Morning Coffee: JPMorgan banker's Morgan Stanley jump is a sign of the times. Hiring bankers amidst the cows
Marco Caggiano, the former co-head of North American M&A at JPMorgan didn't come from a banking family, but after 22 years in the industry he's had ample time to assess which jobs are best. They may not be the ones that come with the biggest titles, particularly in a market like this.
Caggiano, who grew up in Connecticut, had a father in graphic design and a mother in marketing. He attended law school and joined JPMorgan as an associate after a brief foray into a legal career. He'd been at JPMorgan ever since, and despite being promoted to lead the North American team three years ago, he's just quit. A different sort of job at Morgan Stanley seemed preferable.
Caggiano is off to become Morgan Stanley's vice chairman of M&A. For those outside banking, that sounds like an even bigger job. Those inside banking will know that being vice chairman isn't exactly what it seems: chairmen are primarily enormous schmoozers; they don't run teams but are external facing and spend their time meeting clients.
In the current market, where managing a team is an uphill struggle of motivating people through cost-cutting and minimal bonuses, escaping into a role that doesn't involve any of this is going to be appealing. Instead of negotiating with colleagues, Caggiano will now be free to put himself about with clients who've relied upon him in the past and may do again when things pick up. His deal roster includes advising Twitter on its sale to Elon Musk and Discovery on its merger with Warner Media.
As banks look for rainmakers to drum up deals in a dry market, the role of chairman is increasingly important. Deutsche Bank, for exampe, hired Samuel Kim from Morgan Stanley to be its chairman of APAC M&A last week, plus Ken Oliver Fritz as a vice chairman of M&A in Europe in April.
Can you return from a life of free-range schmoozing to a more managerial role? It happens. Philip Noblet, head of UK investment banking at Jefferies was formerly vice chairman of global banking at HSBC. Alec Ellison, global head of fintech at Houlihan Lokey, was previously vice chairman at Jefferies. For the most part, though, chairmen (and women) in banking remain like that: clients can be difficult, but they're far less challenging than a colleague who's threatening to resign unless he receives a guaranteed bonus.
Separately, John Langley also withdrew from the hassles of banking, but in a different way. Financial News reports that Langley made the decision to leave Barclays in 2017 and revert to his cow farming heritage. It wasn't long before he was building a cow empire, with his cattle multiplying from 12 to 120 in two years.
Then came the call to go back into banking. In 2019, Langley joined Wells Fargo as head of the corporate and investment bank in EMEA. He's since hired over 50 people, including Rob Ritchie from Goldman Sachs, Many were hired from the farm during the pandemic: “I’d go out at 6am, walk around the fields to check on the cows and get back to my desk by 7am and try to build a business,” he said,
Langley has just been promoted and will now run Wells Fargo's international business, split between New York, London and Asia. For a man who initially left banking because he was spending too much time on a plane, it seems a curious move. But maybe cows are more difficult than bankers or clients.
The banking addiction therapists are busy. “Asking for help is probably a little more acceptable in tech because of their focus on wellness, but Wall Street is more traditional, more ‘bust your ass and do what you need to do.’” (WSJ)
It's not easy being an equity researcher: spending on research has dropped 50 per cent since 2018. But without equity research, there are fewer reports on small companies and funds have less idea what they're investing in. (Financial Times)
Enthusiasm for ESG hiring has diminished after frenzied recruitment in 2021. “Candidates at the junior and mid-level range appear open to taking a small cut in compensation to secure an ESG role, as there aren’t many advertised on the market at present, encouraging them to sacrifice pay to secure the opportunity.” (Financial News)
16% of asset management firms could disappear because of market volatility, high interest rates and pressure on fees. (Financial Times)
The Federal Reserve wants Wall Street banks to start using a standardized approach for estimating credit, operational and trading risks, rather than relying on their own estimates. What would this mean for model risk jobs? (Bloomberg)
Hedge funds need analysts who can help them understand what's happening in China. (SCMP)
Hedge fund manager Phillippe Jabre now owns the family brewer and brasserie in Beirut. “Life doesn’t stop. It just continues under a different hat.” (Financial Times)
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