Morning Coffee: The man with the hardest job at Citi fired 20% of his team & is hiring a new one. Stop negotiating your base salary, start negotiating your bonus

Andy Sieg is an important guy at Citi. Hired personally by Citi CEO Jane Fraser, who drove to his home to persuade him onboard, he is tasked with growing Citi's wealth business. As of last November, he is also tasked with heading its US retail bank. Sieg is a man with broad shoulders. 

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He is also a man unafraid to fire people and to hire some new ones. In a profile of Sieg and of Citi's wealth business, Financial News notes that by his own admission at Citi's May's investor day, Sieg has fired 20% of people in Citi's wealth business since he arrived in late 2023. Various senior people have left, possibly of their own accords. But Sieg is busy hiring some new ones in.

For a man accused (and exonerated following an investigation from Citi's preferred law firm) by Citi MDs of harsh behaviour towards women on his team, Sieg has hired a lot of new women in. He has always denied the allegations, as has Fraser herself. Following the exits of women like Ida Liu (now at HSBC), Naz Vahid, Dina Saada and Julia Carreon from senior roles, Financial News notes that Sieg has hired the likes of Dawn Nordberg from Morgan Stanley to run integrated client solutions, Kate Moore from BlackRock as chief investment officer for Citi Wealth and Anne McCosker from Goldman Sachs as global head of lending. 

More hires are to come. As Sieg endeavours to achieve a target 20% return on tangible equity in its wealth unit (up from 7% last year and -2% when he arrived in 2023) and to grow revenues by 10%, the intention is to hire 100 private bankers and investment counsellors by 2028. James Holder, the head of Citi's private bank for the UK, Europe, Middle East and Africa, who tells FN that he interacts with Sieg most days, says the new hiring could be on his patch. The Middle East is a priority; continental Europe has potential. A headhunter tells FN that it's cheaper to hire in Europe, but that all this recruitment will cost Citi a lot of money.

Sieg will need to juice his newly refreshed team. Holder suggests Sieg's very good at this and says his "very direct and personal engagement with the business” is great. Sieg came from Merrill Lynch where the culture was "highly competitive, highly performance-driven," notes the headhunter. Sieg is instilling a bit of this sparkle at Citi. He's also reportedly focused on asset gathering, rather than revenues.

Good things are happening. FN notes that the return on equity in Citi's wealth business is now above the RoE in its markets business and that client assets rose 14% year-on-year in the second quarter (and, coincidentally, in many previous quarters). 

But people are still leaving. FN says global head of wealth financial planning Jonathan Peterson and Canada head of investments Dale Powell have departed of late. Peterson joined from JPMorgan in 2022.  Sieg's seat is not easy. Wells Fargo analyst Mike Mayo suggests his targets might be unattainable. “If Andy Sieg actually gets the financial targets that he has posted, you will have to change his name from Andy to Houdini,” he says. This will be an interesting transition.

Separately, if you are trying to get a quant job with an electronic trading firm or hedge fund and you are negotiating your salary, you are doing it wrong.

Substack YoungandCalculated notes that salaries are only 15% to 30% of what juniors typically earn. The rest is bonus. Salaries are typically between $150k and $250k for quant researchers and can be difficult to negotiate because they are controlled by HR. YoungandCalculated says guaranteed bonuses are controlled by hiring managers and can be "negotiated in an afternoon."

Meanwhile...

Apollo, Blackstone, Brookfield, BlackRock, Goldman and KKR are working on a $500bn funding package for AI infrastructure development with NVIDIA. (Financial Times) 

Hyperscalers already $1.5tn of lease commitments, of which about $1tn doesn’t appear in their financial statements because leases aren't stated until they're started. Once these contractual obligations come due, they will be considerable. (Financial Times) 

Private credit defaults are growing. So far, the bad loans are cropping up primarily in healthcare companies, like dental-service provider Affordable Care, or businesses affected by higher oil prices, including plastic-film maker Loparex. What if they spread to software companies, which make up 20% or more of the loans in many funds? (WSJ)

Mark Zuckerberg had long thoughts about AI: "We believe that delivering superintelligence to everyone is the way to answer this question. This follows the tradition of putting the power of supercomputers and the internet in everyone's pockets and on our desks. Rather than centralizing superintelligence, we should distribute it widely and give every person the ability to direct it." (Meta) 

Zuckerberg thinks there will be a larger number of companies with fewer people” employed at each firm" and that “People also continually come up with new ideas to make our lives better and new jobs to bring those ideas to life.” (Bloomberg)  

VARA, another hedge fund focused on AI investments, fell 44% in July. (Bloomberg) 

Hong Kong bankers at Goldman Sachs, Morgan Stanley and JPMorgan are working on the Shein IPO and it sounds complicated. Shein was valued at $100bn in 2022 but is now down to $30bn. US tariffs, shipping costs and competition from Temu have taken their toll, and Chinese investors are wary. (Financial Times) 

10 places are paying up to $100k a month for preferential access to the Tweets of Donald Trump on Truth Social. (WSJ) 

PWC usually ends its US internship with a multiday trip to Disney World. Not any more. (Business Insider) 

Citi hired Jean-Baptiste Charlet from Morgan Stanley to lead its French business. (Financial News) 

Women thrive in warm offices. (Atlantic) 

A Citi employee says she was laid off by telephone whilst on vacation. (IBTimes) 

LinkedIn quashes more than 200,000 AI-generated spam comments every day before they go live. It also correctly detects an estimated 94% of generic, or AI-generated, posts, and doesn't distribute them. (WSJ) 

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