Morning Coffee: Citi exec said she left when her father told her to enjoy life, no mention of Sieg. How to avoid spending $100m on a portfolio manager

The convenient thing about people who have left your employer is that they are no longer around to contradict you.  So, if you want to add a bit of weight to something you’re saying, it’s often tempting to attribute it to a well-liked or respected former colleague.  It’s a fairly elementary tactic of office politics.

We’re not necessarily saying that’s what’s happened here, but it is noticeable that in the initial press reports of the HR complaints about Andy Sieg, anonymous “people familiar with the matter” claimed that Naz Vahid, the former head of Citi Global Wealth at Work (and a managing director with nearly four decades of experience) left the company “partly due to concerns about Sieg’s treatment of colleagues”.  Maybe she did, but that’s not actually what she said at the time.

In a eulogy for her father written two months ago, Naz Vahid wrote that her father, “looked me in the eye one afternoon...and said, “Don’t you want to just live a different life now? You’ve done so much—we’re so proud of you—but now, live the life you truly want. Enjoy it while you’re still young.” It was this, said Vahid, that prompted her to find a “new chapter” in her life. There was no direct mention of Sieg and his alleged shouting.

People can do things for more than one reason, of course, and the office climate is one of the things which affects the relative attractiveness of different life paths. But it is noticeable that in throwing shade at Sieg and saying that his behaviour encouraged people to leave, the “people familiar with the matter” (several of whom are apparently also no longer at Citi) overlooked the other issues encouraging exits.

Everything is a matter of perspective – the same sequence of words can be “an expletive filled rant” from someone you don’t like, or an honest and frank assessment if you agree with what’s being said.  Citi is supporting Sieg, while pointing out that because he’s so senior, they have to call in an external law firm as it wouldn’t be credible for the HR department to handle this one themselves.  And realistically, what else might they be expected to do? The appointment of Paul Weiss should demonstrate to the complainants that they’re getting a fair shake, and to everyone else at Citigroup that nobody, no matter how senior or how important the business they run, is above the rules.

Elsewhere, how do you have a hedge fund with no $100m hedge fund managers?  According to Taproot Management, you just employ a lot of analysts (the people who spend their time looking at stocks and picking winners and losers), then use a “proprietary technology platform” to do the job of sizing the positions, cutting losses and managing the risk. 

This is not a completely unknown way to run a fund – the Marshall Wace TOPS system actually takes it a step further, by aggregating and processing the recommendations from sell side analysts rather than hiring any directly.  But historically, it hasn’t been terribly popular, for a number of reasons.

These aren’t so much to do with fund management being a unique skill that can’t be automated – Taproot’s founder used to work at Millennium and its former CIO came from Two Sigma, so they know what they’re doing.  The problem is that the purpose of the strategy is to save money; analysts are much cheaper than managers.

But the savings might not be sustainable.  If the fund does well, then the analysts will take a lot of the credit, and they will want to be paid more.  If it doesn’t, then lower expense ratios aren’t going to save the business.  Like any other form of juniorisation, trying to save the cost of human capital is usually a false economy.

Meanwhile…

Pity the poor private equity recruiters.  A job that used to “only” involve bullying confused 23-year olds in hotel suites at 4am is now up in flux.  The 2025 cycle appears to be missing entirely, but specialists in this particular area of headhunting think that “on-cycle” will come back next year.  Is this a coping tactic or is it difficult to shift incentives?  Time will tell. (Business Insider)

Bill Derrough, a co-head of the restructuring team at Moelis, is going to Jefferies to be chairman of its own growing franchise. (WSJ)

It is really, really expensive to fire and replace a CEO, when you add up the cost of severance packages, search processes and the signing-on bonuses.  Of course, it might be considered cheap at the price in some cases. (Bloomberg)

Utsav Dahiya, an associate at Morgan Stanlley in Sydney is also, apparently, a singer and Instagram influencer.  He is apparently currently involved in some absolutely incomprehensible drama with another influencer who may or may not have “twisted their relationship for sympathy and content”. (Zee News)

The horrible irony of parenthood is that the only way you can afford any daycare is to take a job with such long hours that you need much more daycare.  Thinkers weigh in on this growing problem for the future population. (WSJ)

If you are getting tired of life as a junior banker, become an essay coach instead!  If you are good enough (and good enough at finding rich clients) you can make $200k a year, only work during the university term and best of all, you’re the one handing out “pls fix” comments. (Business Insider)

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