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If you want to ensure your future employability in finance, you might want to learn how to code. After all, Goldman Sachs already employs 9,000 ‘engineers’ and spent nearly $900m on technology last year; J.P. Morgan employs 50,000 and plans to spend nearly $11bn on technology this year. The numbers are growing, but technology in banking is already huge and investment banks are some of the biggest hirers of programming talent in the UK.

However, you’ll need to choose your language carefully. Banks hire programmers in some languages a lot more than others and not every bank is equal. Different banks have different preferences. And if you want to work for a tech firm like Google or Amazon, you’ll need to know different languages again.

The (many) charts below depict the number of jobs in each programming language which have been advertised by top employers across the UK over the past 12 months. Based upon data from analytics company Burning Glass, they are for the economy as a whole, not just for finance. Even so, finance firms often come out on top: in combination, banks advertised over 12,000 technology jobs in the UK during the period.

There are some quick conclusions to be drawn from the charts below. The programming language most likely to land you a job with a bank is definitely Java. Banks advertised at least 4,881 Java jobs in the UK last year. Java is followed by Python (2,984 jobs last year). And Python is followed by Javascript, Perl, C# and Scala, all with more than 700 jobs in total. When you get to Swift, R, Ruby and Clojure you’re scraping the barrel (eg. there were just 25 Clojure jobs). And there were no jobs at all advertised by big banks looking for programmers in C, Go, Haskell and Pascal. You might want to avoid these if you want to work in finance.

The charts also make banks’ coding preferences clear: Goldman Sachs likes Javascript while others don’t; Barclays kind of likes R; Citi is ahead when it comes to hiring coders who work in Clojure.

Of course, the charts below are retrospective. Just because Goldman Sachs and J.P. Morgan didn’t seem to need any Haskell coders last year, who’s to say they won’t need them next year? It will surely be a while, though, before Java coding goes out of fashion.

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There’s a certain phase of life in which it makes sense to be a summer intern in an investment bank. You’re normally starting your second decade, in the second year of university, with the sort of youthful enthusiasm and stamina needed to work long hours and the sort of lack of commitments needed to spend most of your summer at a desk.

At Jefferies, though, someone has snuck in who doesn’t fit this profile. In a letter to the bank about the joys of the summer internship, one of Jefferies 2018 analyst and associate interns confesses, “There is something I have been keeping from you. I am not exactly like the rest of my intern class. I am a couple years older…” Not only that, but she says she’s “different” to the rest of them: she’s been living on her own and looking after her younger brother since she was sixteen. She’s been, “working three jobs” and going to school at night. And in between that, she applied for “hundreds of internships.”

Jefferies accepted and now April St. Pierre says her life is on the way to being transformed, “This internship isn’t just about the experience I can put on my resume, but the edge I have gained. I have found my passion and a career path that will continue to encourage massive personal growth, where I can put my hustle to good use,” she says.

St. Pierre’s enthusiasm and gratitude are infectious. Many interns say they love banking and the summer experience, but her delight is about as authentic as it comes. She’s had to struggle even to get into work. – While interns usually live in paid accommodation near the office, or with parents close by, St. Pierre has been commuting to Jefferies’ Boston office every day from Maine – a journey which takes four hours one way according to Google. “I have never loved traffic so much because that line of cars is me inching closer to the place I belong,” says St. Pierre. “Thank you, Jefferies, and to the person who said, let’s take a chance on this one. That risk, that moment, that person changed the course of the rest of my life…”

For its part, Jefferies seems to appreciate St. Pierre’s exuberance and struggle. The bank’s CEO Richard Handler said her note was, written for the bank’s intern letter competition, “was heartfelt, important, inspiring and honest,” and flew her to New York for lunch.

Separately, an eccentric-looking quant has become embroiled in a dispute. Ed Borsage often likes to wear a black beret according to the Wall Street Journal. The founder of a life sciences company named after his preferred hat (‘Black Beret Life Sciences), he’s also a mathematician who owned Houston’s most expensive mansion, has a private island resort in the Caribbean, and has been running QuantLab, a Houston high frequency trading firm. Unfortunately, beret-wearing Borsage has become involved in an argument over QuantLab’s management. Rival managers say he arrived following a, “tyrannical coup”, and that under Borsage’s control the company, “barely broke even.” Borsage says he’s being unfairly maligned and that his colleagues have resorted to, “false, misleading and defamatory statements.” Harsh.

Meanwhile:

Angela Knight, ex-chief executive of the British Bankers’ Association said in 2008 that LIBOR fixing was being coordinated by senior bankers, so why have only juniors been hauled up before the courts? (Private Eye)

The UK’s biggest international banks are set to move fewer than 4,600 jobs from London in preparation for Brexit — just 6% of their total workforce in the financial centre — according to Financial Times research. (Financial Times) .

“The story has always been three to five years out, not what does it do to the City the morning after Brexit,” said Rob Rooney, chief executive of Morgan Stanley International. (Financial Times)

‘Only 6% of their London headcount’ doesn’t sound like much, but 6% of finance jobs in the City translates into 21,000 jobs, which is quite a lot. It’s also about £2bn in lost tax receipts….This doesn’t include any jobs in support services (legal, IT, accounting etc). So the total number of jobs moving from the City will be bigger.’ (Twitter)

“If we are to lose some of [the existing] jobs, they are going to be the jobs that probably in five-to-10 year’s time are not going to be around, or are not going to be in the same shape or form as today — because the sort of joining of technology with finance at this moment in time is creating a very different dynamic.” (Politico)

Elly Hardwick, head of the innovation lab at Deutsche Bank London, has left. (Financial News)

Man Group’s sales staff managed to massively increase assets under management even as its traders lost money. (Bloomberg)

Andrea Orcel after the UBS rape allegation: “I can only say that we are challenging the whole process.” (Bloomberg)

An American friend of mine spent a few years working in London for a big Wall Street bank and reported that he did not much care for the place. “I prefer getting stabbed in the front,” he said, pointing to his chest. (Financial Times)

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Citigroup has strengthened its London equity derivatives team with the addition of a senior structurer from Bank of America in London.

Alexandre Isaaz, the former head of U.S. equity structuring at Bank of America, has just joined Citi in London according to insiders.

