Morning Coffee: Top dealmaker identifies junior bankers' worst problem and it's not the hours. 20-hour-a-day hedge fund manager is back

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Steve Schwarzman, Don Draper, Mad Men, Blackstone, private equity, PE, alts, asset management, buy side, analysts, PE analysts, investment analysts, Blackstone analysts, Wall Street, hedge funds, Greg Coffey, The Wizard of Oz

The worst thing about working on the buy side is that you have to compete heavily to get into an elite hedge fund or private equity firm, and then once you're in, you must spend years and years working intensely – without making any mistakes.

Blackstone Group co-founder and CEO Steve Schwarzman offered advice to the asset management giant’s newly hired analysts, re-setting expectations for the ambitious recruits. Schwarzman told the starry-eyed group of incoming analysts that one of the biggest adjustments for them will be that, unlike in school, every number must be right.

“The way you become successful in finance is you start off at the bottom and you don’t make mistakes,” he said in remarks uploaded to YouTube.

Schwartzman warned newcomers against taking on more work than they can handle and then not letting supervisors know: “What they ultimately care about is that you fess up early enough so you don’t blow up the project, or blow them up.

“Unlike what you would think from watching television a business environment is like – where somehow you got winners, you got losers, you got to do bad stuff to squash other people so you can get ahead in some kind of a ‘Mad Men’ type of environment – it’s actually just the opposite,” Schwarzman said.

Landing an analyst position at Blackstone isn’t easy. In 2015, Schwarzman said the firm got more than 15,000 applications for 100 spots, or an acceptance rate of less than 0.7%, according to Bloomberg.

“It’s six times harder to get a job as an analyst at Blackstone than getting into Harvard, Yale or Stanford,” the billionaire said at the time.

Separately, the Wizard of Oz – the nickname of the man who the founder of Moore Capital, Louis Bacon, once described as “the most impressive trader I've ever seen” – is returning from the Land Down Under and getting back to work.

Greg Coffey, a star hedge fund manager who stepped away from the industry five years ago to spend more time with his wife and children, is considering a comeback, planning to launch a new fund with James Saltissi as soon as March, according to Business Insider.

Coffey worked at GLG Partners and Moore Capital, where he ran two emerging markets funds, specializing in big macro bets and near-constant trading. He earned the nickname the Wizard of Oz before retiring from the industry in 2012 at the age of 41 and moving back to his native Australia. He later backed Saltissi's fund, Abbeville Partners.

BI quoted a report that said Coffey’s investment performance at Moore “failed to live up to the stellar returns he delivered at rival manager GLG Partners, where he built his reputation and earned himself hundreds of millions of dollars by outperforming both the markets and other hedge funds in the heady bull market of 2005 to 2007.”

Meanwhile:

AI is invading every corner of Wall Street, and machine learning has already surpassed humans in its ability to produce insights from data – it will soon have a hand in 99% of investing. (Bloomberg)

Goldman Sachs has appointed Laurence Stein, its global head of the operations, as the new chief administrative officer as the bank considers new strategic locations for doing business. (Financial News)

Deutsche Bank received a subpoena earlier in the fall from U.S. special counsel Robert Mueller’s office related to the lender’s business with President Trump. (Reuters)

The impact of Brexit on London’s office market will be less and happen later than might have been feared, according to a property agency. (Financial News)

The European Commission said that E.U. banks and other firms that trade derivatives can continue to use U.S. trading platforms once new rules come into effect next month. (WSJ)

Next year, Spotify is expected to mount what is arguably the greatest challenge to the Wall Street IPO machine since Google went public in 2004 as Silicon Valley’s startup giants watch closely. (WSJ)

Depending on the definition of a hedge fund, the assets managed could range anywhere from $800bn to $3.6tn. (Winton)

A 49-year-old Wall Street private equity manager was killed by a tiger shark while diving with a group off of a Costa Rican island. (New York Post)

Allegations of men’s misbehavior have fueled a broader conversation about what is acceptable, due process generational differences. and how harsh punishment should be. (New York Times)

Female workers have been sent home in the past for not wearing high heels. Is that any different from asking men to wear ties – or, say, demanding that you go to work naked? (BBC)

Photo credit: Michael Yarish/AMC

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