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Morning Coffee: The world’s biggest hedge fund is shrinking. How to make the most of the easiest route into Goldman Sachs

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Even dark, foreboding clouds often have a silver lining.

In an extremely rare occurrence, the largest hedge fund in the world – with more than $150bn under management – sent a letter to investors letting them know that it will be laying off a lot of people.

The client-directed missive signed by all of Bridgewater Associates’ senior executives, including founder Ray Dalio, provides context for the planned job cuts. Back in 2003, Bridgewater had just 150 employees; in 2011, it had grown to 1,100; the firm currently has 1,700 people working there. The note reveals that about 70% of that meteoric headcount growth was in non-investment areas, which the letter admitted “became bloated, inefficient, and bureaucratic.”

The following are the key passages: “…we will be conducting a renovation to improve efficiencies at Bridgewater, especially in the non-investment areas such as Technology, Recruiting, Facilities, and Management Services….

“To be clear, this renovation is coming at a time when our fundamentals are very strong: Our investment process is better than ever, our financial position is rock solid, our key employees who built the firm wouldn’t want to work anywhere else, and our clients remain confident in us (as expressed in their collectively investing $22.5 billion in new money since 2015).  We are making these changes as a part of the ongoing process of constant improvement that has been the key to our success over the past 40 years.”

So, nothing to see here, and nothing to worry about…if you’re an investor. But what if you work in one of Bridewater’s “non-investment areas”? That’s another story, and it may be time to polish up your resume, which – looking at the bright side – should look pretty impressive to other potential employers given that it has Bridgewater featured prominently on it.

Separately, if you’d like to be an investment banking summer analyst at Goldman Sachs next year, it can’t hurt to start preparing now. Yes, it is that competitive, so you should apply as soon as possible.

Helpfully, Bloomberg has provided students with a cheat sheet to help them ace the interview process (assuming they make the initial cut and actually get a call to set up an initial video interview). In case you’re wondering, these tips have come from HR.

  • Do be authentic. “There is a difference between being prepared and being rehearsed.”
  • Do show long-term interest. If it’s evident someone is “looking to use Goldman as a vehicle to go elsewhere … that’s probably a candidate we would pass on.”
  • Don’t get trapped inside “I.” “Having a good example of how you approach things in team dynamics is important.”

Meanwhile:

Pimco accused former star bond fund manager Bill Gross of leaking confidential bonus data and exercising “bad faith” in pursuing a $200m lawsuit over his sudden departure from the firm, part of his “sad obsession” with attacking the firm he co-founded. (Reuters)

Greenhill is adding 10-15 managing directors. This is a 15-22% increase in the senior ranks. (Business Insider)

Larry Fink on his $100m in failed mortgage trades: “I screwed up. And it was bad.” (NYT)

Massachusetts Senator Elizabeth Warren is making a new push to investigate—and potentially jail—more than two dozen individuals and corporations linked to the roots of the 2008 financial crisis. (Bloomberg)

At the highest levels of government, the financial industry managed to convince prosecutors that it was against societal interests to bust bankers. (Bloomberg)

Former U.S. Treasury Secretary Lawrence Summers believes that big Wall Street banks are no safer today than they were before the 2008 financial crisis, despite a raft of new rules aimed at safeguarding the system. (WSJ)

Here’s a recap of the 27 scariest moments of the financial crisis. (Business Insider)

Credit Suisse has hired an experienced UBS banker to bolster the ultra-high-net-worth teams in its international wealth management division. (finews.com)

John Cryan’s options as he looks to restructure Deutsche Bank (FT)

Products synonymous with the credit crisis like “collateralized debt obligations” and “synthetic securitization” are returning as investors take on more risk while banks are forced by regulators to reduce it. (Bloomberg)

European Commission president Jean-Claude Juncker has criticized his predecessor José Manuel Barroso for taking a job at Goldman Sachs. (FT)

The uproar over Barroso’s career choice is a sad reminder that the financial industry still hasn’t shed the stigma resulting from its culpability in the financial crisis almost a decade ago. (Bloomberg)

Germany’s oldest bank has hired nearly a dozen new staff across its equity research, sales and trading teams in London. (Financial News)

Arguing that leaving the E.U. gives the City an opportunity to turn itself into “super-duper Singapore,” Leave campaigners said Brexit could free the U.K. from European regulatory burdens such as bonus caps. (Financial News)

Eight years after Lehman Brothers’ collapse, the performance of European banks has been dire. (Bloomberg)

There’s a reason investment bankers specializing in biotech and biopharma M&A are optimistic. (Bloomberg)

Is the bond bubble bursting? (WSJ)

Here’s how the U.K. can remain a hub for foreign banks. (BBA)

One-third of British workers believe that colleagues who receive bonuses do not deserve the additional payouts. (Telegraph)

Goldman Sachs filed a patent for blockchain-based Forex trading. (NewsBTC)

People think they are middle-class, whether they make $22k or $200k. (Bloomberg)

15 books GSElevator says you must read if you want to work on Wall Street. (Business Insider)

Photo credit: PanKc/GettyImages

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