If you’re working 70 hour weeks in banking, you probably think it’s worth it. Like the Goldman Sachs interns who dreamed only of paying off their student debts and saving for a house, you probably think the sacrifice of almost all your waking hours is justified in light of the returns you’ll make if you stick with it. In financial terms alone, this might be so. – Bernstein Research suggests successful bankers in the front office earn a cumulative $1m by the age of 30 and a cumulative $2m by the age of 34. But what if you work yourself to exhaustion only to find that when you’ve made your money, hardly anyone thinks you deserve it?
This is the curse of those who do well in banking careers. A new study suggests that two thirds of the general public don’t believe that senior bankers deserve to be wealthy. Another 19% are ambivalent. Only 17% think senior bankers’ money is deserved. By comparison, most people think successful entrepreneurs, scientists and engineers merit their wealth, with 85% saying engineers are deserving.
The study in question is U.K. specific but similar results would likely be elicited in the U.S. where a recent poll suggested that only a third of the public view bankers positively.
Like it or not, the public mood has implications for anyone who works in banking, particularly as their career progresses. The more money you make, the greater your risk of being viewed as undeserving by a hostile public and the more likely you are to socialize with other people in the industry. As Dutch journalist Joris Luyendijk observed four years ago, this can be one of most limiting elements of working in finance: cut off from broader social networks, the job becomes an identity and you, “end up in a social bubble,” filled almost exclusively with other people from the industry.
Separately, you might think that summer internships and spring weeks/sophomore internships are the way to go if you want a top job in finance. But what if you’re doing it all wrong? What if you’re more likely to find your way into the industry by hanging out with senior financiers’ children? It worked for Jimmy Levin at Och Ziff.
Levin caused a stir in 2014 when it emerged that he earned $119m after making a successful bet on structured credit investments. Now he’s making a stir again after Bloomberg reported that the now 34 year-old Levin is being paid up to $280m as co-chief investment officer of the hedge fund. Levin got his break when aged (we estimate) around 19, he taught water skiing to Dan Och’s children at a Wisconsin summer camp. Admittedly, Levin didn’t join Och Ziff until seven years later, but he and the Ochs stayed in touch and that summer with the kids is thought to have been instrumental in Levin’s eventual admission.
Deutsche may shift $350bn from its UK balance sheet to Frankfurt for trading to go live in September 2018 with “back to front processes” and technology to be in place by June 2018. The project is called “bowline”, which is the name of a maritime knot used to hold the edge of a square sail into the wind that can be easily untied when not under load. (Bloomberg)
BofA’s chairman of M&A says U.S. deals are slowing. (Bloomberg)
Barclays wants to charge clients £350k for accessing its highest level of equity research. (Business Insider)
There might be something in the idea of Steve Cohen as a hedge fund coach. – Funds set up by his protégés are doing well this year. (Business Insider)
Trader accused of insider trading and making £720k over his career (not all illicitly), spent most of it. (Bloomberg)
British Labour party wants to restrict pay in senior ranks to 20 times that of the lowest paid employee. (New Statesman)
Why having an high IQ is not correlated to making good life decisions. (British Psychological Society Research Digest)
Vasectomy parties. (WSJ)