In July last year, after more than 22 years in investment banking, Deutsche Bank’s global head of equity trading, Andre Crawford Brunt, decided it was time to get “intellectually honest” with himself. This meant leaving the industry.
Crawford Brunt started out as an open outcry trader at Deutsche Bank in South Africa 1994, and has since spent his entire career at the bank in senior roles across London and New York. Over the years, he managed to survive and thrive in a sector of investment banking that has become almost entirely electronic. He has, he admits, “been blessed with a long and fruitful career”.
“But If I was intellectually honest with myself, the challenge was no longer there. Banks were being disrupted and were, in my view, far more likely to defend the status quo than ‘drain the swamp’,” he says.
Investment banks’ equities desks in particular have been decimated over the past few years. Goldman Sachs said earlier this year that it had 600 equities traders in 2000, and now has two people supported by a team of programmers. Even this year, banks are still chipping away at their equities teams – Deutsche Bank said in February it was cutting another 17% of its equities staff globally. Electronification of equities is not the only issue, however, says Crawford Brunt.
“Banks are under huge pressure in their equities business – the starting cost bases are too high, technology continues to compress commissions, equity research is being democratized, there’s less capital commitment and banks proprietary businesses have been closed,” he says.
“Add in a complex regulatory environment and a proliferation of new players and it’s increasingly difficult. The real challenge is an exercise in cost reduction and efficiency, which flies in the face of any ambitious banker whose mantra would be investment, growth and building a power base,” he adds.
Crawford Brunt has been lucky, he says, to live through one of the most interesting times in investment banking. But banking careers are not what they were. Investment banking is no longer at the forefront of innovation, and high-ranking financiers hanging on to the glory days should think about doing something more dynamic, he says.
“Without being disingenuous, there are some very average people – of which I would class myself as one – working in the financial sector who have done very well thanks to a rising tide and being in the right place at the right time,” he says. “Being able to apply what you’ve learned in the wider world without the corporate safety net is a scary prospect for a lot of people. So, while a lot of senior bankers want to move, not all of them can or do.”
Crawford Brunt now simply describes himself as an ‘investor’. He’s committing personal capital to projects and companies that he believes are likely to change the status quo. Some of this is technology – he pumped $2.9m into a New Zealand-based tech start-up MyWave, for example – but he says he’s just looking for “investments that interest me”.
“I’m now pursuing investments that interest me, sometimes just committing capital or offering advice where I can,” he says. “The worst thing that can happen is that I’ll write a cheque, meet some interesting people and lose my money. If it goes well, I learn a lot, end up making significant returns and hopefully make a positive impact on the world as well as having some fun.”
Crawford Brunt is a board member of a South African firm that tests embryos for genetic abnormalities, called Genesis Genetics. He’s also chair of an Oxford University-based spinout focused on the blood diagnostics sector (“or, as I call it, the Theranos that works”) and has funded Deep Science Ventures – a programme that brings together scientists, experts and investors to get new science-based ventures off the ground.
If this seems a far cry away from the trading floor, he tells us that investment banking has helped open up doors for potential investments.
“Being in investment banking over the last two decades has enabled me to travel, meet some very dynamic and interesting people around the world, some of whom I have ended up investing in,” he says.
Crawford Brunt says that the idea of sticking around in a senior high-paying investment banking job now is a missed opportunity.
“For me, working in investment banking and earning 10% less every year was not a motivating prospect,” he says. “Right now, it’s the easiest period to get a business off the ground – capital, both financial and intellectual, is abundant and technology continues to impact and disrupt many businesses, it’s an exciting time to get involved.”