Morning Coffee: When big male fee-earners behave atrociously to female juniors (redux). And why you can’t work 100% remotely

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Another day, seemingly another entrant for the coveted “Worst Drinking Culture in Finance” title.  Bloomberg has a story – which seems to be multiply and credibly sourced, albeit not quite to the level where they’re prepared to name names – which describes a grim working environment at a major global fund management house.  All the familiar horrors are there, including the lunchtime boozing sessions with management, obscene jokes on the trading floor and attractiveness rating of female employees.  But in this case, there appears to be one specific and senior individual setting the tone, and if half the allegations in the story are true, this person has been seriously abusing his position for a while.

There is potentially a genuine debate to be had about political correctness in the office, the role of “banter” and jokes in bonding teams together and the appropriateness of workplace romantic relationships.  But wherever you draw your personal line between what constitutes a “robust” office culture versus a “toxic” one, there are some things that everyone can agree are wrong.  In this case, the allegations are of multiple counts of groping, kissing “visibly distressed” female trainees and unsolicited graphic text messages at midnight. 

Just as disturbingly, things seem to have been allowed to get to this state of affairs – and to get into the press – without any material involvement from the people and systems that were meant to stop it.  According to the unnamed man’s lawyer, he is “not aware” of any complaints made to HR, and according to the (also unnamed) women interviewed, they tended to be told to toughen up or dress more conservatively.  It’s hard to say whether this was a general culture at the firm, special treatment of the big star big fee-earning fund manager, or as seems quite likely, a) because b).  The firm concerned actually has a whistleblower hotline set up after a previous case that ended in a criminal conviction, but when the offender is someone who’s regarded as Too Big To Investigate, it’s understandable that nobody seems to have used it.

These days are coming to an end in more ways that one.  Every year there are fewer and fewer “big name fund managers”, as every couple of years one retires or blows up and in an increasingly process-driven and quantitative world, the next generation of stars aren’t coming through to replace them.  As well as reducing key man risk and volatility for the fund management business, this might mean that there are fewer people who are going to be put in positions where they feel they can get away with anything.

In the meantime, somebody in one of London’s biggest fund management names is going to be having a tough few weeks at work.  A big name law firm have been called in to investigate Bloomberg’s allegations, and although it’s possible they might discover about a dozen innocent explanations, that’s an awful lot of misunderstandings and a really big coincidence that they all happened to the same guy.

Separately, one of the futuristic dreams of the tech industry is to get out of occupying some of the world’s most expensive real estate and have everyone working remotely.  There’s some evidence that this makes people more productive and it’s increasingly becoming normal practice in San Francisco.  But somehow, the advantages that are suggested don’t seem like they’d work in finance.

According to productivity experts and remote working app designers Doist, the chief benefit of having everyone work from home is “asynchronous communication”, the ability to respond to messages in your own time and block out uninterrupted periods of concentration.  But financial markets are not computer programming projects – price changes and client orders happen when they happen, and messages often have to be responded to immediately or not at all.  Having invested billions in reducing latency of their trading systems down to a few dozen nanoseconds, investment banks are hardly likely to introduce working practices which result in delays measured in hours.  The advantage of having everyone in the same office is that when someone hasn’t responded to your voicemail or email and isn’t checked in to a chat, you can walk down to their desk and tap them on the shoulder.  That’s important when you absolutely have to have a reply right now, and banking turns up more of those situations than most other industries.


“Bank of America has the eye of the tiger – they see what they want and go after it”, according to analyst Mike Mayo, who may or may not be trying to indicate that their strong Q3 performance in investment banking fees will have a number of increasingly disappointing sequels. (FT)

And Citi, like Goldman Sachs, seems to have discovered that for a short time at least, it’s possible to cut sales and trading employees but not lose the revenue they generated (Bloomberg)

After being rejected for the Deutsche Bank board by the regulator on conflict of interest grounds, Juerg Zeltner now has to get his own house in order, with substantial top management cuts to lossmaking businesses in his private banking conglomerate, KBL (Finews)

Rumours in Paris that Matthieu Pigasse, the CEO of Lazard France, Global Head of M&A and a very public figure for his personal media investments, might be on the move from Lazard. (Reuters)

Famously, the percentage of the graduating class of Harvard Business School who go into investment banking, rather than industry or consultancy, is a reliable contrary indicator for financial markets.  It’s less clear what this means, but the top US MBA programs have seen a sudden and rapid drop in international applications, as business schools in Europe and Asia have gained market share. (WSJ)

And another fintech pays the price for trying to do the big walk with small feet – municipal bond primary offering platform Neighbourly celebrated its first transaction, a $2m issue in 2017, by taking its whole staff on a celebratory trip to Maui.  Now it’s bust. (Bloomberg)

As well as taking writedowns on their investments, Uber investors now have the possibility that drivers will organise protests outside their houses. (Vice)

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