If you work in the front office of an investment bank, you may be in the wrong job. The future belongs to not to the salespeople and the traders, but to the technologists and the quants and the risk people - who are, increasingly, one and the same.
As memes go, the degradation of the front office isn't new - it's been around for at least as long as the financial crisis, but has been given added lustre by the recent spate of promotions at Goldman Sachs. First we had the ascension of Marty Chavez as CFO (active April), now we have the elevation of Elisha Wiesel as Chief Information Officer. Once upon a time, the key men at Goldman Sachs came from sales or trading backgrounds. Now, they come from the strats team.
Chavez started as a strat (short for strategist, but actually a kind of power-quant). So did Wiesel. Chavez burnished his credentials as CIO, while Wiesel burnished his credentials as chief risk officer in the division. By April, Chavez will be Goldman CFO and Wiesel will be replacing him as CIO. The two men will therefore occupy the most important jobs in a bank that considers itself a technology firm and is opening up its all-important risk system for clients to access directly. The message is this: if you start as a strat, you can do any of the most exciting roles in banking. If you start as a trader or M&A banker, you'll probably stay that way.
Separately, if you want to make your boss feel exorbitantly special you might want to copy one employee at Bridgewater, whose letter to CEO Ray Dalio truly warmed the latter's cockles.
Dalio felt moved to read the entire letter out during a two and a half hour telephone call with Business Insider's Henry Blodget. "I wanted to thank you personally so much for your generous support," it begins, "...I'm always at a loss of what to give back to you as you've given so much...While I'm sure you do not realize the extent of my gratitude to you, please know that I'm eternally grateful for you, all of your teachings and for this amazing company that I have been honored to be part of in the past 12 years, and I hope will be my home for the rest of my career... I love you, Ray."
As Vanity Fair points out, this is all very nice, but doesn't do much to assuage allegations that Dalio is running a cross between a cult and a hedge fund. Dalio didn't even seem that touched by the parting embrocation; "I get a lot of those," he told Blodget.
Why work for a bank when you could work for an electronic trading platform. (TradeNews)
Most of Bridgewater's employees aren't even involved in its investing activities. Now it is building a sophisticated computer system, not to analyze the markets, and not even to analyze people who analyze the markets, but to analyze people who don't analyze the markets. Somehow this makes it a massively successful hedge fund. (Bloomberg View)
Donald Trump fancies a Goldman banker for Undersecretary of Finance. (Bloomberg)
When a very British hedge fund's main fund declines 49% in value: “We are saying goodbye to some of our people. As always, we look to manage our costs.” (The Times)
Banks in London need to be part of the EU single market. (Sky News)
Helpful reminder: the stress of commuting in London during the Tube strike took hours off your life. (DNAInfo)
Can we cold towel that? (Financial Times)