Morning Coffee: Deutsche Bank elaborates on its banker hiring spree. 28 year-old finance millionaires contemplated nuclear bunker
Fabrizio Campelli, the friendly face of Deutsche Bank's corporate and investment bank, has contributed to his cuddly quotient with further elaboration on all the bankers he's hired so far and all the bankers he plans to hire still.
Campelli told the South China Morning Post that a third of the 50 new bankers Deutsche has hired this year are based in Asia, with a focus on Hong Kong and Greater China. Deutsche's Hong Kong hiring isn't done, said Campelli. There are, "more hires to come;” people are still being onboarded.
Deutsche's Hong Kong hiring reflects its European clients' enthusiasm to "play" in Asia, declared Campelli. He added that the bank has been availing itself of some "really good talent" there, which presumably includes the likes of Joe Lai from Credit Suisse and Samuel Lim from Morgan Stanley, who are joining as chairman of origination and advisory and chairman of M&A respectively.
Campelli's Asian hiring declaration is the latest in a series of statements about all the people he's been adding at Deutsche Bank this year. In April, he told the Financial Times he'd hired 26 managing directors (MDs) in two months and said the "UK is a natural market to focus on" with high-returning businesses like M&A and equity capital markets (ECM) key. In May, he spoke to Bloomberg and said he'd hired "50 industry coverage deal makers and product experts" since January and was doing some "selective hiring" for "those parts of the investment bank that tie up little capital such as M&A advisory."
Deutsche Bank is due to report its second quarter results next week. In the first half of 2023, however, Dealogic says its investment banking revenues fell by 35% - more than any other bank except Credit Suisse.
Separately, what do you do if you're a 28-year-old effective altruist who is mostly about doing good and trying to make life better for humanity? You consider funneling money into a bunker to ensure that when the apocalypse strikes, you will survive in order to keep doing your good deeds.
This is what the FTX Foundation and Gabriel Bankman-Fried, Sam Bankman Fried's younger brother, apparently contemplated. In new documents released as part of the lawsuit against FTX, Gabe is seen sending messages about buying the small island nation of Naru in Micronesia and building a bunker and a lab to explore "human genetic enhancement."
The same documents claim that FTX employees like Caroline Ellison awarded themselves large bonuses. Ellison is said to have received $22.5m in March 2022, of which $10m ended up in her bank account and $10m was invested in an AI company in her name. At one point, Bloomberg says that Nishad Singh, FTX’s former director of engineering, allegedly received a fraudulent transfer of about $477m in FTX shares and paid nothing in return.
Meanwhile...
Caroline Ellison wasn't sure about her FTX job. “Running Alameda doesn’t feel like something I’m that comparatively advantaged at or well suited to do.” (Decrypt)
Ex-Citigroup FX trader Rohan Ramchandani wanted $112m from Citi for falsely implicating him in an FX price fixing probe. The judge threw the case out of court. (Bloomberg)
Allowing bankers to keep air miles as a tax free perk creates an incentive to fly. (Financial Times)
Morgan Stanley may not be so great after all. If you assume that the $4bn of employee loans on its balance sheet come from buying-in financial advisers as employees at an average multiple of 3.25x revenues, the implication is that around 10% of the bank's wealth management revenues were recruited this way. It's less about organic growth than acquisitions. (Financial Times)
Blackstone president Jonathan Gray is feeling optimistic. “Markets will normalise and transaction activity will pick back up. It’s possible with the economy slowing you could have another pullback in markets, but we have made it through the inflation shock and most of the way through the interest rate shock.” (Financial Times)
ECM activity is picking up, but slowly. “It’s a gradual reopening rather than a flood of deals,” says James Palmer, head of European ECM at BofA. (Bloomberg)
France is feeling excited about all the banks that moved there. “The success of Paris post-Brexit is spectacular, accelerated recently and is beyond our expectations. This phenomenon is not over yet because we are seeing an accelerating trend — success breeds success.” (Bloomberg)
People who make $650k a year in New York can save more than $250k moving to Austin because it costs less to live there and taxes are lower. (Bloomberg)
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