Watching the game of musical chairs that followed this past bonus season, one thing became clear. Never have bankers collectively had more interest in ditching the sell-side for a job at a hedge fund.
Banker fervor over moving to the hedge fund industry is understandable – better pay and quality of life, to name two reasons – but know that job security is nowhere close to being guaranteed. More than 900 hedge funds closed their doors last year, despite plush market conditions. So where are the safest ponds in which to play? The ones that make the most noise.
A new survey found that institutional investors have a lot more love for activist hedge funds than the boards and management teams that they torture. A whopping 70% said they’re prepared to invest in activist funds this year, with nearly 80% agreeing that activist campaigns launched by the likes of Bill Ackman and Carl Icahn drive shareholder value. Nearly every one of the 65 institutional investing professionals who were polled said activist investing is likely to become even more popular than it is today, which is kind of a scary thought.
None of this comes as a surprise to corporations, which shutter at the thought of getting a letter from the Dan Loebs of the world. Many have recently begun hiring banks to proactively fend off potential attacks from rather demanding new investors. Synmantec is in the process of doing that right now.
So if you want job security, take a look at activist funds. Many have posted large double-digit returns over the last two years, and it appears fundraising won’t be a problem. Just know that, as an analyst, your calls will become very public, very fast. Just ask one of Ackman’s former analysts, Shane Dinneen.
When it comes to pay in management consulting, it’s the big three – McKinsey and Co., Bain & Co. and Boston Consulting Group – and then everyone else.
How can you determine, quickly, easily and with minimal sentiment that it’s time to move on? Banking headhunters volunteer six leading indicators.
A week after failing the Fed’s stress test, Citigroup is reeling a bit. The bank is expected to miss a key profitability target – one of CEO Michael Corbat’s key goals when he took over. Citi also announced it is closing one- third of its Korean branches and will pay $1.13 billion in penalties to settle mortgage securities claims.
Regulators on Wednesday adopted stricter leverage caps that will force banks to hold more capital. Less risk, but also less growth potential.
Jürgen Frick, the CEO of Liechtenstein-based Bank Frick & Co., was shot and killed in the parking garage of his own firm by former fund manager Jürgen Hermann, who made several unsuccessful attempts to sue Frick. Hermann likely committed suicide after the act, police say.
UBS hired 88 new financial advisors in Hong Kong alone last year. Swiss banks have been investing in their Asian wealth businesses following the crackdown on tax evasion in the U.S.
Russian bank VTB Capital laid off or relocated as many as 50 bankers in New York and London last week.
Buzz Around the Office
Quick journalism tip: When you’re conducting an interview, pick a better location than in front of an opening on a boat deck.
Quote of the Day: “I have had bosses, and bosses of my bosses, whose names we all know, who made little secret that they were here to punch their ticket. They mouthed serious regard for the mission of the commission, but their actions were tentative and fearful in many instances.” – Outgoing SEC official James Kidney talking about his former bosses…at his own retirement party