Morning Coffee: The trouble with CS First Boston's plan to become Goldman Sachs. JPMorgan’s 100 most important technology staff
It's over. Last week, senior Credit Suisse bankers travelled to New York for a week-long pep talk with Michael Klein, their new overlord and the man who will run CS First Boston if and when it becomes a separate entity. Now, they have been returned to their environments to report on what was said.
Some have been talking to Bloomberg ahead of this communication. The New York meeting reportedly touched upon marketing CS First Boston, strategies for Asia and Europe, the fact that the 'boutique bank' will also be big into private equity and leveraged finance, and the formation of between 50 and 100 partners in the style of Goldman Sachs.
It's the latter that's likely to be particular contentious. "Hundreds" of people attended last week's meeting, but only a subset of them will receive the new prize. Last week's exit of Nohshad Shah, Goldman's EMEA head of rates sales for hedge fund Marshall Wace, illustrates what happens when someone who really wants to make partner finds themselves thwarted in a year when bonuses are also not great.
The question for CS First Boston now is how it keeps hold of all those people who don't make partner there. The hope will be that last year's $300m in retention bonuses and the clawback of bonuses for anyone earning more than $250k will be sufficient to keep people in place, but this may underestimate their disgruntlement at being shunted down the hierarchy.
It's always possible, though, that Michael Klein will welcome people leaving. The departure of tens of highly paid but demotivated existing bankers would open an opportunity to recruit some new and energized people instead. Klein is already said to be on the lookout for flagship CS First Boston hires. Some may join as partners; others can join with the lure of making partner one day - much like at Goldman Sachs.
Separately, JPMorgan's technology function includes 100 people that the bank particularly does not want to leave. The New York Post reports that they're working in algo trading technology and have six-month notice periods. This only came to might after one tried to resign and discovered he was going to have to wait a long time to do so.
Harris Associates, which was once one of Credit Suisse's largest and most loyal shareholders, has sold its stake, saying, "Why go for something that is burning capital when the rest of the sector is now generating it?” It's also raised questions about the lack of transparency around CS First Boston and the price achieved for the sale of the securitized products group to Apollo. (Financial Times)
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Morgan Stanley shares have had a total return over 110% since the start of 2020, versus over 65% for Goldman. (WSJ)
Citadel has a team of 20 meteorologists, mostly in London, who use supercomputers to run forecasts and specialise in areas such as thunderstorm and tropical cyclone prediction. (Financial Times)
ExodusPoint was up 2.9% in 2023 through February and is the best performing multistrategy hedge fund so far this year. (Business Insider)
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Sam Bankman Fried is under house arrest on the Stanford Campus and students are looking on. (Business Insider)
Only 5% of workers work weekends, but those who do have been working longer. (Bloomberg)
Barclays' CEO C.S. Venkatakrishnan's cancer is in remission. (Bloomberg)
A married hedge fund manager who spent $250k seeing a therapist with whom he entered an intimate relationship, says he had PTSD and that it was erotic transference. (New York Post)
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