Morning Coffee: Citi's Vis Raghavan says he's "cheap" when he hires, implies Citi MDs are lazy. 24-year-old ex-banker's nightmare sleep schedule

Vis Raghavan, the inordinately well paid head of Citi's investment bank, is having a moment. Bloomberg and the Financial Times have produced profiles of him. Both agree that Raghavan is highly ambitious, that there are signs he's succeeding, and that Citi's incumbent bankers might find him a challenge

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While Citi CEO Jane Fraser reportedly travelled to the home of wealth management head Andy Sieg to personally persuade Sieg to join Citi, Bloomberg says Raghavan didn't require such wooing. Ragahvan reportedly called Fraser with an "audacious" pitch, claiming that he could "work wonders" for Citi's investment bank. Fraser was hooked.

Raghavan's pitch to Fraser isn't explained, but it seems to have involved freshening up Citi's franchise with new recruits, particularly from Raghavan's former employer - JPMorgan. At least 10 JPMorgan managing directors have arrived under Raghavan's aegis. Some have been promoted into new roles; several are doing bigger jobs than before. Speaking to the FT, Raghavan suggests he doesn't hire the biggest names. “When we hire, I am cheap,” he declares, adding that people join Citi for the challenge of improving an underdog, or because they spent so long in their old jobs that they were bored. Nonetheless, he can't have been paying badly. - Bloomberg says JPMorgan has declined to match some of the offers Raghavan has made when he hires its people.  

Citi's existing bankers aren't so sure about Raghavan. An array of big Citi names (Anthony Diamandakis, Tomasso Ponsele, Tyler Dickson) have quit since he arrived. An unnamed senior banker told the FT that Raghavan is "tough." He believes more in the franchise than in the individuals. He likes to "squeeze it hard."

Some at Citi think the squeeze is a fine thing. One departing Citi banker told us in May that his former colleagues were so demotivated after years of mediocre bonuses that Raghavan is what's needed. However, Bloomberg says the old Citi guard are vexed about their exclusion from Raghavan's hiring decisions and worried that all the recent spending on recruitment will mean another dire bonus year for them. 

There are signs, too, that Raghavan is impatient with his Citi colleagues. Bloomberg says he's remonstrated Citi's MDs for failing to reach out to CEOs to win business; "wallet" is being left on the table. The implication is that they are lazy. In an interview with the Wall Street Journal last year, unnamed Citi bankers appeared to have internalised criticism from their new master. “We’re embarrassed by how little we’ve done, for a long period of time,” said one, referring to the bank's failure to work with private equity firms. At the time, this was passed off as the bank's historic risk aversion. Now, though, Raghavan seems to think it has more to do with Citi bankers themselves. 

Not leaving wallet on the table is important because Raghavan has big plans. Raghavan told the WSJ last November that he wanted Citi to achieve 5% of investment banking fees by the end of 2025, up from 4.6% at the time. Dealogic says Citi currently has 4.8% of the fee pie. Bloomberg says Citi has displaced rivals on two recent major deals, but he's not at 5% yet.

Raghavan reportedly wants Citi to compete with Goldman Sachs, JPMorgan and Bank of America. Citi must become "the reference bank" for clients, he declares to the FT. Financial sponsors and leverage finance are the key to this: if Citi wins there, Raghavan says "there is a mathematical inevitability" that it will be in the top three. 

It all sounds very different to Jane Fraser's own FT profile back in February 2022, when she said Citi didn't want to break into Wall Street's top league of investment banks and was more focused on transaction and commercial banking instead. Maybe Fraser has changed her mind? Maybe it doesn't matter. Both the FT and Bloomberg observe that Raghavan wants her job. He's the one driving strategy in the investment bank now.

Separately, Dana Schoolsky, a former investment banking analyst at Guggenheim, has spoken to Business Insider about why she's left banking for TikTok. 

Schoolsky says her time in banking was incredibly bad for her mental health. This seems to have been at least partly due to her crazy sleep schedule. 

When she worked for Guggenheim, Schoolsky says she'd leave the office between 6.30pm and 9pm but might receive more work "at any point in the night." 

This mean she'd set an alarm to go off every 90 minutes, that she couldn't sleep and was beset by anxiety. At TikTok, she says this doesn't happen: she might still get a message from her boss at 2am, but there's no need to respond immediately. 

Meanwhile....

Ryan Walsh, a former portfolio manager at Citadel and Millennium, has launched Laurel Lake Advisors, a talent agency for hedge fund managers. It sounds a bit like a headhunting firm, but top PMs pay Walsh to help them find roles. He says, “You shouldn’t negotiate a life-changing contract by yourself," and works from 5am to 10pm. (WSJ) 

Hong Kong and India are having an excellent year in ECM. “The third quarter has been the busiest period we’ve seen in years.” (Bloomberg) 

A regulatory update, CRD6 means US and other foreign banks will probably have to increase their EU headcount in both client-facing and back office roles like compliance by 2027. As many as 1,000 jobs could be moved to Europe. (Bloomberg) 

Marco Argenti at Goldman Sachs says there might be fewer junior engineers due to AI: "I expect a change to the composition of the workforce — for example, more senior engineers relative to junior. If you ask me the net number — up or down — it's hard to say at this point." (Business Insider) 

Accenture employed 779,000 people at the end of August, it said, down from 791,000 three months earlier, after beginning a round of lay-offs that will continue until the end of November. It's cutting people who can't be retrained in AI. (FT) 

An AI can now pass the CFA III exam within minutes. (CNBC) 

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