Morning Coffee: Former Morgan Stanley banker says it’s better to be lucky than good. Everything’s great but nobody’s hiring

The frustrating thing about the kind of advice you get from old timers in the industry is that they are almost always describing a completely different world from the one that exists today.

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The generation of bankers who are currently writing their memoirs, like Scott Bok, the former CEO and chair of Greenhill before its acquisition by Mizuho, are the ones who started their careers in the 1980s. And so they tend to have stories of relationships formed on the golf course, lucrative privatisations, and falling into a bulge bracket bank practically by accident. 

For the generation who are now going through all-nighters, competitive internships and the fear of AI, it can be a bit frustrating to hear things like “If you’re among the first 25 or 30 investment bankers in Europe at Morgan Stanley, you’re going to have an awful lot of opportunity”. Bok joined Morgan Stanley when it was “desperate for new recruits” and he fancied a career change from law. He was working there for Robert Greenhill, and was one of the first employees of Greenhill’s eponymous boutique. As he says, “I always wanted to work at a firm that felt small and elite”, and the opportunity to do so seems to have come pretty easily.

But nonetheless, there is some useful wisdom to be gained from his story – it’s not possible to be one of the first couple of dozen M&A advisors in Europe any more, but the general fact remains that it is easier to make a successful career if you seek out opportunities in less crowded and competitive markets. Bok also has some more directly relevant advice for young bankers about how to manage the work stress that M&A boutiques are famous for.

And that advice is – understand that you have to look after yourself. He says that “People need to make their own smart choices in terms of not working in a place that’s going to work you to death” and that “When you read these stories of analysts being worked to the point where they literally are unhealthy — or in some cases worse than that — not only do the organisations need to avoid that, but you as an individual need to take charge and say, ‘If a place is going to work me like that, I’m going to work somewhere else.’”

Again, young bankers who actually have to negotiate these working cultures might object that it’s easier said than done, and that it’s easier to make this kind of statement as a veteran looking back on an incredibly successful career than as a junior trying to build one. But the truth is there nonetheless. The long-hours culture in banking is as much a creation of the employees as the bosses, and any time it’s been challenged, it’s proved to be much less fixed and unchangeable than one might have thought.   The big lesson from veterans like Scott Bok might be that you don’t get to the top by blindly following the conventional path.

Elsewhere, one maxim that’s good for any market conditions and all times in the banking industry is that actions speak louder than words. And big investment banks appear to be making lots of optimistic noises, while simultaneously telling managers to “resist” hiring and “focus on efficiency”.

Banks like JP Morgan and Goldman Sachs are continuing to make filings suggesting material layoffs; for the most part, these are related to the normal cycle of performance-driven exits rather than to economic conditions, but there’s not much evidence of replacement hiring other than the normal graduate intake. There are also some reorganisations, like the Barclays financial sponsors team in Los Angeles, which are reducing headcount. All of this is quite normal in itself, but headhunters are noticing that there don’t appear to be many similar strategic moves on the other side of the ledger.

So are the banks less genuinely optimistic than they seem? Possibly. Part of the story with respect to investment bank jobs appears to be competition from private credit, so there is some element of churn from the sell side to the buy side. And boutiques and European banks are still picking up top talent opportunistically. But uncertainty is still weighing on the market; when deal volumes pick up, employers seem more likely to work their existing headcount harder than to expand.

Meanwhile…

“You’re never as good as your best day and never as bad as your worst day”. Not so long ago, Schonfeld was looking like one of the worst cases ever of “multistrat growing pains”, as performance suffered and client money bled out. Ryan Tolkin, the CEO, came close to selling the business to Millennium and laid off 150 staff. But now it’s turned performance around. (Bloomberg)

If you’ve been laid off from a six-figure job, does it make sense to spend a five-figure sum on career coaching, social media promotion and resume building? That’s what one banker has already done. To some extent it makes sense, but it might be cheaper to have a personal network of clients and contacts. (WSJ)

An interesting move from the “look at what they do, not what they say” point of view – despite the bull market in India, Ajay Saraf, ICICI’s head of investment banking has made a lateral job move into the retail brokerage business. (Bloomberg)

It seems that what goes on at the Surf Lodge in the Hamptons stays there – staff are prepared to talk about the behaviour of their wealthy clients in general terms, but not to name any names or to give away any really juicy stories. (Business Insider)

There’s a new millionaire factory opening up in the desert, as sovereign wealth investors like Mubadala in the UAE have begun to pay carried interest to their staff as well as salary and bonuses.  The measures began as a way to compete with established private equity firms, but is increasingly seen as a way to tie talent in for the long term. (Bloomberg)

London bankers might have their Cotswolds break ruined by the United States Secret Service. (FT)

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