Citi didn’t immediately respond to a request to comment on Isaaz’ appointment or his role, but the FINRA register shows Isaaz leaving Bank of America on July 26th and he’s already listed on Citi’s internal telephone directory in London.

Isaaz’s move comes as banks are building out their equity derivatives businesses, with a focus on sales and structuring. Stacy Selig, the head of Goldman Sachs Americas equity structuring group, said this week that there’s more demand for equity structurers globally as investors seek to hedge against a growing range of factors in increasingly challenging markets.

Revenues in Citi’s equities business were up 19% year-on-year in the second quarter and 29% year-on-year in the first half. After years of investment, Mike Corbat, Citi’s CEO, said the bank now ranks sixth for equities trading globally and is close to fulfilling its aim of being in the top five.

Citi isn’t the only bank strengthening its equity derivatives business. Goldman Sachs has been hiring too, as has BNP Paribas, as has Credit Suisse, to name but a few. Credit Suisse CEO Tidjane Thiam said this week that equity derivatives revenues were much stronger in the second quarter. “Equity derivatives were a drag for two years,” said Thiam. ” – It looked like a bloodbath…suddenly they are the heroes.”

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Over the last few years, investment banks have made concerted efforts to recruit a more diverse pool of candidates. While most still covet target schools, almost every investment bank has said publicly that they’re interested in candidates that didn’t necessary major in finance or other traditional disciplines like economics, accounting and business administration. Roughly five years into the public push, it appears the talk is mostly just that – talk. The vast majority of new entrants into front office investment banking roles still have backgrounds in finance or inter-related fields, though some regions are hiring more diverse junior bankers than others.

We combed through our CV database containing nearly 1 million resumes and looked at candidates with 1-3 years of experience who currently work in front investment banking roles (not just at investment banks). We narrowed in on people who have their bachelor’s degree only and who uploaded their resume within the last year. Candidates with post-graduate degrees were excluded. As you can see below, roughly two-thirds (67%) of new undergraduate hires majored in finance, economics, accounting, or business administration and management.

However, firms in Europe and Asia have a more diverse pool of junior investment bankers compared to their U.S. counterparts. Roughly 75% of U.S. investment bankers with 1-3 years of experience majored in the four aforementioned disciplines. That number drops to 67% in Europe and 58% in Asia, where banks did a better job of attracting mathematics majors in particular. Investment banks in EMEA also hired a disproportionately large number of history and literature majors compared to the other two regions. Meanwhile, banks in Asia appear more willing to target candidates with esoteric degrees outside of the top 10 that didn’t make up a statistically significant percentage.

Computer science and engineering – two majors in addition to mathematics that banks are said to be targeting – only combined to represent 4% of the global population of young investment bankers. Firms are likely having more success recruiting STEM (science, technology, engineering and math) majors in areas like sales and trading, but when it comes to investment banking, they’re still mostly hiring from the same pool of candidates.

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There’s a new favourite group of people at Barclays’ investment bank. It’s not so long ago that Barclays CEO Jes Staley was praising Adeel Khan, Barclays’ head of credit trading for his efforts in growing the fixed income trading business. Now Staley is extending his plaudits to people in equities.

“Kudos to the team,” said Staley of Barclays’ equities professionals during this morning’s investor call. “I’m really pleased about our performance in equities,” he added later. Not without good reason.

Barclays’ equities sales and trading business has done exceptionally well this year. CFO Tushar Morzaria says it’s seized market share from rivals. He seems to be right; especially when it comes to seizing market share from Credit Suisse.

Equities sales and trading revenues at Credit Suisse were down 1% in Swiss franc terms in the first half of 2017 compared to the first half of 2018. At Barclays, where revenues are measured in pounds sterling, equities revenues rose 30% over the same period. While Barclays did well, Credit Suisse seemingly did not.

The discrepancy in performance is likely to be doubly disconcerting for Credit Suisse because a not insignificant number of its former equities professionals have moved to Barclays. Most significant among them is Stephen Dainton, whom Barclays hired from CS last August as global head of equities, but there’s also Nas Al-khudairi, Credit Suisse’s former star head of electronic products, or Matt Pecot, a former equities MD at Credit Suisse in Asia (who joined Barclays as head of equities for APAC), or Neil Staff, who’s joining soon as head of exotics and derivatives trading for EMEA, or Jan Asboth, a former Credit Suisse electronic equities salesman who came to Barclays via Macquarie. The list goes on.

Needless to say, Staley didn’t cite the Credit Suisse hiring spree as the reason for Barclays’ success. Instead, he said it was down to a combination of additional capital for the equity financing business, strength in flow equity derivatives, investment in electronic equities trading – and to a new trade routing system which has significantly increased electronic equities volumes.

None of this is intended to rain too heavily on the equities parade going on at Credit Suisse, where CEO Tidjane Thiam declared himself happy with equities results this week and said that equity derivatives revenues were especially febrile in Q2. Credit Suisse has, of course, been doing some equities hiring of its own under ex-UBS head of equities Mike Stewart. And although Credit Suisse’s equities sales and trading revenues fell in the second quarter compared to the previous year, they fell by less than Deutsche Bank’s did.

Of course, there’s always the possibility that Barclays’ brilliant quarter in equities has less to do with all its recent hires and tech investments than with geography. Barclays’ equities business is predominantly comprised of the ex-equities business at Lehman Brothers and is therefore heavily skewed towards the U.S.. As the chart below shows, most U.S. banks’ equities businesses had a good second quarter (Goldman Sachs excepted). The moral of the story may yet be that if you want to work in equities now, make sure you choose a bank that’s strongly exposed to the American market.

If you work on the trading floor of an investment bank, 2018 has included some of the best and some of the worst of times. Or at least this looks like the case if you work for J.P. Morgan. The U.S. bank just released its 10Q filing showing gains and losses in its markets division for the first half of the year. They reveal that 2018 has been a wild ride.

As the chart below shows, January 2018 was an exceptional month for J.P. Morgan’s trading business. The bank made a trading profit on every day but one and there were two days when trading profits exceeded $100m. When volatility spiked in February, however, January’s big profits turned to big losses and the U.S. bank’s traders have never quite recovered their stride. Early June was good. Late June was…patchy.

