Morning Coffee: Fund management firm hiring non-top graduates on £16k instead of £45k. Why JPM's fine could yet grow

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Is there really much difference between grateful, hardworking mediocre graduates who may not have achieved top grades for extraneous reasons, and smug high-achieving A* students who feel entitled to the job? More to the point, is it worth paying £45k a year for a smug high achiever when you can pay £16k and get a grateful good-enough?

A group fund management firms has decided to go for the £16k option. The Times reports that Henderson Asset Management, JO Hambro and 10 other firms are participating in a scheme 'Investment 2020' which trials non-typical candidates in fund management jobs for one year and pays them £16k

“The City becomes exclusive because we get spoilt for choice," Nicola Pease, fund manager and former head of JO Hambro, told The Times. “It’s just a practical thing as to how you sift through the sheer number of CVs. I can do that by saying I want people from only these three degree subjects from these four Russell Group universities. But in doing that there is a risk that those people can be complacent."

The people who come in under Investment 2020 are, "amazed and excited by the opportunity they have been given," said Pease. "You find you get people who are willing to network and take advantage of that opportunity.” Recruits under the scheme include a 19 year old school leaver who decided not to go to university but instead trained as an accountant and is now researching hedge funds for a team of senior analysts. A lot of today's fund managers have non-typical backgrounds, said Andrew Formica, chief executive of Henderson. People with first class degrees from top universities all think the same way, he added.

Separately, the largest ever fine levied against a single bank looks likely to be inflicted upon JPMorgan. The U.S. bank is in the final stages of negotiating a $13bn payment to cover fines ($9bn) and relief for homeowners ($4bn). Unfortunately, this may not prove the last of it. If agreed, the new fines will cover civil, but not criminal allegations reports the Financial Times.  A federal criminal investigation of JPMorgan's conduct in the residential mortgage securities business is currently being handled in California. If JPMorgan admits to wrongdoing as part of the settlement, there is also a danger that private litigants will bring claims against the bank, increasing the compensation bill still further in future.

Earlier this month, JPMorgan set aside $23bn to cover litigation expenses. It may need to call upon all of that yet.


UK's top fund manager is no Oxbridge-educated City type with a lavish office in the Square Mile. He works in an unassuming business park on a side street in Henley-on-Thames and has a degree in agricultural economics. (Guardian) 

Once upon a time, Jamie Dimon sat opposite Barack Obama at Washington dinners. Now he’s assigned a seat in the corner. (WSJ) 

Fear at Deutsche Bank: 50 employees pulled up over possible manipulation of LIBOR. (Reuters) 

James Gorman says Morgan Stanley has a culture of expense management of the kind he hasn't seen for some time. (Bloomberg) 

James Gorman says Morgan Stanley is investing in fixed income people and fixed income technology. (Reuters)

In 2007, Lloyd Blankfein's bonus /variable pay was 88x larger than his salary. (  

Credit Suisse equities analyst was earning £11k a month net before the botched birth of her son. (The Times) 

It may be that the high-water mark for physicists transferring to Wall Street has passed. Big data is no longer exclusive to finance. (Financial Times) 

“People don’t like to be treated like criminals just because they’re successful,” says a French banker friend who has recently moved to London. (Telegraph) 

Temasek is opening in London in 2014, with a team of no more than 10 people. (Telegraph) 

What it’s like in the Goldman Sachs cafeteria. How to save yourself money when you visit. (CNBC) 

JPMorgan's 'coding community' seems heavily populated by men. (Facebook)

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