There’s an old joke about someone saying “I’m writing a novel” and their friend saying “oh yes, neither am I.” This is an often repeated conversation in the investment banking sectors that still employ humanities graduates; a lot of people think they have a novel in them, and many even start writing it, but somehow the work still gets in the way. Ambition is therefore postponed to retirement, and too often forgotten. But if you’re participating in National Novel Writing Month between slide reviews, take comfort in Michael Whitworth, whose “The Camel and the Butterfly” came out this year.
Michael was vice chairman of Credit Suisse for fifteen years, before the 2015 restructuring cycle saw him voluntarily lay off. But unlike many laid-off bankers, he took stock of his finances and realized that maybe this was the opportunity he needed. A few years earlier, he and his family had moved from London to live in Wellingborough, Northamptonshire. This town is about seventy miles north of Docklands, which means he had to deal with a barely survivable four-hour daily commute by train and metro, and ended up being told that the education system would classify him as an “absent parent”.
Leaving the London property market meant that the severance pay covered more than the remaining mortgage, allowing the family to live off his wife’s income while it took him two years to write the novel and a another year to find a publisher. He’s now seeing his son, doing promotional interviews for a book club, and presumably enjoying a lifestyle less likely to lead to serious stress-related illness. For the kind of person who looks up from their desk at 2 am and says “you know, I never really thought I would be a banker”, that’s living the dream.
The secret, of course, is part of having cashed in real estate and part of being able to live out your dream on a family income of Â£ 2.5,000 ($ 3.4,000) per month. (And, of course, the emotional maturity to not worry about your partner being the primary breadwinner now). With interest rates where they are, bankers who assumed they were going to retire in their forties just because they were earning so much risk being disappointed; even a modest lifestyle like the Whitworths would require an investment portfolio of over a million dollars, and to keep an average banker in the style he had become accustomed to, it might take several times that.
Whitworth might be in good company. Now that more and more companies are convinced that their ping-pong tables are no longer in use and are declaring âWork From Work Wednesdaysâ, many people, including bankers, are likely to start thinking about what to expect. could do most of their life. they are spending to do something that they fundamentally don’t want to do. This could be the dawn of a golden age of literature, as we get all the stories that were previously lost in structured derivatives.
Elsewhere, the convention in most markets is that profits are the result of hard work and skill, but losses are due to central bank manipulation. Right now, however, even the top private equity executives find it hard to claim that there isn’t a significant element of macro and luck in their returns. âI didn’t expect things to pick up so dramatically,â as Blackstone’s David Blitzer puts it.
The joy might be short-lived. Gary Gensler, the head of the SEC, suggested that once he’s done giving government procurement a hard time for the payment of the order flow and has done the industry justice in the Wild West of cryptography, private equity is next. It will focus on the conflicts of interest inherent in the industry and the extent to which investors are overcharged.
Gensler might not run out of whistleblowers in such an investigation. Although sell-side investment bankers need the private equity industry and have grown rich (albeit infuriatingly not so wealthy) alongside them, clients of financial sponsors have never been popular; they are demanding in terms of labor and price, and often bad enough to remember to say thank you. With the combination of regulatory stress and a possible turnaround in the interest rate cycle, we may soon find out who the real players were and who were simply “overpaid, overvalued and over-leveraged.”
During this time â¦
FinTech can make you rich faster than investment banking if you pick the right company at the right time – 75 of Klarna’s employees are now paper millionaires at the current valuation and an IPO is slated for it. next year. (Thames)
An unforeseen cost of equity market making activities; Ken Griffin must hire lawyers to send cease and desist letters to retail traders who are angry with memes stocks and continue to hire billboards and airplane banners to spread theories of the conspiracy about it. (Institutional investor)
The UK’s Financial Conduct Authority is recruiting outside of London, with an office of 100 employees in Leeds. She will also be hiring in Cardiff and Belfast, but only for home workers as she does not plan to have premises there. Considering that the culture of the FCA London office is quite bad, this could be a good thing. (Financial news)
A look into the past; Deutsche’s path to where it is now arguably started with Hilmar Kopper, the chairman who first introduced him seriously into the investment banking industry. Here’s a profile of him from 1993, showing how it all started (Euromoney)
“Humility leads to curiosity, and curiosity is an extraordinarily powerful tool, it allows you to investigate and look at things from a different perspective.” UBS has dominated the Australian market for centuries, but in this year’s surveys they have been badly affected by poaching, especially by start-up Barrenjoey. They are now trying to rebuild. (AFR)
How good is the stuff on the market right now? Well, there is literally a global shortage of private jets. Both NetJets and FlexJet have stopped accepting new customers. (FT)
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