The second chart below shows the distribution of profit and loss-making trading days at J.P. Morgan during the same period of 2017. While last year began with a little less promise there was none of the February blow out and fewer days of dramatic losses.

A count of the trading loss days for both years below suggests that J.P.M made losses on around 50 days this year, compared to 45 last year. However, it’s the extent of the losses that are notable – in the first half of 2018 there were five days on which trading losses exceeded $50m and one day on which they exceeded $100m.

By comparison, last year’s biggest daily trading loss was $80m, and there were no other days when losses were $50m+.

As we move further into the third quarter, there are all sorts of reasons why volatility could make a comeback for traders at J.P. Morgan and elsewhere. During today’s investor call, Barclays CFO Tushar Morzaria said volatility was lower in July, but higher already as we go into August. With an eye to their bonuses, J.P. Morgan’s traders will be looking for an opportunity to make good their losses from earlier in the year.

Daily trading gains and losses at J.P. Morgan during the first six months of 2018

JPMorgan Var 2018

Daily trading gains and losses at J.P. Morgan during the first six months of 2017

JPMorgan VAr 2017

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Rarely if ever are changes to passively-managed index funds topics of consternation on Wall Street, but that all changed this week when one asset management giant decided to blink first.

Seeing billions of assets under management vanish in recent years, Fidelity is launching two new index funds on Friday that are completely free to invest in. By announcing the no-cost funds – an industry-first – Fidelity not only set off a PR firestorm among “roiled” competitors like BlackRock and Vanguard, it also sent the stock prices of its rivals spinning, leaving employees with equity stakes wondering what hit them.

The move, referred to as “a shocker” by one Bloomberg analyst, is an effort by Fidelity to reclaim market share from the likes of BlackRock, the world’s largest asset manager that has won over clients with its cheap iShare ETFs. The free funds will obviously result in a loss for Fidelity, but the idea is to leverage them to bring in new customers who will then hopefully hire a Fidelity advisor or buy into one of the company’s active products.

“Since we expect Fidelity is a profit making organization, we expect somehow they will look to make money,” Robert Lee, an analyst at Keefe, Bruyette & Woods, said in a note that likely wasn’t meant to be funny. Fidelity’s bold bet should force competitors to follow a similar path, which could result in diminished revenues across the industry over the long-term.

The immediate response to the announcement wasn’t pretty for rivals, either, particularly for BlackRock. Shares traded at as high as $510 before the news broke. As of market close on Thursday, BlackRock’s stock price had dropped to $475. Co-founder Larry Fink personally suffered $40 million in paper losses following the announcement. Several other rivals also saw their shares slide.

The imminent price war will surely affect all large asset managers – and perhaps the bonus pool for their employees – and could put additional pressure on wealth managers and even hedge funds, many of which have already lowered their fees in response to performances that have recently been bested by passively-managed index funds.

Elsewhere, Bloomberg just published a feature on Stephanie Cohen, the 41-year-old Goldman Sachs exec who was recently named to the firm’s highly-coveted management panel. She’s the committee’s youngest-ever member, earning a seat at the big table just four years after being named partner. Cohen, who worked in M&A before taking on the role of chief strategy officer late last year, was named to the committee just days after Goldman announced that current COO David Solomon will take over as chief executive on Oct. 1.

The move may portend a theme at Goldman Sachs under Solomon, who, like Cohen, is a former investment banker. He’s also gone on the record several times about the need for greater gender diversity at the upper echelons of management. It’s safe to assume that similar promotions will become more of the norm under Solomon.

Meanwhile:

Former bond titan Bill Gross is having a tough run. The performance of his fund is trailing every single one of its peers over the last three years. An editorial piece is questioning whether Gross should hang up his spurs, without even mentioning that whole fart spray incident at his ex-wife’s home. (Bloomberg)

Credit Suisse’s algorithmic trading boss has left the bank after a near-20-year run. Chris Marsh, co-head of the firm’s cash execution services in Europe, the Middle East and Africa, has given notice. His future plans are unclear. (Financial News)

Barclays’ second quarter numbers would look a lot better than they appear if you take away their misconduct charges. The U.K. bank may be better-positioned than many analysts thought. (Reuters)

Wells Fargo has agreed to pay $2.09 billion to settle a federal probe dating back to the mortgage crisis. The penalty is less than what other banks paid for their role in the scandal but in line with what analysts had predicted. (Bloomberg)

BlackRock has hired Elga Bartsch, Morgan Stanley’s former chief European economist and global co-head of economics. Bartsch will spearhead macroeconomic research within BlackRock’s “investment institute.” (Reuters)

J.P. Morgan has acknowledged that it is one of the banks under investigation over claims that it may have mishandled securities that represent shares of foreign companies, known as American Depository Receipts, or ADRs. (Bloomberg)

Apple has become the first company to be valued at over $1 trillion, if you haven’t heard. It’s valuation is now equal to the GDP of the entire state of Florida, and greater than that of Turkey or the Netherlands. (Twitter)

People who abstain from alcohol in their middle years are at greater risk of developing dementia later in life, according to a new study. However, people who drink in excess during middle age are also at an increased risk, so measure carefully. (The Guardian)

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I am an American who lives in Europe. I’ve done my time at Goldman Sachs in NYC and now I’m here, 3,500 miles across the Atlantic getting up close and personal to the land of my forebears. I’m also working – sadly I’m not one of those ex-GS people who doesn’t have to. And at this time of the year, I’m one of the only people in the office.

When you work in NYC, summer is not a big deal. Sure, people go on holiday. Sure, people go to the Hamptons and Montauk, but summer is not a sacrosanct time when you step totally away from your desk. In Europe (and I’m not in London, but in one of the lesser finance cities on the continental mainland), it’s different. Summer here is summer. And summer is not for work.

This means that around about now – if not a few weeks before – almost everyone stops. It’s wild: people here take a full three or four week vacation in a block. In a team of six people it’s not uncommon to find only one left on the desk in late July and August. This is me.

This is totally different to the way things are in the U.S.. When I worked for Goldman, I had the option of taking plenty of vacation time. I’d been there long enough that I got four weeks, plus three “floating days,” but I never used them all. At most I’d use four weeks in total, but never in blocks of more than two weeks at each time. Taking a three week block trip in the U.S. would be a huge deal. Taking four weeks would be impossible.

