Morning Coffee: Harsh words from UBS as Credit Suisse layoffs expedited. Non-tragic choices after throwing in a finance career
Among the great and the good of Credit Suisse, a particular way of framing this year's events has become popular. - It's not that Credit Suisse was a bad bank, or that people there were less talented (and certainly that they were not less talented than their rescuers at UBS); it's just that they had a few bad years. Last year was a write-off, goes the saying; 2021 wasn't great either; but look deeper into the past, and you will see the shining gem that Credit Suisse really is.
UBS CEO Sergio Ermotti doesn't agree. “It is crystal clear: this situation at Credit Suisse didn’t develop in the last six weeks or months, but in the last six, seven years,” he said at the weekend. The disintegration of Credit Suisse was a slow burn.
This is bad news for Credit Suisse people who now have their personal and group mythologies busted, and who Ermotti seemingly wants to dispense with as soon as possible. The Financial Times reports that Ermotti is keen to merge the two investment banks in particular as soon as possible in order to avoid "two people going out and calling institutions to sell the same products.” A 'clean team' of 100 people is already assessing who will stay and who will go, and given that Credit Suisse people have made mistakes so consistently for so long, they are presumably less likely to be on the stay list.
Credit Suisse bankers who leave will have ample time to consider who perpetrated their demise. If the rot really set in seven years ago, then Tidjane Thiam might be the one to blame. He's spent the past six months busily attempting to exonerate himself, but insiders suggest that it was his misguided emphasis on Asia and "amateur restructuring efforts and closure and crimping of vital teams," that set the bank on the wrong track.
Separately, if you're feeling a bit morose about your job, then don't throw it in to do something totally different.
This is the advice of Tom Morgan, a director at Sapient Capital in New York who spent the first 10 years of his career (until 2015) at Bank of America (Merrill Lynch) in London. Writing on the company blog, Morgan says he spent his early career as a “research salesperson”, skimming research and imparting insights to busy investors. However, he left finance in search of a more "meaningful life" during what he describes as a mid-life crisis and "two-year living hell."
The meaningful careers that suggested themselves to Morgan during this time included social worker, hospital employee, and psychologist. But none were relevant to what he had learned already and was actually good at. "In clumsily trying to transcend to the next level of growth...I rejected the skills that had got me that far," he says.
Ultimately, Morgan went back into finance, but in a different context. These days, he's selling wealth and investment management services to individuals instead of pitching research to institutional investors. If you're unhappy in your job, he says the answer isn't to do something completely different, but to "Do what you individually love, in service of the whole." In sales, for example, it's fine if you're selling something "you believe in and think the world needs, it keeps you in a state of integrity. If not, the constant dissonance will slowly eat your soul."
It's better to make these kinds of smaller changes, says Morgan. Too many, "make irreversible, tragic choices," when they leave finance, he adds, wistfully.
Meanwhile...
Pity the M&A bankers. What used to be first-year managing director pay of $1.5mn is now more likely to be $800k and it's not coming back. (Financial Times)
Investment management firm M&A has told its top managers to spend three days a week at work to maximise “the value of spending time together”. It also says that juniors want the “leadership team in the office more than is currently the case”. (The Times)
It's not easy being an equity research analyst. A large part of their value proposition is now taking groups of investors on roadshows to visit private and public companies, or providing access to their contact base of experts. They're working for bankers more than ever before, but the payments are indirect. At the same time, the number of large, long-only asset managers that consume and pay for sellside content has collapsed, and they're increasingly reliant on the multi-strategy hedge funds to buy their wares. (FT Alphaville)
Hedge fund Tiger global is thinking of cashing in some of its $40bn of investments in technology companies (FT)
Evercore is hiring a top team of media and telecommunications bankers from Credit Suisse. They include MDs Giuseppe Monarchi, Laurence Hainault and Francesco Gurrier. (Bloomberg)
HSBC has been fined $15m by US regulators for "widespread" failures over its employees' use of electronic communication tools. (Financial News)
Masayoshi Son is now personally on the hook for about $5.2 billion on side deals he set up at SoftBank Group Corp. to boost his compensation. (Bloomberg)
Pity the mothers when the fathers just want to play video games. (Reactionary feminist)
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