Morning Coffee: Goldman partner at 27, finance failure at 49. Goldman women likely to get a raise
Just because your finance career flies in your 20s, don't assume it will maintain the same sort of elevation two decades later on.
Case in point: Eric Mindich, who will turn 50 this year, became the youngest ever partner at Goldman Sachs more than 20 years ago at age 27, earning him a reputation as a “Wall Street wunderkind.” As with all top traders of his generation, Mindich subsequently left Goldman Sachs and launched a hedge fund. New York-based hedge fund Eton Park Capital Management was born in 2004 with $3.5bn in capital. To start with it all went well. Eton Park expanded to manage $14bn in 2011, but those assets have been cut in half over the ensuing six years.
Now the jig is up. Eton Park is shutting down. It will begin returning its remaining $7bn-plus in capital to investors by the end of next month.
Mindich's magic has faded. Eton Park lost 9.4% last year and the fund’s performance has been flat so far this year compared to a 5% gain for the S&P 500 during that time.
“A combination of industry headwinds, a difficult market environment and, importantly, our own disappointing 2016 results have challenged our ability to continue to maintain the scale and scope we believe necessary to pursue our investment program,” Mindich wrote in a letter to investors that was sent after he notified the firm’s 120 employees of the decision to close, according to The New York Times.
Admittedly, Mindich isn't the only one struggling. Huge numbers of hedge funds closed last year, prompting claims that traders are better off working in long-only asset management. Nor is Mindich the first ex-Goldman partner to crash and burn. - Jon Corzine's stint at MF Global was far more damaging.
Separately, Goldman's women could soon have something to celebrate. Pax World Management, an activist shareholder, has reportedly convinced Goldman to “take proactive steps” to address the disparities in men’s and women’s compensation. Goldman agreed to enhance pay equity disclosures in an upcoming report, according to Bloomberg. BNY Mellon has committed to doing the same.
Taking job title and responsibilities into consideration, men who work at financial services firms earn 6.4% more on average than women, compared to a 5.9% percent gender pay gap at technology companies.
Banks are laying off compliance professionals. (Bloomberg)
Citigroup’s global head of G-10 currency strategy Steven Englander has quit to join the hedge fund Rafiki Capital Management. (FINalternatives)
The former Credit Suisse global research head and an ex-AllianceBernstein equity portfolio manager are launching a new long-only emerging markets equities firm. (HFMWeek)
Big banks and Silicon Valley have been waging a war for talent for a while, but now they’re engaged in an escalating battle over your personal financial data. (New York Times)
U.S. fees are up 19% to $8.8bn in the first quarter, and Goldman Sachs is still at the top of the mergers and acquisitions league table, while JPMorgan ranks first for equity and debt capital markets. (Business Insider)
Jay Clayton, who President Trump chose to lead the Securities and Exchange Commission, told Congress that his past work as a Wall Street lawyer “is a strength” and called for scaling back regulations and expressed skepticism about the usefulness of large corporate penalties. (WSJ)
This guy quit his job at Coke to create his own trading website, became a millionaire by collecting fees for executing trades via the E*Trade knockoff, got busted by the FBI, turned informant and then went rogue. (Bloomberg)
Don’t count on equivalence to save your City banking job, warns Citi. (Reuters)
The Financial Conduct Authority is reexamining the £7.3bn fundraising that Barclays undertook in 2008. (FT)
Leveraged ETFs are such complicated financial instruments that even fund managers struggle to quantify the losses they incur from daily rebalancing. (Bloomberg)
Qatar, the world’s richest country per capita, is overhauling its $335bn sovereign wealth fund for the second time in three years. (Bloomberg)
There’s an argument for elite colleges and universities to move to a lottery system for admissions. (MarketWatch)
Mulling what to do with all of your spare time after retiring from your successful financial services career? Enroll in Stanford University’s Distinguished Careers Institute. (Bloomberg)
Even bankers can save the world and figure out the meaning of life, according to this banker. (Bilal Hafeez)
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