It wasn’t just me. It’s a cultural thing: in the U.S. it’s not accepted to use all your vacation days. This creates headaches for the banks – most people have a lot of rollover days which they didn’t take from the year before. At Goldman I had 15. The firm tried to clampdown on this and limit the rollover to 10 days because people would cash out their vacation days when they quit.

In Europe, the approach to vacations is totally different. The approach is, ““I have six weeks, I’m going to use every day, and I’m going to take four weeks in the summer continuously.”

This is kind of refreshing. When you take three of four weeks off you actually get to relax instead of taking seven days and spending two of them on planes.

Why am I not on the beach now then? I still have NY habits: I’ve wasted two blocks of two weeks already (one to see my folks, one to see friends in London). I’m kind of regretting that. Next year, I’ll block out the whole summer too. You’ll find me on the Amalfi Coast for four weeks running. Weekends in the Hamptons are peanuts by comparison.

Calvin Colby is the pseudonym of a former derivative salesman now based in Europe

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Who knew? Credit Suisse’s Zurich office has long been a hotbed for emigres from banking to the cryptocurrency sector. So say insiders there, who point to multiple moves from the Swiss bank to the crypto sector over the past year.

The latest CS crypto mover is Andrew Peel. As we were first to report earlier this week, Peel has left Credit Suisse to become head of digital asset markets at Morgan Stanley, based out of Zurich. He’s not the only one. It transpires that at least eleven other people at Credit Suisse’s Zurich office have also succumbed to the lure of the crypto world in the past year. Peel was merely the latest to go with that flow.

The other exits include Simon Tobler, a former FX options trader at Credit Suisse in Zurich who left the bank after 11 years last August to become head of trading for Crypto Finance AG, a Swiss company that aims to implement blockchain technology. Tobler was later joined by Adrian Gut, Credit Suisse’s former head of FX agency prime broking, and then by Pirro Morandi, who was formerly in fixed income and high yield sales at CS. Morandi joined in April 2018. Gut joined last October.

Another August 2017 departure was that of Marcus Abele, Credit Suisse’s former head of digital private banking. Abele left CS and set up a blockchain consultancy and investment firm. Christian Schuepbach, a VP in derivatives trading and platform digitalization, left the Swiss bank in July 2017 and set up vision&, which describes itself as, ‘a Swiss based, SRO-regulated asset manager facilitating the access to innovative blockchain investment opportunities.’ He was later joined by co-founder and ex-Credit Suisse derivatives salesman Jan Roth, who left the bank in May 2018 and arrived at Vision& in June. The two have since launched the first actively managed blockchain investment product in Switzerland.

The other crypto exits include Cameron Fletcher, a software developer who left Credit Suisse in January 2018 to work for Lykke, a crypto exchange in Zug. Fletcher was joined by two other ex-CS developers: Rachal Huber and Marta Ciesielska. Then there’s Georg Schneider, a Credit Suisse, who VP left around the same time and is now a quant analyst at blockchain company Digital Asset, and Thomas Weber, a former credit Suisse quant, who is understood to have left CS to join Schneider Digital Asset last week….

What makes Credit Suisse such a hotbed for crypto talent? Insiders say it’s down to the fact that everyone knows each other in the Zurich market. “We all worked together on the trading floor,” says one of those who left. “The community in Switzerland (and globally) was very compact a couple years ago. Our small blockchain cell of people entered the space rather early and shared knowledge.”

He says it helps too that crypto is seen as offering opportunities to people who want to work entrepreneurially and that the community of CS crypto alumni are still in touch: “We found different ways to enter the crypto business but still keep close and exchange thoughts.”

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Changes are underway within Bank of America Merrill Lynch’s central risk book (CRB). The group recently hired away a veteran trader from J.P. Morgan’s CRB, and rumors are swirling that’s not the only move.

Former J.P. Morgan executive director Nuri Sercan Ozbay joined BAML earlier this summer, according to a source. Finra’s records show that Ozbay is now registered with Merrill Lynch and he is no longer in J.P. Morgan’s directory. Ozbay spent the last five years working within J.P. Morgan’s CRB in New York, according to LinkedIn. He was formerly a VP at Citi where he also traded within its central risk book. Ozbay has a master’s degree and PhD in operations research from Columbia University.

Central risk books, which use highly complex quant models to identify a bank’s net exposure and make systematic trades to hedge against risk, are known to employ some of the sharper minds in banking. CRBs are also a bit of a hot-button topic as some have argued that they are distant cousins of prop trading and dark pools, which have been outlawed. However, the idea behind CRBs is to trade to mitigate risk, not necessarily make money. Banks and hedge funds have relied more on their CRBs in recent years, making traders with the experience highly-valued.

We’ve also heard rumors that there may have been a change in management at BAML’s central risk book but have so far been unable to confirm the moves. Bank of America didn’t respond to requests for comment on the hiring of Ozbay or rumors of a possible management shakeup. Ozbay didn’t respond to a request for comment.

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Boutique investment banking firm Greenhill has had some well documented issues. There was the rush for the exits by senior staff and the fact that the firm’s market value shrunk below $500m this time last year. In an effort to put the bad times behind it, Greenhill has been working hard (and hiring lots of new people). Yesterday’s second quarter results suggest it may have turned a corner.

In the second quarter of 2018, the revenues Greenhill earned from advising on M&A deals rose 30% on the same period of 2017.

It’s safe to assume that some of this revenue growth was down to hiring. James Mitchell, an analyst at Buckingham Research, points out that Greenhill has added 10 managing directors so far this year, including senior people from Rothschild, J.P. Morgan and Deutsche Bank. Thanks to seven senior staff exits, however, Mitchell says the net number of new MDs is up by only three people on 2017.

Even so, that top-level hiring has driven up pay. In the first half of the year, Greenhill’s total compensation spending rose by $15m, or 18%. The firm doesn’t release mid-year headcount figures, but based on employee numbers from December 2017, it likely has around 80 managing directors and 350 staff in total.

