Morning Coffee: The US private equity firm hiring $400k bankers in London. Junior finance professionals crippled by uncertainty
When it emerged in March that Blackstone was expanding in Europe and opening a new office in London, we suggested that it looked like exciting news for all the young Goldman Sachs and JPMorgan bankers that the private equity firm likes to hire. Seven months later, it seems Blackstone's hiring might encompass people at BoA, Citi, Morgan Stanley, Deutsche Bank and maybe even Commerzbank too.
After hiring 200 in Europe between 2020 and March 2022, and with 500 people in London currently, Blackstone announced on Friday that its new office in London's Berkeley Square will have 1,800 "seats." The implication is that London headcount could more than triple once construction of the new purpose-built European headquarters is finished in 2028. Blackstone paid its 339 non-partner staff in the UK an average of £371k ($411k) for the year ending March 2021; partners received £1.8m each.
Blackstone's enthusiasm for the UK also comes as CEO Steve Schwarzman has been shopping for his own personal piece of England, in the form of Conholt Park, a 2,500 acre estate in Wiltshire. It coincides with the pound having a hard time in the wake of the new British government's fiscal fervour, a move which the Financial Times says has been dissuading some private equity investors from increasing their exposure to the UK given the "scary" situation of the economy and the potential for runaway inflation and an unusually long recession.
Schwarzman, it seems, may not be troubled by this and may see sterling's weakness is a buying opportunity. In recent months, Blackstone has been busy hiring at all levels in the UK, with recruits including Gabrielle Dale, who joined as an MD in infrastructure investing from Macquarie, Thomas Honig, a principal from Deutsche Bank's infrastructure team, and Anders Ersbak Bang Nielsen, a former managing director in Goldman Sachs' investment strategy group. The firm is also running its graduate program in the UK and is busy looking for students as we speak. It's not all about London, though: Blackstone is also hedging its exposure to Europe and has been busy recruiting across Dublin, Luxembourg, Frankfurt and Paris too.
Separately, Business Insider has another warning for young bankers who thought the gravy train of the past few years would continue forever. It won't. Junior investors are like a "deer in the headlights", Mary Callahan Erdoes, CEO of JPMorgan asset and wealth management, said at a conference last week. They've never seen a bear market and the world is transforming into one of high volatility, high inflation and lower globalization.
Coupled with the fact that M&A and investment banking fees have collapsed and that banks are getting twitchy about costs, Business Insider says this signifies the end of the summer months for young people in finance and that they don't know what to do about it. However, at the end of an unprecedentedly long bull market, most mid-ranking and senior people don't know what to do either. In the long term, juniors who burnish their credentials in this market, and who survive, will be among the best-placed to help future generations navigate what's next.
Meanwhile...
“Blackstone backs firms that supports tens of thousands of British jobs and I am confident that our growth plans will ensure we become an even greater country in which to invest and do business,” declared UK prime minister Liz Truss. (Bloomberg)
Banks including Bank of America, Barclays Plc and Mitsubishi UFJ Financial Group, faces losses of $500m on their financing of the Twitter deal. (Bloomberg)
Credit Suisse is becoming more and more like Deutsche Bank. Its recent offer to buyback some of its stock echoes Deutsche's offer to do the same in early 2016, when DB bought back over $5.4bn. It only soothed worries about DB liquidity for a month. (Bloomberg)
Dealmaking fees at Credit Suisse fell 60% in the first nine months of this year, more than at any other bank. (Financial News)
McKinsey & Co has hosted some riotous all-hands meetings and exiting consultants have sent spiky emails copying everyone in. One such email said McKinsey is an “amoral institution”, because it advised coal companies “directly responsible for putting us on the incomprehensible fast-track to planetary omnicide”. (Financial Times)
A Coinbase engineer was involved in trying to stop last Friday's knife attack near Liverpool Street. "He got on his bike. I kicked the wheel before he could get going to, you know, stop him from escaping." (Financial News)
Quiet quitting is a Gen Z phenomenon. 'The idea of caring is no longer considered cool, and a dangerous combination of laziness and entitlement has left Gen Z wholly unprepared for work.' (WSJ)
If there's a long gap between signing a contract and starting a job, you might be able to negotiate a salary increase. Look for competitors to the firm you're joining and point out their salary increases. (WSJ)
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