Morning Coffee: 2,400 buy-side employees are wondering about their jobs this morning. The shaming of the most hubristic man in finance

France is in shock. BNP Paribas is acquiring Axa Investment Managers to create a new pan-European asset management firm with €1,500bn in assets under management and "powerful platforms of public and private assets." The deal, which bankers from JPMorgan and Zaoui are advising Axa on according to Les Echos, won't close until 2025, thereby Axa's 2,400 people ample months to contemplate their fates. 

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BNP Paribas seems excited about the acquisition and is declaring such things as "This major project, which would drive our growth over the long-term, would represent a powerful engine of growth for our Group."

However, as any long term observer of mergers in the financial services (or any) sector will know, one organization rare pays €5.1bn for another without having an eye on cutting costs and removing employee duplication. Some of that duplication will involve portfolio managers at BNP Paribas Cardif, the insurance business of BNP Paribas, who will now have their €160bn of assets managed by their new colleagues at Axa. It will also involve employees doing similar things in areas like technology and operations at both firms. 

This being France, cutting jobs is unlikely to be easy. Employee representatives are already being consulted on the merger, and union members have been demanding to know about the implications since early July, when rumours of the news first leaked. "Everything is explained," they said at the time, noting that senior staff were already being targeted in job cuts, that workstations had been pruned, budgets cut and "relaxation spaces" removed.

The next 12 months are likely to be less relaxing again. The last time that AXA IM made (nearly 100) job cuts it was 2023 and its business lines were divided into four key functions: investment, product and client strategy, core client group, and transversal services. "Transversal services" (AKA support functions) seems the most stressful place to be right now, but nowhere is likely to be immune. Employees are being urged to unionize. 

Elsewhere, the 40 employees at Pershing Square Capital Management in the US may not be inclined to form a union, but they can be forgiven for wondering whether their boss might have done things a bit differently. 

After the failure of Bill Ackman's shrinking dream of creating a new investment fund listed on the New York Stock Exchange worth $25bn and then $4bn and then nothing at all, people are considering where he went wrong. 

Was it the presumption that his anti-woke X following and intonations to 'join the posse' would play in the world of multi-billion asset raising? Was it the whiff of desperation in Ackman's entreaty that investors should come forward, "the sooner the better"? Or was it the fact that Ackman was trying to make investors pay more than the value of the assets pre-IPO for a closed end fund of the type that usually trades for less than the value of its assets, and which investors could probably pick up for a discount if they only waited a bit?

Liz Hoffman at Semafor (along with most thinking people) suggests it's probably the latter. She's got a chart showing how anomalous the failed IPO was compared to other closed end funds. Not only was Ackman's failed fund priced at a premium while most similar funds are priced at a discount, but it was intended to be massive: the average closed end funds manages $5bn or less. Ackman's intention was four times as big. That might equally apply to his ego.

Meanwhile... 

What to say in a Goldman Sachs interview when they ask if you have any issues with joining: "The only negative I can think of is that I'll never get that feeling again of competing against Goldman and winning."  (Business Insider) 

Brevan Howard now has 100 people in Abu Dhabi. They include portfolio managers, quantitative researchers and analysts, alongside 10 members of its crypto unit, Brevan Howard Digital. (Financial News) 

It's been a good year for equities traders, unless you're at SocGen whose shares initially fell 8.3% yesterday as a result of some ill-timed hedging decisions made a few years ago. (Bloomberg) 

Junior bankers are making JPMorgan adopt AI. “Many of them are on the forefront of how they’re going to help us to deploy AI in the jobs. This is the generation of people that has grown up with it, in a way that many others have not. So it’s very natural for them not to ask a question on Google search, but actually to use AI as their own assistant or analyst beside them.” (Bloomberg) 

Schroders might want ex-UBS chief executive Ralph Hamers for its CEO. (Bloomberg)

HSBC doesn't intend to increase bonuses this year. (Bloomberg) 

Noel Quinn says he has “no regrets whatsoever” about his time at HSBC. It had “been a joy” to lead the bank, as he presented the final earnings report under his leadership. “When I took over five years ago the numbers did not . . . do justice to HSBC’s heritage and strategic position.” (Financial Times)  

Private equity returned 1.46% in the first quarter compared with more than 10% for the S&P 500. (Bloomberg) 

Alex Beard, the former head of oil at Glencore, is accused of conspiring to make corrupt payments to benefit Glencore’s oil operations in West Africa. His number two is charged with something similar. (Bloomberg) 

Reasons to be bullish about Revolut. Nik Storonsky is taking a couple of hundred million dollars out at a high valuation and shouldn't be a rush - there will be time to grow the business in the future. (Rupak Ghose) 

The Goldman Sachs logo has gone back to 2002. It represents the bank's "heritage" and "culture of partnership" and takes inspiration from various past designs, including black-and-white crest from the 1970s. Does this mean that recent rebrands were a waste of money? (Creativebloq)

Female hedge fund manages are wearing this frilly shirt that merges staid office norms and fashion-forward aspirations. (WSJ) 

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