With a six month compensation spend of $97.6m, this implies that Greenhill has accrued $279k per head in compensation so far. With luck, it might pay the average employee close to $560k for the full year.

That’s nice. But there’s a potential fly in Greenhill’s ointment. – The firm is also super-keen to hold compensation down as a percentage of revenues. In the first six months of last year, compensation ate up 67% of revenues at Greenhill. This was a lot less than the current norms at Evercore and PJT Partners, but it wasn’t something Greenhill was happy with. – In its 2017 annual report, Greenhill explicitly declared its intention of getting compensation down to between 53% and 55% of revenues. It achieved that in the first six months of 2018, when compensation was 55% of the revenue total.

If you’re a junior at Greenhill this may not bode well. After all its exits, Greenhill needs to demonstrate it can keep its new managing directors to prove to investors that it doesn’t have an MD retention problem. This will mean paying them handsomely at year end. If compensation is to be held down as a percentage of revenues, guess who will suffer if revenues don’t come through?

With revenues rising 30% in the second quarter, this isn’t exactly an issue right now. But Greenhill’s juniors need to hope those new senior staff can keep the deals coming for the rest of the year. They might also hope that Greenhill adds some new people at the bottom as well as at the top. – At the end of 2017, Greenhill had an average of 4.5 juniors to every managing director, down from its long term average of 5. The lower the number of juniors to MDs, the more work each junior has to do. And with Greenhill’s MDs and revenues both rising for the moment, juniors are in danger of finding themselves far, far busier than before.

Photo: Getty

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If you want to get paid in an investment bank for 2018 there is apparently one place to work: equities. The equities traders who put up eye-popping revenue totals during the first two quarters are in line for huge bonuses come year-end.

Incentivized compensation for equities traders should increase by as much as 20% compared to 2017, according to Wall Street pay consultancy Johnson Associates. This is hardly a surprise. As the chart below shows, it’s been a good year for equities. To the extent that percentage revenue increases are a measure of percentage bonus increases, we’d suggest that equities bonuses should rise the most at Barclays, Citi and BofA.

If equities salespeople and traders are going to get a big lift, the picture is more muddled in fixed income, where there has been more variability in performance across banks. Still, Johnson expects fixed income traders to see their bonuses rise between 5% and 10% for 2018.

Those working at private equity firms are the other winners – they too will see a 5%-10% bump in incentivized comp. And that’s not including potential carried interest from previous years. “The industry has been on a fundraising and realization high,” Alan Johnson, managing director of Johnson Associates, said of private equity.

Bonuses for hedge fund managers should remain relatively flat, according to Johnson, though variability is always a major factor when looking at hedge fund performances. The only sector that could see a drop in incentivized comp from 2017 is advisory, according to the report. While U.S. firms like Goldman Sachs, J.P. Morgan and Morgan Stanley had exemplary first-halves in M&A, poorer performances in Europe and Asia will drag advisory bonuses down modestly for the year. Johnson predicts as much as a 10% dip in incentivized comp.

Asset managers are doing just fine, though they can thank market appreciation for a predicted 5%-10% uptick in bonuses. Inflows are still up, but are “wavering,” while fees continue to drop. With Fidelity launching two zero-expense funds earlier this morning, you can expect that trend to continue.

Neil Chriss, founder of recently-defunct hedge fund Hutchin Hill Capital, isn’t going to be sitting on the sidelines for too long. The famed mathematician is joining Millennium Capital Management.

Chriss, who shuttered Hutchin Hill at the end of last year after three years of poor performance, posted a message on LinkedIn late Friday afternoon indicating that he will be partnering with Millennium to build a new quant trading business. Chriss said he is set to join the hedge fund in September.

A former quant within Goldman Sachs’ asset management division, Chriss first made a name for himself at age 11 when he programmed, developed and sold off his own video game. He left Goldman in 2000 to found derivatives trading firm ICor Brokerage, which was eventually sold to Reuters after a brief joint-venture.

Chriss then joined Steven Cohen’s SAC Capital, now Point72 Asset Management, where he worked from 2003 to 2007 before founding Hutchin Hill with $300 million in backing from Renaissance Technologies. Hutchin Hill posted several years of strong performances before the last three. Chriss noted in his parting letter to clients in November that the fund returned a net cumulative 83% since its launch date in 2008.

Chriss is a founding member of the charity organization Math for America and is on the board at the Institute for Advanced Study. He has written several influential books and papers on economics and the market. Chriss said in his post on LinkedIn that he will be building out a team, so expect more hires to follow. Several Hutchin Hill vets have already found work, however. ExodusPoint Capital Management, the largest hedge fund startup ever, has hired away several former Hutchin Hill quants and technologists.

Follow @BeecherTuttle

““

There’s a reason people retire to Florida. – It’s warm all year round, the beaches are beautiful and the taxes there are low. If you can get past the hurricanes, it can be a sort of paradise.

Deutsche Bank’s Jacksonville office has its own share of these upsides and downsides. Jacksonville beach is miles of white sand, but the city was badly hit by the recent hurricane Irma and the DB office in the city was closed as a result. Even so, hurricanes may be the least of Deutsche Jacksonville staff’s worries.

Last year we reported that Deutsche’s Florida office was known for having “unusually nice people.” One year on, it seems those nice people have a few gripes. Bloomberg reports that it’s fine to work in Jacksonville if you’re in the middle or back office, but that front office people there are unhappy. Bloomberg spoke to several who complained of low revenue clients (who were pinched by colleagues in New York if they were turned into high revenue ones), of lower pay than promised, of fewer career opportunities than expected, of restricted travel budgets and therefore little face-time with New York managers who controlled bonuses, and of the need for New York colleagues to place trades for them – which often happened only after a delay.

To some extent these concerns are simply those of the near-shored employee at any bank: staff at J.P. Morgan in Bournemouth or Morgan Stanley in Glasgow typically have similar thoughts about visibility and career progression. But while J.P.M’s Bournemouth office and Morgan Stanley’s Glasgow office are focused on technology, Jacksonville has higher-maintenance front office types. Deutsche has a similar set-up in Birmingham in the UK and there have been quiet rumblings of complaint there too.

