Christian Glover Wilson, vice president of technology and strategy at Tigerspike. The one positive is that the market isn’t flooded with C# experts. But that hasn’t made up for the lack of current demand.

Matlab: 106 candidates for every job

Used primarily for quant research, Matlab has virtually been overtaken by R. Only around 150 job postings mention Matlab, and there are thousands and thousands of people with the experience.

Follow @BeecherTuttle

“”

Goldman Sachs’ fixed income currencies and commodities (FICC) business seems to be growing faster than expected. Only last September, the firm outlined plans to add an extra $1bn in FICC revenues in the next three years. Just ten months on, and Goldman’s FICC revenues are up $900m on 2017 in the first half of 2018 alone. How about that.

Goldman’s fixed income performance is certainly impressive – particularly compared to the other U.S. banks to report so far, whose revenues in the business were far less dynamic. While Goldman’s FICC revenues rose 45% year-on-year in Q2 (after increasing 23% in Q1), the comparable revenue increases at J.P. Morgan and BofA were 7% and 2% respectively, while Citi’s fixed income sales and trading revenues actually fell 6% year-on-year in the quarter.

In today’s release, Goldman attributes its fine performance in FICC to what it describes as, “higher net revenues across all major businesses, including significant increases in commodities, interest rate products and credit products.” That’s pretty fancy, particularly given Citi’s comparatively poor performance in the same markets. However, there are also reasons to check your excitement.

1. Goldman’s FICC recovery is just a reversion to the norm

As the chart below shows, it’s not so much that Goldman’s recent second quarter performance was outstanding, as that its second quarter performance in 2017 was abysmal by the bank’s own historical standards. The recent bounce-back is therefore to be expected. In any case, Goldman is still way below its historic trend.

2. As Goldman’s performance recovers across the bank, employees aren’t entirely benefiting

As Goldman’s revenues increase, it’s standard practice for the bank to pay more to its staff.

Not this time.

In the most recent quarter, Goldman has taken advantage of its revenue increase to allocate less money proportionately to compensation and benefits – last year Goldman accrued 41% of its second quarter revenues to compensation and benefits; this year it’s only accrued 39%. This is across the firm as a whole and not specific to FICC, but it’s still worth noting given complaints about last year’s FICC bonuses and the exit of valuable traders like Sam Berberian to Citi.

Even though Goldman staff aren’t fully benefiting from their performance in 2018, the good news is that Goldman has slightly hiked pay per head across the firm: it’s up 5% to an average of $199.5k in the first half.

3. The cost of doing business is still rising

There’s a reason Goldman’s traders are unlikely to receive the full benefits of their improved performance: non-human costs are rising. Non-compensation costs rose 24% year-on-year at Goldman in the second quarter, driven by the likes of investment in technology and something called “market development” (up 30%). By comparison, spending on compensation rose only 7%, despite the addition of nearly 4,000 extra staff across the business (a 7% rise).

Goldman’s higher technology and market development costs are presumably a particular affliction in sales and trading, where the bank is deemed to have fallen behind in electronic trading and has been working frantically to amend things. If you work in Goldman’s fixed income sales and trading division, you may therefore still need to sacrifice some pay for the sake of getting the firm back up to speed.

4. Goldman’s FICC performance was nothing compared to the performance of its ECM bankers

Goldman’s FICC traders may also need to tone down their compensation expectations given the far superior performance of their equity capital markets colleagues. As the chart below shows, it was the ECM business that genuinely had an excellent second quarter at GS. Thanks to its contribution, the firm achieved its third highest investment banking revenues ever for a single quarter. By comparison, Goldman’s FICC bankers did well – but not that well: revenues in the division are still 31% lower than they were five years ago.

In theory, Goldman Sachs should be trying its hardest to keep everyone on its strats team happy. After all, strats are one of its priorities – or were under outgoing CEO Lloyd Blankfein.

It’s curious, therefore, that one of the strats Goldman hired only last year to work on its algorithmic trading platform has left again after little more than a year. – Alex Skrypnik, a London-based quant developer whom Goldman hired from Bank of America’s cross-asset algorithmic trading system in July 2017 has just quit to work as a director in electronic trading at Citi.

Skrypnik declined to comment for this article, but we understand he is not the only recently hired Goldman strat to have left: others recruited last year are understood to have gone to Morgan Stanley and UBS.

Skrypnik’s departure comes as Goldman has been building its quant execution business under Michael Steliaros, whom it hired from Bank of America last November. It’s quite possible that Steliaros’ new recruits are simply displacing previous hires.

Other recent exits from Goldman include Anoop Dalvi, a New York-based vice president in equity derivatives trading. Dalvi left Goldman this month after fourteen years and is understood to be joining a rival bank (although we don’t know which). His is the latest in a series of senior exits from Goldman’s global equity derivatives business, which has also been hiring in New York, London and Paris.

Both equity derivatives and strats are hot hiring areas at most banks right now, and rivals are likely to be only too pleased to rehouse anyone leaving Goldman. One strat complained that the firm doesn’t accord the strats team sufficient status and wrongly presumes it will be easy to replace anyone who leaves. Speaking off the record, however, another Goldman insider said the firm’s push into electronic equities trading is going well and that the firm is having record days most days and has built its highest ever market share.

Goldman reported its second quarter results today. Fixed income trading revenues were up 45% year-on-year. Equities trading revenues were flat.

Photo: Shenk/Getty

““

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Meanwhile:

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Ranking the most in-demand programming languages in banking technology

Reasons not to get TOO excited about the FICC recovery at Goldman Sachs

1. Goldman’s FICC recovery is just a reversion to the norm

2. As Goldman’s performance recovers across the bank, employees aren’t entirely benefiting

3. The cost of doing business is still rising

4. Goldman’s FICC performance was nothing compared to the performance of its ECM bankers

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