Morning Coffee: French bank director fined over use of sardonic names for colleagues. Millennium’s new pitch, beyond its $50m pay

Some people, in banks just as in the playground, have a knack for giving nicknames that sticks.  The Financial Times suggests that Benedict Foster, the former head of legal for debt and equity capital markets at BNP Paribas, was a master of this art. However, Foster's talent for combining a joke with a serious point about someone’s personality or career has cost him dear.

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Foster spent over two decades at BNP Paribas in London, which was more than enough time to hone his art. Someone who never appeared to do anything except hang around visiting top executives was called “the global head of bag carrying”.  He called another colleague (presumably a compliance officer or risk manager) “Doctor No”. "Les Miserables” were possibly Foster's French colleagues who shared a cautious or pessimistic outlook on markets. Someone who always managed to get out of the way of trouble or responsibility might be named after “Phil Bennett”, the rugby player famous for his graceful side-step.

Nicknames like this could be considered no more than a bit of fun. But once you get into the habit, there is always the temptation to push things too far.  Foster also called colleagues, “Biryani”, “Pol Pot”, “Mad Paul” and “Jabba the Hutt.”  Reports from the Solicitors’ Regulatory Authority tribunal, Foster went quite a way beyond that, simply naming some of his coworkers, "c*nts."

Part of the problem appears to have been that (as Foster’s own legal representative pointed out) all the evidence dates from the pandemic period.  Everyone was under stress, many were acting a little strangely, and it was difficult to pick up the social cues when your behaviour was getting weird or unacceptable.  And, of course, people were doing a lot more of their communication through text based channels, without necessarily realizing that something which might have previously been a whispered conversation was now being preserved for the archives.

BNP Paribas may be particularly sensitive to such things, given other cases in the last few years concerning inappropriate banter.  After initially keeping Foster on after an internal disciplinary investigation, they finally reported him to the professional regulatory body in 2022.  He’s now been fined £15k ($19k) with a further £16k to pay in costs, and his current employment status is “retired”.

Foster's fate is a reminder that while some bankers have been rejoicing that the backlash against DEI means you can say what you want, this isn’t necessarily true. Investment banks are often surprisingly like high schools in their culture, but common sense might suggest that it’s usually best to let someone else have the coveted title of class clown.

Elsewhere, what do you give the multistrat hedge fund manager who has everything, including a $50m signing package?  Equity in the management company, perhaps? Millennium Management currently has a very simple ownership structure – Izzy Englander, one hundred per cent. Now, it seems that Englander, at the age of 76, is beginning to consider options to change that.  Some top employees, and potentially also BlackRock, might be taking equity stakes.

This looks like another step on the road to institutionalization of the hedge fund industry. At present, employees’ incentives are pretty closely aligned to investors; $10bn of Millennium’s $76bn of assets under management are the wealth of its own staff.  But their incentives aren’t all that closely aligned to those of Millennium itself – the biggest and most successful portfolio managers might do better by leaving to start their own funds.

Change like this is always difficult, and many banks and hedge funds have had cause to bemoan the fact that once someone’s a shareholder, they have a whole new set of ownership rights.  But it’s also inevitable; in order to move beyond the “pod shop” model, the big multistrats are all likely to have to address the fact that top talent won’t be content to work for someone else forever.

Meanwhile …

It’s not just multistrategy funds that have to think about the long term; as Brevan Howard and Rokos Capital have both discovered, it’s quite hard for global macro funds to outgrow their star trader founders. (FT)

With the slightly chaotic environment of the last few weeks, optimistic forecasts about deals in 2025 are getting rowed back in both London and New York.  Having spent most of 2024 expecting things to start to happen once the overhang of political uncertainty was cleared, IPO bankers are still hanging on. (Axios; Bloomberg)

But JPMorgan is still putting its money where its mouth is; they’ve hired Keith Heller, a long term Morgan Stanley veteran who joined Citi in 2023, to be a Managing Director in their financial sponsors team. (Financial News)

It seems that BigTech is not as hospitable to “boomerang” employees as investment banking.  Meta keeps several different “do not rehire” lists, it’s almost impossible to get removed from them if you’ve been placed on one, and according to some employees, people are put on them for quite minor reasons, often just because a manager didn’t like them. (Business Insider)

Michael Grimes of Morgan Stanley, who is famously Elon Musk’s favourite banker, might be put in charge of a US sovereign wealth fund. (Reuters)

If you want to eat at a fashionable no-reservations restaurant but don’t want to disrupt your baller lifestyle by standing on the pavement for an hour, the going rate in Manhattan is apparently about $25 an hour for a “line-stander”.  For a 90-hour week, that would be $117,000 pro rata; a bit less than being a first year investment banking junior and presumably no chance of asking for protected weekends.  (WSJ)

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