What to do about it? If you’re Deutsche Bank, the answer seems to be not much. The German bank has been near-shoring sales trading jobs for years and a few complaints aren’t going to stop it, particularly now that new boss Christian Sewing is doubly determined to cut costs. Despite the Jacksonville departures, Bloomberg reports that Sewing plans to double Deutsche’s headcount there to 200 people within an unspecified time frame.

If you’re an unhappy front office Deutsche Banker in Jacksonville, you can clearly vote with your feet – although Bloomberg says there are few other similar job opportunities nearby. Or you can suck it up and go along with it. There are advantages to being in Deutsche’s Florida outpost – when the bank sponsored a tent at the Players Championship, a golf tournament hosted near Jacksonville last summer, it was intended as a treat for clients. However, Bloomberg says DB has so few clients nearby that its Jacksonville employees were the main beneficiaries of its hospitality instead.

Separately, now’s the time to be a machine learning quant working for a hedge fund. The Financial Times has been speaking to people like Richard Wu, a quantitative research analyst intern at hedge fund Citadel, who speak of a laid back vibe which appears to be overlaid by generous pay. “My team is flexible on when I come in and what I wear to work, as long as it’s not a T-shirt and shorts,” says Wu. “As long as you get your work done, the hours are probably the same as tech.” Elsewhere in the same article, the FT says big data and analytics quants are being paid $150k ($116k) straight out of university.

Meanwhile:

Jim Esposito will be the new global co-head of Goldman Sachs’ securities trading arm. (WSJ)

Jes Staley and Bill winters are now CEOs of their own banks. Yet their pay has fallen two thirds since they were just lieutenants at J.P. Morgan. (Financial Times)

Paul Reynolds, Deutsche Bank’s head of equity research for Emea, has left the bank to join a competitor. (Financial Times)

Berenberg’s big play: We want to be one of the top 10 investment banks in Europe, and eventually globally, in equities. We are still ramping up. I don’t think that is happening anywhere else.” (Euromoney)

In seven years, the SEC has awarded more than $266 million to 55 tipsters, but extracting the money takes patience. People who got awards waited on average about 210 days for a decision, while a rejected application got word within 730 days. (WSJ)

Middle aged men for rent in Japan. (CNN)

Ex-hedge fund VP claims to have started Manhanttan escort service catering for bankers and celebrities. (Vox)

Life as a non-violent psychopath I treat strangers pretty well—really well, and people tend to like me when they meet me—but I treat my family the same way, like they’re just somebody at a bar. (The Atlantic)
Have a confidential story, tip, or comment you’d like to share? Contact: var ssdl = ssdl || {} ssdl.editorialMetaData = { ‘location’ : ‘Global’, ‘company’ : ‘Deutsche Bank’, ‘skills’ : ‘N/A’, ‘sector’ : ‘Investment Banking’, ‘functional_area’ : ‘Sales, Trading’, ‘audience’ : ‘News’, ‘content_type’ : ‘Morning Coffee’, ‘company_sentiment’ : ‘Negative’, ‘author’ : ‘Sarah Butcher’, ‘published_date’ : ‘2018-8-6’, ‘tag’ : ‘N/A’, ‘longevity’ : ‘Evergreen’, ‘content_origin’ : ‘Original Content’ } “

Jim Esposito is all set to become the new global co-head of trading at Goldman Sachs. This should only come as a surprise to those who weren’t watching: Goldman insiders have been predicting Esposito’s ascension to the securities top spot for over two years.

In a sense, Esposito had a head start: his father was CFO of Chase Manhattan in the 1980s and his is a banking family. Brother Michael is chairman of Goldman’s financial institutions group (FIG) business. Brother John is global co-head of FIG at Morgan Stanley. If Jim’s banking career got stuck at VP level, it wouldn’t have been seemly.

There’s more to Espo than family though. He’s extremely good at getting on with the people who matter. And he has a knack for preempting the next big thing. Esposito is, “slippery,” says one senior Goldman insider who knows him. He’s an, “excellent politician.”

Espo is very friendly with David Solomon, Goldman’s soon to be CEO. Business Insider reports that he’s part of a small group of colleagues considered to be in Solomon’s inner circle. ‘Of all the top sales and trading leaders, Esposito may be the one with whom Solomon is most comfortable,’ BI suggested in July. This clearly helped Espo get ahead, but then so too did his closeness with departing CEO Lloyd Blankfein. – When he was promoted to head of strategy in the securities division in 2016 to help solve the firm’s weakness in fixed income, Esposito was widely seen as Blankfein’s man as well.

If Esposito is an operator, this isn’t his only strength. He’s also prescient when it comes to positioning himself for the future. In 2011, he moved from New York to London ahead of expected growth in European capital markets which he forecast would enable Goldman to pick up more European clients. Although European revenues still only accounted for 27% of the total at Goldman in the three months to June 2018, the London move helped position Esposito as a person to be relied upon in Europe.

He can be ruthless: as of head of strategy, Esposito was believed to have orchestrated the rush of senior exits from Goldman Sachs’ fixed income sales business in 2016 as he sought to shift the culture in fixed income sales towards more of an equities-like agency-based approach with a focus on the relationship rather than the individual trade. In a measure of Esposito’s influence, much of Harvey Schwartz’ strategy presentation in September last year seems to have come from his client-focused playbook.

With Esposito all but confirmed as the securities division co-head alongside Ashok Varadhan, the Wall Street Journal says it’s not clear what will happen to the four other lieutenants in waiting (Justin Gmelich, Paul Russo, Michael Daffey and Julian Salisbury) who were also hoping for that role. If they stay with the firm, they may want to take a leaf from Eposito’s playbook and build bridges with those who matter. In the meantime, Esposito will have plenty of opportunity to strengthen his own position by influencing partner promotions at the end of this year. If all goes well, in ten years time he could yet be the man to replace David Solomon. You might say he was born for it.

““

Goldman Sachs’ equity derivatives trading business has undergone a bit of a facelift over the last few months, with the division losing several high-profile names while also making a number of new hires. The most recent addition is Guillaume Gnech, a former director within Deutsche Bank’s equity derivatives trading unit in London. He joined Goldman in July as a single stock exotic trader.

