Morning Coffee: HSBC bankers encounter painful side effect of working from home. Goldman Sachs and the unhealthy breakfast options
There’s a somewhat cynical industry proverb that nearly everything in investment banking is really about either parking spaces or seating plans. Bankers get attached to their offices and desks, and those who have reached the stage of having a private office – preferably a corner one with a lot of natural light – are understandably reluctant to give it up. In this context, the move to open plan at HSBC in Hong Kong is apparently causing “angst” among senior employees, and this might be an understatement.
The disappearance of private offices for senior bankers at HSBC in Hong Kong is linked to the bank's real estate rationalisation program, which in turn is linked to working from home. HSBC is being more accommodative than most when it comes to homeworking. The bank is looking for head office premises in London which are to be half the size of its current space in Canary Wharf, in order to save on real estate costs.
In doing so, however, it risks undermining the trappings of hierarchy. Giving someone a glorious title like Global Co-Head or Executive Vice-Chair is cheap, but most office buildings only have four corners per floor. Consequently, the reserved occupancy of a space with a door and two bits of plate glass at right angles to one another is an undeniable indication of someone at the top of the tree.
Bankers, who are often addicted to status symbols to an extent that many people would consider pathological, will compete for those corner offices. HSBC’s executives are apparently complaining that they deal with confidential client information, and so it’s a security risk to put them in an open-plan environment. This is a standard banker ploy to defend almost any perk, from first-class travel to private dining rooms, and can usually be safely ignored. After all, if the managing directors were really so overflowing with market sensitive information coming in from clients, to the extent that they couldn’t possibly step out to a glass-walled conference room, there wouldn’t be a cost-cutting program in the first place.
Elsewhere, it seems that there were a variety of breakfast options available for Goldman Sachs investors before the big strategy presentation. And in a strange way, the catering provides a useful metaphor for the strategic position of Goldman Sachs itself.
Because although the investors were offered organic beetroot juice shots, chia puddings and avocado toast, a lot of them went straight for the full fat “tater tots” (small fried has browns), fruit scones and old-fashioned conference room coffee. And similarly, although Goldman has been trying to present its investors with a healthy diet of retail financial services, tech platforms and capital-light third party business, it turns out that a lot of them prefer to hear about great big trading profits and investment banking deals.
During a slightly tetchy Q&A session, analysts like Mike Mayo asked CEO David Solomon why he didn’t “just close down” the retail banking business, making an analogy to basketball legend Michael Jordan’s undistinguished attempt at a baseball career. But a simpler analogy might be more accurate – you don’t go to Waffle House to order probiotic granola, and you shouldn’t go to Goldman Sachs expecting the CEO to deliver stable and low-risk revenues.
“The time without sunlight and in isolation made me lose my mind and become frightful (fearful?)”. Roger Ng, the former Goldman banker and 1MDB defendant, is arguing that spending six months on remand in a Malysian jail (and catching a horrible disease from rat urine) is enough punishment and he shouldn’t serve more time after being extradited to the USA. (Bloomberg)
Ever since Gisele Bundchen asked to be paid in euros, there’s been a market superstition that the beautiful people are a contrary indicator. One short seller has noticed that Kim Kardashian appears to be showing up as a serious player in the world of private equity, and is consequently placing bets on a crash. (Institutional Investor)
What goes around comes around, particularly in financial centres which can often feel like a very small village. Dan Daviau, David Kassie and Gillian Denham were the stars of CIBC in the 2000s – now they’re on opposite sides of a bidding war for brokerage Canaccord. (Bloomberg)
Reviewing some “former investment banker” claims, it appears that Grant Hasely, the CEO of a studio that has released a zombie shooting game with some NFT and cryptocurrency features, did have a reasonably long career in financial services. But 22 months as a securities lending analyst isn’t really what people usually understand by “former Goldman Sachs banker”. (Decrypt)
On the other hand, Sara Elise doesn’t seem to have a LinkedIn, so it’s impossible to assess how long she spent in banking before becoming a “chef, wellness coach, hospitality specialist and author” as well as a “pleasure doula”. (Interview Magazine)
And Hozefa Lokhandwala, the new co-CEO of VICE magazine has impeccable credentials – he was once an MD and the Head of Content & Entertainment Investment Banking at JPMorgan (New York Post)
Numerai LLC is a hedge fund which operates as a sort of DeFi pod shop – it sources investment ideas from freelance data analysts and pays for them in its own native cryptocurrency. Perhaps surprisingly, it’s got a sound performance record and is still attracting client inflows (Bloomberg)
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