Morning Coffee: How to make managing director at Morgan Stanley. Sam Bankman Fried suggests a colleague was an idiot
Life continues amidst the angst occasioned by the cuts at Goldman Sachs. While some Goldman bankers stumble into the drizzle, bankers at Morgan Stanley are being promoted. LinkedIn is awash with Morgan Stanley bankers proclaiming their new titles and in the mix are Morgan Stanley's 184 new managing directors.
They include people like Michael Baruffi, an energy and natural resources banker in APAC and Alexei Kaminski, the global head of commodities strats, based in New York. The most notable thing about Morgan Stanley's new MD list, though, is the women: they're close to 40% of the total.
Morgan Stanley's new MD list includes women like Rita Touma, an MD in the EMEA consumer and retail group. Of the 184 people promoted, 38% - 70 people are female. That compares to 30% in the most recent class of MD promotions at Goldman Sachs in November '21 and to what seemed to be a derisory 15% women in the recent Barclays MD class. If you're female, the implication is that Morgan Stanley might be the place to work.
If you're a woman at Morgan Stanley you may also now be slightly more likely to make MD than a man. Although the bank said last year that women are 39% of its total staff, female representation at all banks is typically more focused in junior ranks. Only 27% of 'officers' at Morgan Stanley were women in 2021 and women account for only 24% of the existing class of MDs. The implication is that Morgan Stanley is doing its utmost to improve this.
Men are still the bulk of the promotions, though, and X chromosomes aren't the only determinant of success. It helps to have worked for Morgan Stanley for a while - the typical new MD has spent 10 years with the bank. It also helps to work in investment banking or sales and trading - 40% are drawn from the institutional clients group. Infrastructure professionals were chosen too - they accounted for another 33% of the new MDs, reflecting both the importance of people like technology staff and the fact that they tend to be more populous than other groups.
Separately, Sam Bankman Fried has gotten himself a Substack account and has begun sending emails further expounding upon his version of events at FTX.
The first of the genre channels the notion that the collapse of FTX wasn't Sam's fault and variously blames other people/entities, including Sullivan & Cromwell, FTX's new CEO John Ray III, Changpeng Zhao at Binance, and Caroline Ellison, who was running Alameda Research.
The way SBF tells it, Ellison was incompetent. At the start of 2022, SBF says Alameda had a NAV of $100bn, $8bn of net borrowing and tens of billions of dollars of liquidity. As markets then crashed "again and again and again," SBF says Alameda repeatedly failed to hedge its exposures. It was only in summer 2022 that the firm "finally" put some decent hedges on, says SBF. And it was only in October 2022 that Alameda's hedges were any good. By this time, SBF estimates that Alameda's assets were less than a fifth of their value at the start of the year.
Caroline Ellison, who is seemingly working with prosecutors, may have her own version of events. In the short term, though, it seems reasonable to wonder why SBF didn't give Ellison a steer. After all, she only 19 months prior work experience as a junior trader at Jane Street.
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