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Morning Coffee: How long before you earn £350k at a U.S. bank? Breaking the ‘emotional ego barrier’ at Bridgewater

How it is at Ray Dalio's Bridgewater

How it is at Ray Dalio's Bridgewater

In theory, it’s possible to earn £100k ($168k) a year plus bonuses after only two years working in corporate finance. After three years it’s theoretically possible to earn £280k – or at least this is what recruitment firm One Search claimed only three months ago. 

New figures suggest those numbers may be a little optimistic. Data from Emolument.com (the site where you can benchmark your own pay against other people’s) reported in the Telegraph suggests that average compensation for front office director-level (ie. mid-level) bankers in London is actually £350k at U.S. banks. At European banks, average compensation for directors is £275k. If you want to become a director in an investment bank, you’ll usually have to spend seven years plus working your way up the hierarchy. In other words, banks pay well – but don’t expect pay gratification immediately.

Separately, the Wall Street Journal was granted an interview with Ray Dalio, founder of Bridgewater Associates – the world’s largest hedge fund, with $160bn of AUM. Dalio’s ‘unusual’ management methods are already known following the publication of his 123 pages of life principles in 2010. His latest appearance in the Journal acts as a refresher. At Bridgewater, Dalio says that everyone is encouraged to voice their opinions and to say when something doesn’t make sense. This can be tough. – People don’t like criticism. It’s about breaking the “emotional ego barrier” and it’s good for business. Without criticism, “you can’t know what your weaknesses are, and [if you can’t] sort those things out, you’re not going to be successful,” Dalio proclaims.

Dalio also divulges that he sees everyone at Bridgewater as a ‘machine’ to be tweaked and refined. He reiterates his policy of taping everyone’s conversations (unless they’re personal) so that they can be subject to scrutiny (and criticism). Bridgewater is said to have a 30% staff turnover rate, but Dalio semi-refutes this. He says the first 18 months in a job at Bridgewater are tough (“It’s a bit like entering the Navy Seals”), but once you’ve got through them (“We call it getting to the other side…”) and broken the emotional ego barrier, it’s almost impossible to be happy working anywhere else.

Meanwhile:

Dougald Middleton, EY’s head of lead advisory, wants to hire another 24 partners for EY’s advisory business over the next three to four years. (Financial News) 

Citadel is building a swaps unit. (Bloomberg) 

Saudi Arabia is launching a sovereign wealth fund. It could be large, the Kingdom has $700bn of currency reserves. (Telegraph) 

Morgan Stanley has been cutting rates and FX traders in London, New York and Toronto. (Bloomberg)

Ed King, chairman of M&A at Barclays in Asia, has resigned. (Financial Times) 

Mike Powell, a former global head of markets at HSBC, has established an acquisition vehicle to buy and consolidate financial technology companies in the wealth, asset management and insurance sectors. (Financial News) 

Credit Suisse might be selling another stake in the electronic rates trading business it set up last year. (Bloomberg) 

Antony Leung, a director in UK investment banking at Credit Suisse, has joined Tesco’s strategy team. (Financial News) 

Secret millionaire who gives away hidden cash is coming to the UK. (Telegraph) 

Headhunter claims some clients will only recruit based upon star sign. (Evening Standard) 

Related articles:

Deutsche discloses troubles in trading. Blankfein answers tricky job interview question

Goldman adding bankers who work for nothing. Fund managers targeting the academically mediocre

The hottest boutique not in town. Deep in the mind of the shamed hedge fund manager

 

 

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