After starting the week as an almost amusing cloak-and-dagger interlude on the streets of Zurich, the Credit Suisse spy story seems to be going a bit “reactor core critical”, with all manner of accusations flying around and suggestions of “swift punitive action against senior officials” comingnext, depending on what comes out of the inquiry. Tidjane Thiam can at least take a little bit of heart that uncertainty about the position is making the share price go sharply down, rather than up. - Investors appear to be hoping that it will all blow over.
At the heart of the meltdown are new reasons for Iqbal Khan’s departure at what would otherwise have been the height of his career. Back in July, the official line was that Mr Khan left to gratefully pursue his next career move, at the same time as unofficial briefings suggested that his relationship with Tidjane Thiam had gone sour because he was being too aggressive about wanting to be the next CEO. Now, according to Tages-Anzeiger, quoted in Bloomberg, it is being claimed that the source of the tensions was not anything as prosaic as a succession planning dispute – it had its roots in a “very intense row” over “a personal thing” unrelated to the bank, at a party in Mr Tidjane’s house back in January.
It is, in general, not common for private bankers to have big rows at parties. If you’ve ever watched them in action at the Frieze Fair, Art Basel Miami or similar Eurotrash events, you’ll notice that two of the things they’re really good at are keeping their temper, and protracted socialising at events with lots of white wine and not much food. If this story is true – and the Tages-Anzeiger version is not clearly sourced – it would have been very much out of character for both men, and could even have reflected simmering underlying tensions between them over the questions of Mr Khan’s ambition and public profile.
In any case, it’s another illustration of a well known piece of career advice – when you’re socialising with the boss, act like you’re under surveillance. Mr and Mrs Khan couldn’t have realistically ducked the invitation, as their house is practically next door to that of Tidjane Thiam and his partner in Herrliberg. (According to Tages-Anzeiger, Thiam has recently planted two large trees which block the Khans’ view of the lake). And of course, for most of their careers at CS, the two men were friends and allies. As Iqbal Khan was, by common consent, involved in a competition with other top CS managers for pole position in the succession planning, it would have been unwise in the extreme to let some quality face-time go to any of his competitors.
But it’s always sensible to treat these things as downside-only, risk-management types of opportunities, which can do your career a small amount of good but potentially a huge amount of harm. Traversing the gap between the world of work and someone’s home life is difficult and people often forget that the person they see in the office is not necessarily going to react in the same way as the person they see in the evening.
Elsewhere, one of the traders currently on the stand in the German “cum-ex” trial, Nick Diable, has been giving the court his life story, from turning down a place as a junior soccer player for West Ham United to starting in the back office of an Australian bank and working his way up to a trader’s job at HVB, where he met Martin Shields and Paul Mora, the two other accused. The idea seems to be that he’s portraying himself as slightly naïve and unsophisticated, unfamiliar with the technical aspects of the cum-ex trade and often only doing what he was told. That might work and it might even be true – apparently he has a very youthful face and a tendency to giggle nervously and was often asked in meetings how old he was. But anyone with very much experience of stock trading might be sceptical – East Enders and Aussies who came up through the back office are, although not as ubiquitous as they used to be in these days of internships and graduate recruitment, still pretty common on equities trading desks. And in general, they have a reputation for being tough, streetwise and difficult to push around. Perhaps the unfortunate Mr Diable is the exception.
Apparently there was more than one team checking up on Iqbal Khan; UBS has been doing “due diligence” on him up until this week, according to Axel Weber, to “make sure there will be no regret moves”. Of course, last minute regrets during the notice period might very well be on people’s minds at UBS given their experience of Andrea Orcel’s disastrous job move from the other side. Mr Weber added “Everything needs to be by the book. If things don’t happen by the book I’m not in favour of doing it”, which also feels like it might have more general relevance here. (Bloomberg)
And the background to all the Swiss news is still the fact that wealth management is the hottest of hot hiring markets right now – as well as Deutsche and Pictet, Goldman Sachs is poaching and expanding in Switzerland. (Finews, also Bloomberg)
James Dyson, the vacuum cleaner billionaire, is hiring IT and senior financial services staff for a family office in Singapore. (Bloomberg)
Christian Sewing is not going to be pleased at having to tolerate police officers in the building – Deutsche’s head office has been raided once more, in connection with the Danske money laundering scandal. A previous police raid may have been one of the catalysts for the final decision to downsize the investment bank (Reuters)
Deutsche Bank and JPM veterans are launching “Silver Spike Capital”, a direct lending fund aimed at the cannabis sector. It was always a market ripe for disruption; previously, direct lending to cannabis producers and distributors was mainly the preserve of guys with leather jackets and baseball bats rather than fleece vests and iPhones (Bloomberg)
ESG investing has been a strong hiring market recently; hedge funds are trying to find a quantitative “ESG factor” to automate the process but so far no luck. (FT)
Jamie Dimon reportedly once gave a one-minute pitch to Bob Iger, the CEO of Disney, with his idea for a romantic comedy. Sadly, there was no green light for the story of a single woman who picks a “board of directors” to choose her husband. As Iger said, “when the head of a bank comes in with a movie idea, you show respect but you don’t take it very seriously”.
Maybe Mr Dimon’s mistake was to pick a generic business theme for his high concept. They always say you should write what you know, and the investment banking industry itself is surely a fertile ground for romantic and comedic situations. For example …
Luke (Ryan Reynolds) is a sensitive, artistic Head of EMEA Rates Trading with only one dream – to become Global Head of Rates Trading. But when Steve (Eddie Murphy in a cameo) retires, the board decides to promote Luke … but to make him work alongside his old college rival, Stephanie (Amy Schumer)! With a struggle over budgets and a headcount reduction under way, sparks are bound to fly, in more ways than one. You can’t fail to be moved by “Co-Heads”, coming this summer.
Sarah (Paris Hilton) just can’t stand her fellow intern Mike (Justin Bieber) and he can’t stand her either. She’s a studious MIT grad and spreadsheet whizz; he’s the rich and entitled son of an emerging market government official. Everything changes, though, when their boss Luke (Ryan Reynolds) makes them work together on the pitch-book for an ethically questionable sovereign wealth fund with connections to Mike’s dad. Everyone grows a little wiser in “The All-Nighter”, coming this summer. You won’t want to miss the “change of shirt” scene!
Kate (Kim Kardashian) is the rates trader who knows that she isn’t meant to speak to the LIBOR submitters. But Jeff (Jay-Z, if unavailable Chris O’Dowd) has such a sexy voice that she just can’t resist calling him up every day! It’s all relatively innocent fun, until compliance officer Luke (Ryan Reynolds) finds out. But Luke has had a crush on Kate for years! What is he going to do; follow the compliance manual or follow his heart? You’ll get more than a colour-of-the-market update from “Values At Risk”, coming this summer.
We also have pitches for “Succession Plan” (Ben Affleck’s kids try to find a new mom while he tries to get the CEO’s job), “Deferred Compensation” (Steve Carrell is a 50-year old quant, Tina Fey a finance professor), “Goldman Sachs At 150: Part 2” (the original characters, on vacation in Jamaica and featuring Ben Stiller as Lloyd Blankfein) and “It Happened In Davos” (not much more than the title for this one).
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