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Morning Coffee: Why banks don’t hand power to their precocious 26 year-olds. The most optimistic banker in the world

Arrogant youth

If you’re frustrated with your speed of progression through the ranks of an investment bank and you think you’d rather work for a technology firm where the hierarchy’s less rigid, there’s less bureaucracy and the products are more exciting, you might want to think again. Specifically, you might want to read Business Insider’s interesting portrait of what it’s really like to work for Snapchat and then have a long, hard, think about your preconceptions.

Snapchat, otherwise known as “Snap Inc”, is the tech firm of the movement. With an IPO of approximately $25bn planned, it’s big. After launching a pair of $130 “connected sunglasses”, it’s innovative. And with a 26 year-old founder at its helm, it’s weird. In fact, BI’s portrait of life at Snap under Evan Spiegel, the 26-year-old cofounder and CEO, illustrates precisely why banks make their exceptional 20-somethings go from analyst to associate to VP to managing director, rather than promoting very the best to MD from the outset.

Spiegel, for example, likes to keep himself aloof. We’re told that he travels in a “black Range Rover” with “a security detail.” That his office is “at the top of a flight of stairs” and is, “locked and protected by a special keypad.” That he’s obsessed with secrecy: forget regular town halls, forget feeling like you’re all working together for something, forget even knowing what’s really going on. “I definitely didn’t feel as if I was a valued part of the team,” says one Snapchat employee, who says he only learned what the company was doing by reading media headlines.

By comparison, senior bankers look distinctly accessible. Banks’ CEOs and senior MDs may not hot-desk, but they do at least mingle. Goldman’s Gary Cohn has a reputation for putting a leg up on employees desks while he chats to them. Citi’s Mike Corbat has done away with doors at Citi’s new New York office (“doors are friction”) and James Gorman at Morgan Stanley likes to have personal chats with the firm’s interns. 

While Snapchat doesn’t include some of banks’ more appealing features, it has – unfortunately – embraced some of their less attractive ones. For example, BI says a group of Snapchat employees arrived at their office one morning to find their keycards had been deactivated in the style of UBS in 2012.  It reports an obsession with the detail in Snapchat’s PowerPoint presentations that will sound familiar to anyone who’s ever compiled a pitchbook (“You literally would spend 50% of the time formatting it…What shade of yellow, that sort of thing.”). Most of the people who work there are upper-middle class (“Everyone came from a privileged lifestyle.”) And, like J.P. Morgan’s tech division, it tries to ban employees from saying what they do on social media.

More than anything else though, Snapchat is a one-man show, and that man is Spiegel. “Nothing happens without Evan’s stamp of approval,” says one former exec, “Nothing.”

Still want to quit banking to work there? Earlier this year, Snapchat set a goal of hiring 200 people in 60 days. It’s not clear whether that quota was filled or not. At least you’ll know what you’re getting into.

Separately, you’ll be hard-pushed to find a senior investment banker more ebullient than J.P. Morgan’s Viswas Raghavan. “The fluctuation in sterling and the relatively benign environment ahead of EU negotiations has provided the impetus for many clients to move now, ” the deputy chief executive for Emea and head of Emea banking at J.P. Morgan told Financial News excitedly.  “At the moment, market conditions are ripe for activity,” he went on (ripe!). “Clients want to take advantage of equity market conditions and we’ll see a strong IPO pipeline take us to year end. M&A activity is coming in and out of the UK. High yield activity has picked up significantly over last year and investor interest will continue.”

Financial News spoke to various other senior IBD professionals, none of whom were nearly so excited about the future as Raghavan. Yoël Zaoui, co-founder of advisory firm Zaoui & Co, was more representative of the mood. “This is a time of unusual political uncertainty, with key elections and fundamental changes in front of us, and of challenging growth outlook,” he declared, gloomily.

Meanwhile:

Goldman Sachs Group President Gary Cohn said the U.S. banking system was in the “best shape it has ever, ever been by far.” (Reuters) 

The European Central Bank gave Deutsche Bank special privileges in its stress test: Deutsche was allowed to log the $4bn proceeds from selling its stake in Hua Xia even though the deal had not been done by the end of 2015. It still hasn’t happened. (Financial Times) 

Ravi Raju, the Hong Kong-based Head of Deutsche Bank Wealth Management APAC , has successfully been poached by UBS. Various Deutsche bankers are expected to follow him. (FiNews)

Wissam Farah is the new London-based head of sales for Nomura. (Reuters) 

How to build a reputation as a fund manager and achieve a Silver Ferrari 488 whilst working from a business park outside Oxford. (Bloomberg) 

RBS executive named a spreadsheet detailing which companies were being squeezed for cash as, “The Blue Peter Cash Appeal” [Blue Peter being a UK children’s programme] (Buzzfeed) 

How to survive on the sell-side: “Especially now that the industry is shrinking, you need to be more visible than you ever have been. Find something you can put your name that people can learnt to associate with you. So that every time they see it, they think about you.” (WiLOW Wall Street)


Contact: sbutcher@efinancialcareers.com

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