The hire underscores frenetic changes that are occurring in equity derivatives at both firms. Deutsche Bank has been taking a knife to its equity trading business under new CEO Christian Sewing, though most of the equities cuts have come in the U.S. Gnech left Deutsche Bank in April, before Sewing announced a strategic overhaul that included roughly 7,000 global job cuts.

Meanwhile, Goldman Sachs has seen a lot of recent turnover within its equity derivatives business, particularly in Europe. Nick Laux, the London-based head of single stocks derivatives trading at Goldman who made MD in 2017, reportedly exited the bank earlier this year. Laux presumably would have been Gnech’s new boss.

Several other high-profile equity derivatives traders in London have left the bank this summer, including executive directors Francesco Taglietti and James Spooner in May. At least three other departures took place in June in EMEA, including a fellow exotic stock trader, with insiders saying there was some disgruntlement over politics and pay. Part of the reason for the complaints was apparently due to the fact that Goldman has been hiring within equity derivatives, and that new recruits were given better pay packages than the old guard, sources said at the time.

Gnech, who earned his master’s degree in mathematics from NYU, spent the first five years of his career as a trader at Barclays in New York before a one-year stint as a portfolio manager at Capstone Investment Advisors, according to LinkedIn. He relocated to London to take the job at Deutsche Bank.

Follow @BeecherTuttle

“”

If you are an emerging markets trader looking for a job, you may find one at Credit Suisse: the Swiss bank is strengthening its credit trading team and has recruited someone with recent emerging markets experience.

The Swiss bank hired Michael Konstantinou as a director of investment grade (IG) credit trading. Prior to joining CS, Konstantinou worked on the emerging markets desk at Barclays. He began his career as an investment grade credit trader at the British bank in 2007 and only switched into emerging markets last year. – This undoubtedly made it easier to escape back into investment grade.

Konstantinou’s move comes as both Deutsche and Nomura have been cutting emerging markets staff, leaving plenty of emerging markets traders out of work. Credit Suisse has historically been strong in emerging markets trading, but its fixed income business as a whole has under-performed this year. – Fixed income trading revenues fell 1% year-on-year in the first half of 2018 compared to a 9% increase at rival UBS, a 10% increase at Morgan Stanley, and a 32% increase at Goldman Sachs.

Credit Suisse has been making cuts to its fixed income trading business this year as the bank seeks to cut CHF550m of costs from across the bank in 2018. Konstantinou’s arrival suggests it’s also hiring.

“”
Photo: Getty

It may not exactly have prompted the outflow of people from Millennium Capital Management that some expected, but hedge fund ExodusPoint is nonetheless spurring movement in London and New York as the $8bn hedge fund start-up gets going. There are even indications of an appetite to bring-in juniors.

By our reckoning the multi-strategy fund set up by Michael Gelband, a former star fixed income trader at Millennium Management, has added at least another five experienced people in London and New York in the past two months. It also brought on an analyst and an intern.

ExodusPoint’s newest London hires are: James ter Haar, a senior credit portfolio manager who spent the previous year and a half at hedge fund Caxton Associates (and was at Millennium before that); Thierry Hue, an expert in exchange connectivity who’s worked for Deutsche Bank and Morgan Stanley (he was also Morgan Stanley’s former head of algo trading); and Daulat Khatik, a specialist in data analysis from WorldQuant, the quantitative analysis fund founded by Igor Tulchinsky (himself another former MD at Millennium).

Hue joined in July; ter Haar and Khatik turned up in August.

ExodusPoint opened its London office in April 2018. The fund is more established in New York City, where it’s had an office on East 55th Street since around the start of this year. Even so, it’s still hiring in midtown as well. Since July, Gelband’s fund brought on Anthony Piscionere, a junior rates relative value trader who previously worked for prop trading firm DRW investments, and Felipe Freitas, a senior emerging markets portfolio manager who came from CSHG Gauss, an investment management company with links to Credit Suisse.

As hedge funds everywhere move towards training their own staff, there are signs that ExodusPoint may also be moving in this direction. The fund added Jason Brod as an analyst in New York. Brod previously spent two and a half years at Credit Agricole and six months at Markit and may have joined in the middle office. ExodusPoint gave a four week internship to Thomas Ho Kwan Fung, who’s currently studying a Masters in applied mathematics at Columbia University. During the internship Fung said he was mentored by George Attokkaran, a former BofA risk manager who joined ExodusPoint in April.

Other aspiring juniors might want to approach Attokkaran directly: for the moment, ExodusPoint doesn’t even seem to have its own website, let alone an organised graduate recruitment program.

““

Three years ago, Denzel Matsaudza was an intern at J.P. Morgan in London. As part of the middle office team in investor operations services, he worked on client fund accounting. When the internship ended, Matsaudza was offered a full time job. His parents were overjoyed: they thought he’d be at J.P.M. forever and ever.

“My parents are African,” says Matsaudza. “They think that you have a job and you stay there for 20, 30 or 40 years. It was their encouragement that got me into J.P Morgan in the first place- my mum would call it J.P. Morgan Stanley – but when I got there, I realized it wasn’t for me.”

After 15 months as a full-time employee in J.P. Morgan’s back office, Matsaudza decided that jobs in banking don’t always match the hype. “It wasn’t what I’d expected,” he says. “It was like J.P. Morgan hired the best talent from across the country, but when you got there they didn’t have the jobs to match.”

Matsaudza is coy as to what he did exactly at J.P. Morgan, saying only that it’s confidential and that he was working on the bank’s implementation of Blackrock’s Aladdin risk management system. He claims there was a discontinuity between the internship and the graduate programme (“Things that were supposed to have been delivered weren’t delivered – the programme changed in structure”) and that the work he was doing in any case seemed fundamentally lacking in meaning.

“It didn’t feel to me that what I was doing would have a real life impact,” says Matsaudza. “- There was no sense that I would make a difference to anyone’s life – it just felt like I was collecting a cheque at the end of each month. My director said I was doing a great job, but that didn’t seem like enough.

Matsaudza quit J.P. Morgan in October 2017, but only after hitting on a way of making money helping young people like himself when he first joined. While still at J.P. Morgan he set up the website likemindedliving, which matches young professionals with similarly-thinking people in affordable rooms in Central London. His target market includes junior finance professionals who have just moved to London. He currently rents rooms to 60 people and has plans to rent out more. “We help people find like-minded individuals,” says Matsaudza. “By taking this personal approach, we’ve managed to smash yields.”

