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Goldman Sachs doesn't satisfy quite like Credit Suisse

Morning Coffee – Credit Suisse has happier junior bankers than Goldman Sachs. The 25 year old making $7m from his parents’ basement.

Some things don’t change very much from year to year in the Odyssey Search Partners survey of junior bankers.  They all want to go into private equity, they talk a lot about being given more responsibility and they work silly hours.  They self-report themselves as being surprisingly happy given how much they complain the rest of the time. 

And so on; most of the cliches are true.  But this year, there’s a slightly surprising result.  Every year, the happiest kids are the ones working at top-tier boutiques, followed by bulge bracket banks, then the rest.  The gap has narrowed slightly this year, for what it’s worth.  But more surprisingly, there are two bulge bracket firms in the top ten ranked by junior banker satisfaction – Morgan Stanley and Credit Suisse.

The first of these names is easy to understand.  Morgan Stanley is generally agreed to have had a good year last year, with market share gains in many key areas, and with a best-in-class share price performance.  CS, on the other hand … not so much?  So, given that senior bankers like Cathal Deasy are still leaving (only three months after having been promoted to co-head of the European investment bank), what are the juniors finding so much better?

One clue from the other answers given to the Odyssey survey might be that it’s the very distress and uncertainty of the higher ranks that’s making the juniors more contented with their lot.  Analysts at other banks say things like “the culture is not the best, and I sometimes feel like my senior teammates are not the most helpful and take accountability for their mistakes”.  It’s a lot harder to be arrogant when your bank is on the front pages every day for all the wrong reasons, and it can often build an “us against the world” mentality that’s helpful for team building.

There’s also potential for the analysts to see turmoil in the upper ranks as an opportunity.  The old navy toast was to “a bloody war and a quick promotion”, and higher staff turnover in banking can create a similar effect.  Junior bankers are always looking for more opportunities to get in on deals (survey respondents bemoan that “I have not had exposure to learning technical concepts, but rather have been focused on more administrative topics”, and “One thing I’m looking forward to is being asked for my opinion … in the future”).

And finally, of course, optimism is one of the qualities that banking selects for, and when things are at their worst, there’s nowhere to go but up.  Some people will lose their jobs at Credit Suisse this year, but that’s true at every other firm on the Street and one day the share price will turn round.  One of the very best reasons to be happy about your job in conditions like these is that you have to laugh or else you’ll cry.

Elsewhere, Darren Nguyen of PO Street Capital is one of the traders who did well out of the crypto boom.  In regulatory returns filed in Austrialia, he has reported that for the year to June 30 2021, he made A$10.4m (equivalent to US$7m) of trading profit.  He also reported that the address of his crypto firm was a residential address, owned by his mum and dad.

Filings like these are obviously only reported with a lag, and given the changed conditions in the crypto market, it’s certainly worth speculating whether eighteen months later, Darren might be living with his parents for a different reason.  However, when reporters made a house visit to see whether this was for real, he was still there and apparently still trading.  PO Street Capital seems to be a one-man firm, which has paid substantial cash dividends (and repaid loans) to its founder in the period when it made the big profits, so even if some of the $7m was mark-to-market gains which may have been given back, he’s still doing pretty well for a 25 year old.

Meanwhile …

Some tips for people applying to the extremely competitive summer intern program at Lazard, of which the first is “have a good answer when they ask you why you want to work at Lazard”.  That might seem obvious, but according to Danielle Dodgen (the head of campus recruiting) a surprising number of people just seem to feel like it was the thing to do.  (Business Insider)

Who are Sam Bankman-Fried’s mystery friends?  His lawyers have applied to the court to have the names of two people kept secret who signed his bail bond, claiming that making their names public would expose them to harassment and even death threats. Bernard Madoff is also apparently claiming in a new documentary that he went to jail one step ahead of the Mafia. (NY Post)

There are two main reasons that people go into private equity – the money, and the things you can buy with the money.  Michael Steele was probably not exactly broke as a partner at Kirkland & Ellis, but now he’s gone over to the client side and, “in a sign of his commitment to the role”, he’s bought a $38 million mansion in Malibu. (Financial News)

Once more, the reality television industry needs to be reminded of what constitutes a “City banker”.  The UK version of The Apprentice is welcoming Avi Sharma, whose LinkedIn reveals that he spent three years on the graduate program at Barclays, most of them seemingly in small business banking, and that he was “booted off” the Nottingham University Finance & Economics Society for lying on his CV (Radio Times)

As well as being a solid candidate for the least euphonious hedge fund name ever, SurgoCap Partners, the new fund from former Lone Pine manager Mala Gaonkar, has taken the three-month-old record for the biggest launch by a female-owned hedge fund at $1.8bn. (Bloomberg)

When the sell-side is catching a cold, the buy side is bound to get a few sniffles – asset managers are also likely to be cutting costs and jobs in 2023. (FT)

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