Would you leave a senior trading job at J.P. Morgan in London for a freelance job with BNP Securities Services in Paris? Or a role as an associate with Moelis & Co. in London for a Portfolio management job in Copenhagen? Or a role in equities sales with a European bank in London for something similar in Amsterdam? If the answer is no and no and no, maybe you’re a little “closed.” People who’ve gone back think it’s great. To a point.
The Hung Nguyen stopped trading equities on J.P. Morgan’s central risk book last December. He’s now in Paris working as a freelance consultant for BNP Paribas Securities Services. It’s not London. It’s not a hedge fund (The Hung previously spent a year at Millennium and set up his own hedge fund, Arche Capital), but his family’s in France and he loves it there. “I was born in Paris and love Paris. London’s a great city, but my heart belongs in Paris,” he says.
Rasmus Iversen started out in M&A at Moelis & Co, in London. After four years he’s just returned to Copenhagen, where he’s got a role on the buy-side as an emerging markets equities portfolio manager at BankInvest, the Nordic Asset Management firm. He’s not the only one: as we’ve noted previously there’s a trend for young corporate financiers to leave London and land buy-side jobs in Europe. While recruiters say private equity funds in London are hiring less, PE funds in Germany are said to be crying out for talent.
It’s not just the opportunities and the proximity to family, though. Europeans who’ve gone home to work on the buy-side say it’s easier to get ahead and the work is more interesting. “The structure’s much less hierarchical here,” says one. “And there’s much more focus on content over form. – When you’re in a bank in London, it’s not enough to do a solid piece of analysis and arrive at the correct conclusion. You also need to make everything presentable and client friendly.” Is this down to the organization or the location? “Both,” he suggests.
The real issue with London though will always be cost – particularly post-procreation. One Dutch equities salesman who’s worked in the City and is now in Amsterdam, says European bankers struggle (like everyone else) to raise families in London. “You get paid more there, but once you factor in the cost of schooling, you end up being paid less. It doesn’t make any sense to stay.” Although Frankfurt has a reputation for long hours (a Goldman junior collapsed at 2.30am last December, for example) European cities are seen as less demanding. “London’s a great place to start your career, but it’s a city of extremes – you have all these talented people making huge sacrifices in their personal lives to get ahead,” says one young M&A banker who left the City for his home country. When you work 80 hour weeks in London, he says it’s hard to stay in touch with friends back home. At some point you need to make a choice. – Do you cut everyone loose and go for it in the City? Or go back to your family and friends? London’s too binary.
Of course, London has its upsides. Frankfurt may have great kindergartens but it’s seen as unutterably boring.”‘Frankfurt is like Marmite,” says one strategy consultant. “It’s great if you’ve got young kids, but it’s not so great if you’re used to eating out at a different Michelin starred restaurant every week.” In Amsterdam, bonuses are restricted to 20% of salaries. The Dutch have promised to lift this rule for any banks relocating there from London, but it doesn’t make much difference to individual bankers. “None of the really talented people want to come here because of this bonus thing,” says the equities salesman.
He adds that European financial centres’ popularity has waxed and waned in line with technology and trading structures. Banks that used to have satellite offices in Europe centralized them over the past decade in an attempt to cut costs. On the other hand, modern communications have made it easier for salespeople to be based outside the City: “You used to be in London for the ideas, but that doesn’t matter any more with modern communications.” However, he says the shift to cross-asset sales is encouraging centralization: when people are selling multiple products it makes sense to have them in one place.
One day that place could be Frankfurt. However, it won’t be Frankfurt any time soon. As Jamie Dimon pointed out in this week’s shareholder letter, jobs won’t move in the next two years. The strategy consultant, who’s working on banks’ relocation plans says all his clients are now implementing Brexit contingency arrangements, but that the sands are shifting slowly: “It’s about conducting relocation studies and then applying for licences and then standing up a business in the new location. Clients are preparing for the worst. – There’s a whole process going on that the public doesn’t see.” London bankers still have plenty of time to get to grips with Europe’s appeal.