He doesn’t dismiss banking jobs altogether. “There were definitely some graduates with amazing roles at J.P. Morgan,” says Matsaudza, adding that one of his friends is working on the bank’s Brexit preparations. “But mine wasn’t one of them. Now that I’ve left banking, I’m doing something much more rewarding – you don’t have to follow the norms of banking to make it,” he adds.

Even his parents have come to terms with his new venture.

““

Brutally-long working hours may not be the chief reason many junior bankers burnout, even if that’s their own belief. Rather, it’s the intensity of the work that takes more of a physical and mental toll, according to a new study.

Researchers from Cass Business School and ESCP Europe found that work intensity – tight deadlines and a relentless pace – are a bigger predictor of negative health and career-related outcomes than long working hours. The study suggests that banks’ recent efforts to cap working hours and limit weekends spent in the office may be counterproductive, as the measures make for more prolonged work intensity – a marathon that is run at full speed. The benefits of a slightly shorter week are undone by constant pressure to produce at a fast pace, according to the study.

After three years of overwork, a human body begins to “take revenge” on itself, beginning with physical signs of anxiety – fingernail biting and insomnia – and then graduating to bigger health concerns. What’s more, the researchers found that work intensity – not hours – led to worse career prospects, including missing out on promotions. The problem is that time spent at work is easy to quantify and value, blinding some managers of which employees are really facing levels of stress that are unhealthy and counterproductive.

This can be particularly true in banking culture, where long hours are often looked at as badge of honor. Some juniors and interns have acknowledged wasting time at their desk with no real work to do while waiting for their boss to leave for the night. Others may work the same number of hours but are putting their body through hell, likely with no one the wiser.

All that said, one expert believes the perceived importance of a proper work-life balance – for the success of the individual and the company – is nothing more than a false narrative created by those who can’t keep up. “These individuals aren’t willing to or are unable to perform at those levels, so want to pull down others who can and will,” Marc Effron, author of “Work Smarter, Not Harder,” told the FT.

Elsewhere, we now know why Citi’s global head of cash trading suddenly exited the bank in March. Armando Diaz and his boss, Citi’s global co-head of equities, Dan Keegan, didn’t agree on the strategy behind the bank’s central risk book (CRB) – an emerging cog in today’s sell-side trading operations that allow banks to increase liquidity while also hedging against risk, according to Business Insider. The axing of Diaz, who helped turn around Citi’s struggling cash trading business, shows the growing importance of central risk books now that dark pools have been squeezed by MiFID II. CRBs quietly hold plenty of influence at big banks.

Meanwhile:

HSBC may be suffering from a bit of bad timing. The bank’s adjusted costs for the first half are up 8% as it continues its expansion into Asia. An escalating trade war between the U.S. and countries like China isn’t helping. (Bloomberg)

Barclays is the latest bank to dip its toe into cryptocurrencies. The U.K. bank has created a “digital assets project” led by its global head of energy trading, Chris Tyrer, to explore possible crypto trading strategies. (Financial News)

What exactly is Gary Cohn up to? The former Goldman Sachs president and ex-economic advisor to the Trump administration is still looking for new opportunities but has spent around two-thirds of his time working on his golf game. The most interesting thing Cohn said during the interview is that he sees no merit behind Treasury Secretary Steven Mnuchin’s idea to cut taxes on capital gains. “It was an idea he came up with that got killed in 30 seconds or less, and it won’t last 30 seconds again,” Cohn said. (Bloomberg)

Of the big five U.S. tech companies – Apple, Amazon, Facebook, Google and Microsoft – Amazon’s interview process appears to be the easiest. Roughly 30% of candidates said the process was “easy” or “very easy.” Just 5% of Microsoft candidates said the same. (Business Insider)

U.K. chancellor Philip Hammond is privately urging financial services heads to develop “alternative pathways for growth” in anticipation of a possible loss of access to European markets post-Brexit. He believes the EU may bury London with red tape to the point that U.K. banks will need to look to emerging markets for revenue. (FT)

Bank of America is planning to move some of its London-based research analysts to Paris as part of its post-Brexit plans that could result in at least 200 new seats in the French capital. (FT)

A group of Wells Fargo employees from California won the $543 million Mega Millions jackpot last month. Meanwhile, the bank just admitted that a “calculation error” may have led to the foreclosure of 400 homes whose owners were wrongly denied a mortgage modification. (NY Post)

Brevan Howard plans to launch a new $750 million macro fund on Sept. 1. (Reuters)

Follow @BeecherTuttle

““

Which programming language should you learn? Depends upon the bank you want to work for

Morning Coffee: Banking intern confesses to being older than the rest. Quant dispute

Meanwhile:

Citigroup hired a senior equity structurer from the U.S. to work in London

Top majors for getting an investment banking job

Did Barclays pinch all Credit Suisse’s best equities people?

J.P. Morgan’s traders made a lot of big losses this year

Daily trading gains and losses at J.P. Morgan during the first six months of 2018

Daily trading gains and losses at J.P. Morgan during the first six months of 2017

Morning Coffee: The ‘shocking’ move that has money managers fuming. Meet the most powerful woman at Goldman Sachs

I’m a New York finance professional in Europe. Vacations here are wild

Lots of people have left Credit Suisse’s Zurich office to work in crypto

BAML’s central risk book gets a facelift

Pay is rising at Greenhill, but there could yet be bad news for juniors

Guess who’s going to get a big bonus increase in 2018

Hutchin Hill founder Neil Chriss to build quant team at Millennium

Morning Coffee: The worst place in the world to work in the front office at Deutsche Bank? Happiness is being a machine learning quant

Meanwhile:

The special skills of Jim Esposito at Goldman Sachs

Former Deutsche Bank equities trader pops up at Goldman Sachs

Emerging markets trader reinvents self at Credit Suisse

Hedge fund ExodusPoint is still hiring hard, and has started adding juniors

Disillusioned ex-J.P. Morgan analyst is helping young bankers find homes

Morning Coffee: Why you waste your 20s working 70+ hour weeks in banking – or not. A feud breaks out at Citi

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