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Morning Coffee: Goldman Sachs declares the end of summer. Top analyst leaves investment banking but gets dragged back

Despite all the headlines, David Solomon isn’t acting like someone who’s worried about losing employee popularity contests.  Apparently, some people at the firm have been reminding others that the expectation is that everyone needs to be in the office five days a week.  Although the official line from the HR department is that it’s just a reminder of the existing policy (in case anyone might have forgotten while the interns were in), it seems that employees are taking it as a crackdown on “Summer Fridays”, which have apparently seen the trading floors and offices get a bit empty and echoey.

It's been met with a bit of grumbling, apparently – staff talking to the New York Post have suggested that everyone would have come back after Labor Day anyway and that it’s “aggravating” for management to be getting on everyone’s backs about attendance “when morale is already so dismal”.  Although, of course, people who talk to tabloid newspapers shouldn’t necessarily be taken as a representative sample of the workforce, particularly at a bank like Goldman where the majority of people have traditionally had more common sense than to do that.

In fact, one of the drivers of the back-to-office reminder note might be exactly that people have been talking to newspapers more than David Solomon would like.  It’s somewhat more difficult to give anonymous quotes about the CEO to a reporter while you’re sitting in an open plan office with your personal mobile phone locked away and all the confidential messaging apps removed from your work phone. 

It might also be more than usually important for Goldman’s top management to have a really strong finish to this year.  Although the bank seems to be back on top of the M&A and equity league tables, things were considerably closer in the first half of 2023 than anyone there will have liked.  And with a potential return to dealmaking activity in the last quarter following a very weak first half, there could be some quite volatile effects on market share if any of the big players were to stumble.  So it’s in everyone’s interests – particularly the CEO’s – to get all the pitchbooks polished and “pls fixed” ahead of time, ready for a rousing welcome-back speech and a frenetic burst of effort. 

So, a few Hamptons rentals might need to be cancelled early, some commuter rail tickets might need to be renewed ahead of schedule and midweek happy hours might be less of a thing.  Back to work, everyone.

Elsewhere, Bél Air Brands is not to be confused with Bel Air Athletics, Belair, Bel Air Branding or indeed the Fresh Prince of Bel Air.  It’s a strategy consultancy run by Richard Taylor, the former head of EU consumer sector research at Morgan Stanley.  Except that presumably it’s not going to be doing much strategy consulting anymore, because Richard Taylor has now been hired by Jefferies to be an MD, reporting to its head of UK investment banking and focusing on consumer products and consumer healthcare sectors.

Although not completely unknown, it’s uncommon for equity analysts to make the jump across from sales & trading to investment banking.  It’s even more unusual to do so via two years out of the market running one’s own business, although Taylor started his career at McKinsey and so might have been more likely to go down this route than others and independent consultancies run by former bankers are often seen as a more subtle thing to put on your LinkedIn than “made my money and left, but might come back for the right offer”.  In any case, one more former star of the sell side is now back in the game, and Jefferies is continuing to add MDs as if winter wasn’t coming.

Meanwhile …

As the saying goes, “it is not enough that I succeed, others must fail”.  That’s certainly the attitude investment bankers take when it comes to league table credit, and consequently the equity capital markets teams at Goldman, JP Morgan and Barclays (and Mizuho) will be particularly pleased to see that Morgan Stanley doesn’t seem to be in the syndicate at all for Softbank’s IPO of ARM.  This is likely to be the biggest deal of the year, and consequently extremely important for league table positioning.  (It’s not unheard of for bankers to lobby to keep rivals out of deals as well as for them to be included, although there are no indications that this has happened in this case).  Morgan Stanley bankers are likely to be telling each other that success is defined as much by the deals you don’t do as the ones you get, as it seems that one of the reasons they’re not included is that they didn’t participate in a margin loan last year. (Bloomberg)

Although ESG investing hasn’t had a great year in terms of publicity, it remains important.  According to an industry survey, as many as 37% of asset managers took ESG performance metrics into account in determining employee compensation, with another 15% considering it.  The survey doesn’t say which metrics are used or how important they are, but since it’s up from a flat zero in 2021, it feels significant. (Institutional Investor)

The designation “most prolific spoofer” almost sounds like it might be a compliment, but when followed by “that the government has prosecuted to date” it certainly isn’t.  Gregg Smith, former chief gold trader at JPMorgan, has been sentenced to two years. (Mining Weekly)

It was noted back in April that although he was leaving his role as head of European equity syndicate, François-Olivier Mercier might still have a senior role at UBS and so it proves – like so many senior bankers, he’s going to work in the global family office team. (Financial News)

Ravi Kapoor is retiring as Citi’s head of banking, capital markets and advisory.  He reached retirement age last year but continued in the job at Citi’s request; he’s apparently “actively thinking about professional and entrepreneurial opportunities”, which might suggest that this is a move partly motivated by the upcoming reorganization. (Reuters)

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AUTHORDaniel Davies Insider Comment
  • Ly
    LymanZerga
    23 August 2023

    Pretty misleading title. Head of research =/= analyst. Analyst is lowest level

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