Morning Coffee: 22-year old bankers on $120k salaries disappointed at lack of camaraderie. How to cut hedge fund pay
Recent graduates who've taken jobs at leading investment banks are leaving again after discovering that people at work aren't as friendly as they thought and that they have no time to develop other friendships outside of work.
Business Insider spoke to 'two investment-banking analysts in their early 20s, a former derivatives-trading managing director, and two mental-health professionals with financial-industry clients.' They all said that loneliness is an issue for young people in financial services, although it possibly gets better if you stick with it.
"I thought all of us analysts would be super close. I thought we would have this really strong camaraderie and we'd be friends for life after this," one 22 year-old analyst on a "six figure salary" told Business Insider. Instead, she said there's no "deeper connection" at all. People at work ignore her in corridors, intentionally fail to include her in bubble tea orders, and remain in cliques reflecting their schools. "Wharton people will hang out with Wharton people, NYU people will hang out with NYU people."
This might be tolerable if she only had time to cultivate friendships outside of work, but predictably, she doesn't. "I can't go out for drinks on a weeknight, honestly. And my weekends are honestly so chaotic I can barely even do that half the time," the 22-year-old complained. "I need to be friends with somebody who understands or has a similar schedule to me."
As a result, she told Business Insider, she can only date other bankers and people with other demanding jobs: no one else would understand the constant cancellations.
The other young banker told BI she left finance because she had no control of her life and was in a "negative headspace" where she had no time for anyone else's concerns. At work, she said no one was to be trusted: "It's like even your own friends are saying small things here and there about you, just to put themselves at more of an advantage during review."
Michael Sloyer, a former Goldman Sachs managing director, suggested it might get better over time: it's only the first 11 years that are hard. Sam Glazer, a New York psychiatrist, said the best way to overcome feelings of isolation is to tackle them head on: make an effort to speak face to face instead of by email; talk to people in the elevator instead of scrolling on your phone. You could offer to buy some bubble tea, even if they don't reciprocate.
So-called "first loss funds" pay portfolio managers a higher proportion of their profits (up to 60%). However, they also ask portfolio managers to contribute their own capital, which will absorb the first 10% of losses. Losses don't get much higher than that: once losses hit 8.5%, PMs are terminated.
The arrangement has been around for a while, but is being resurrected and used at AB Asset Scale, a new fund run by the former chief executives of Odey and SAC Capital Partners in London. “We view this as a mentoring, seeding platform for future hedge fund managers or standalone portfolio managers," they say. "“This is a very impressive candidate pool because you have to have an extraordinary high conviction in your own capabilities to step into this space.”
It could catch on.
Now that it has Numis, Deutsche wants to be the top bank in the UK. "Our mission is to have a similar market position here as we do in Germany...That will take time..." Some of Deutsche's London bankers are now working in the Numis office. (Financial News)
Ex-Goldman banker and his brother accused of insider trading. The accounts were allegedly funded using the Tesco Bank loans, which the lender was told were obtained for ‘home improvements’. (Financial Times)
BNP Paribas wants to make a dozen equities hires in Asia next year. (Reuters)
Analysts at China International Capital Corp have been told not to tell anyone how much they're paid, display their wealth, fully expense meals, or say anything about deflation. (Bloomberg)
The New York Times spoke to Ardith Lindsey and 10 former employees, who spoke on the condition of anonymity, and described a hostile work environment for female employees at Citi. (New York Times)
Andrea Orcel's biggest challenge at Unicredit is the infrastructure. The bank is compsed of smaller businesses across central and eastern Europe and has a hodgepodge of inherited computer systems, which means further streamlining will be more complicated than what he’s managed so far. (Bloomberg)
Ex-Goldman Sachs bankers Scott Kapnick, Scot French and Mike Patterson founded HPS Partners. "Our competitors refer to us as the nerds of private credit and we take no offense.” They manage $100bn in assets. (Bloomberg)
More than 1,000 staff at PWC in China and Hong Kong cheated on regulatory exams. (Financial Times)
LinkedIn's AI profiles aren't great. "It feels so lifeless". (Washington Post)
The wisdom of Charlie Munger: “I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and, boy, does that help, particularly when you have a long run ahead of you.” (WSJ)
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