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Morning Coffee: When elitist aspiring bankers end up horribly in debt. Nomura gets nasty in equity derivatives

Cost of an MBA

Finance study group on Rio research outing

How much would you be willing to spend on an MBA that will propel you into a top bank? Tuition fees at banks’ favourite business schools are high – think £68k at London Business School ($104k) or $136k at Wharton. But tuition fees are only the start.

Bloomberg reports that opulent social events are becoming mandatory if you want to get ‘in’ with classmates on your top MBA programme. Students at the likes of Wharton and Harvard Business School are spending an additional £12k ($18k) a year on class-based outings to luxury destinations where they can hang out in swimwear and get to know each other’s back stories before they become rich and powerful. ““It’s investing in more than just knowing the names,” one second year HBS student declares.

Given that networking is widely seen as the main reason to do a big-name MBA as opposed to a far cheaper CFA Charter, this is a bit of a problem. It’s no longer enough to go to an elite business school – you need to penetrate the elites within the elite. And this requires even more money. Two years ago there were complaints that Harvard Business School was becoming dangerously classist and that a secret society of ultra-wealthy students known as ‘Section X’ was taking weekend party trips to Iceland and Moscow. Bloomberg’s report suggests this is still an issue, and not just at Harvard. “The mentality is that we’ll be rich eventually, so why not spend a ton of money now while we’re in debt,” one Wharton student declared.

Separately, Nomura has been trimming equity derivatives professionals in London. Financial News reports that at least five London-based traders and sales staff (Nikhil Reddy, Henry McWatters, Paul Keeble, Amar Makhija and Niels Verbeek) have left the bank. This departures come after Steve Ashley, Nomura’s co-head of global markets, said one of his “key deliveries” was the “rebuild of the equities franchise.” In this case that seems to have been a euphemism for clearing the decks and starting afresh.

Meanwhile:

UBS is accused of cutting associate bonuses to pay analysts. (Dealbreaker) 

J.P. Morgan’s new automated anti-money-laundering programme is causing upset internally. Opponents say quantity is being put before quality. (Reuters) 

Credit Suisse’s fourth quarter fixed income revenues rose by 7% versus an average decline of 25% on Wall Street. (BreakingViews) 

Credit Suisse shares rose 9% in the wake of its results. (Financial Times)  

Only people who actually want to be investment bankers, and who are not scared off by the industry’s evil reputation, are applying. (Bloomberg View) 

The pay discrepancy between M&A in banking and strategic advisory work in corporates is narrowing and junior M&A bankers are making the switch. (Financial News) 

Ken Moelis says the M&A deal cycle still has years to run. What I see going on around the world in M&A is an attempt to get every possible efficiency you can possibly get,” Moelis said. “This new cycle is about disinflation, deflation and cost-efficiency.” (Bloomberg) 

Data scientists, as rare as unicorns. (Guardian) 

People working at PWC are encouraged to send ‘e-cards’ praising each other. (WSJ) 

 

 

 

 

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