Morning Coffee: The sweary Morgan Stanley trader Goldman Sachs should hire. Nomura declares IBD hiring intention, again
It would be hard to conceive of a more mild-mannered, gentlemanly CEO than James Gorman, the Australian ex-McKinsey & Co. consultant at the helm of Morgan Stanley. Gorman may have flashes of steel - as demonstrated by his decision to publicly and unexpectedly warn British prime minister Theresa May of the risks of Brexit at a public event, but it's difficult to imagine him loudly swearing about issues related to his day job.
Not so Ted Pick, who may well replace him. In a piece on Pick's success in turning around Morgan Stanley's once struggling fixed income, currencies and commodities (FICC) business, the Wall Street Journal says Pick sends such profanity-laden emails that Gorman's predecessor John Mack pretended the bank's compliance department had flagged him for excessive use of expletives.
A little swearing is tolerable, however, when you have a gift for turning trading businesses to gold. It was Pick and his English lieutenant, Sam Kellie Smith, who together fired 25% of Morgan Stanley's fixed income traders in December 2015. They cut risk-weighted assets. They cut European credit traders, as business was slow. They cut FX traders, as business had gone electronic. They kept people in rates and U.S. credit, and they combined equities and fixed income sales teams to get more out of hedge fund clients. Pick and Kellie Smith improved risk controls, and reduced "slippage" on liquid bond trades (the change in price between when an order is placed and when an order is traded).
The rest is history: Morgan Stanley's fixed income sales and trading business was bigger than Goldman Sachs' in the first quarter. Nor was this a one off: when Pick ran Morgan Stanley's equities business, it too grew to exceed Goldman's in size. Goldman Sachs could clearly do with some of the Pick magic, but Pick's a MS lifer. - And when Gorman retires he's tipped to replace him, at which point the tone from the top could be very different to what it is now.
Separately, Nomura is at it again. The Japanese bank, which likes to declare its intention of hiring senior U.S. investment bankers, has declared its intention of hiring some senior U.S. M&A bankers. It wants to recruit another 12 "senior to mid-level" bankers covering M&A, equity capital markets, and debt capital markets according to Reuters. It's all due to happen within the next 12-18 months.
London-based FX trader XTX Markets is making a play for U.S. equities trading. Just don't expect it to hire many people. (Bloomberg)
"London whale" Bruno Iksil has produced a dense 12,000 word document arguing that Jamie Dimon was responsible for the $6bn loss attributed to he and his colleagues: "He [Dimon] pulled the strings all along. He knew what he was doing."
"Being a fund manager is more than a job, it’s a lifestyle, and you have to fully immerse yourself. Don’t ever expect to be able to switch off.” (Financial Times)
Credit Suisse has been hiring for its growing office in Poland. The average member of staff there is 30 years old. (Credit Suisse)
Blackstone's head of private equity says you've got the industry all wrong: "The perception of buyouts is that it’s all financial engineering. The reality is much different. We’re not arbitraging things. We’re buying a company to own it for as much as 15 years. We’re having to live with that business and make it better.” (Financial Times)
Private equity's woman-problem is worse than Uber's. (Gadfly)
Ex-Goldman Sachs bankers (including the former head of GS in Frankfurt) are queuing up to run the Democratic Party. (Bloomberg)
British-based banks face more than a six-month wait before they are granted relocation licenses to operation in the EU after Brexit. (Financial Times)
You can use the Bank of England's new £5 note as a puncture repair kit. (Road)