Morning Coffee: Inside the lifestyle of the world’s most feral macro strategist. Morgan Stanley’s Andy Saperstein has cancer
“Vegetables are kind of a scam”. When someone – in this case Nomura cross-asset strategist Charlie McElligot – says something like that to FT Alphaville, you have a choice of two reactions. You can smile politely and move slowly toward the door, or you can stick around to see what other crazy ideas they might come up with.
People are likely to have similar reactions to McElligott’s style with email messages – a riot of sentence fragments, highlighting and coloured fonts with seemingly no editing of any kind. But this is actually a good thing. An important insight into how sell-side careers are made is to realise that people who like you can give you a lot of business, but people who don’t like you can’t give you less than zero.
Consequently, it’s a lot more profitable to be the number one favourite for 10% of the client base than somewhere in the top dozen for 90%. And furthermore, it’s an attention economy – if you can set the tone for what the market is talking about, then even people who don’t agree with you have to listen.
McElligott is also a good example of the other great truth about building a career – the industry moves in cycles. As he says, at the start of his career, “you either covered the whale-type accounts — the big mutual funds — or capital on the West Coast or whatever it was . . . no one really cared about macro funds or credit crossover funds or systematic quant funds at that at that time”. So it was a great period in which to build up a knowledge base about option volatility, trend-following and all the short-term trading factors which ended up as the basis of his franchise today.
It's not exactly the easy way to riches, though. McElligott's lifestyle is extreme. In order to stay on top of the news and be at the top of his audience’s inbox, McElligott apparently wakes up at 1:30 am (except on rare quiet days in the market, when he awards himself a lie-in until 3am). He mainly works from home in New Jersey (commuting is “for the birds”), although with three children under the age of 11 that might not be a wholly relaxing environment. And he doesn’t have much time to read anything except his three main information sources – the data, his colleagues and his clients.
That is, unfortunately, the kind of work ethic you need to reach the top on the modern sell side, and it’s fairly notoriously not good for long term health. McElligott attempts to maintain an “anti-inflammatory philosophy”, which involves only eating meat and animal fats, taking infrared saunas and ice baths, and popping about 30 different kinds of vitamins and supplements a day.
He takes two weeks off a year with “a no-devices” policy (which itself sounds like it might be a bit stressful for someone who’s constantly wondering about market crashes on a two-day time horizon). It’s not a lifestyle that one could recommend to many, but as the saying goes, you don’t find many reasonable people on the tops of tall mountains. Charlie McElligott knows that it’s not sustainable in the long run, but says he’ll be “kind of sad” when the market calms down and his high-intensity approach goes out of fashion once more.
Elsewhere, Andy Saperstein of Morgan Stanley has announced that, only a couple of weeks after losing out on the CEO succession, he’s been diagnosed with cancer. However, he says “I’m young and in otherwise good health”, which gives him confidence as he starts treatment. Like several other prominent bankers who have been in this situation in the last few years, his intention is to keep working as normal, but to cut down on travel.
The examples of Jamie Dimon, Lloyd Blankfein and CS Venkatahrishnan show that this is a viable strategy; indeed, it’s more or less the normal thing to do. Saperstein has kept his privacy about what specific kind of cancer he has, but he sounds optimistic and it’s more likely than not that he will be back on his favourite roller coaster rides before too long. The best of luck to him.
In a world where nearly every banker is worried about their employment security, it’s worth remembering that it’s only ever nearly everyone who is at risk. At present, convertibles bankers find that they’ve got plenty of options, as companies are anticipated to make much more use of this market for the next run of debt maturities. (Bloomberg)
Similarly, nobody is looking to get rid of Middle East specialists; while other country heads at Citi are getting de-layered in numbers, Carmen Haddad has been given a vice-chairman role to go along with her responsibilities for banking and wealth management in Saudi Arabia. (Bloomberg)
If you don’t ask, you don’t get – Alex Gerko of XTX has made an open offer to anyone in the “top 1%” of researchers at OpenAI to quit tech and become a quant market maker. As he puts it, “Very interesting problems, best research infrastructure, best compensation, zero risk of accidentally killing all humanity” (Financial News)
Changpeng Zhao of Binance has pleaded guilty to money laundering charges and will step down from his CEO post as part of a $4bn settlement. The sentencing guidelines for his plea go up to eighteen months. (FT)
Rajeev Misra is back in the game. The former Deutsche Bank and Softbank trader has $6.8bn under management at his new vehicle OneIM and is looking to increase that to $10bn with a second close. The firm currently employs 30 people and wants to add another 20. Given its focus on structured credit trading, it would be likely to be looking at a lot of Deutsche alumni even if it wasn’t for the founder’s pedigree. (Bloomberg)
Standard Chartered is still hiring in its markets businesses, and not just in its home turf in Asia. It’s keen to add clients in Europe and America, particularly in credit trading. (Euromoney)
Former Goldman partner and BDT&MSD Partners founder Byron Trott is donating money to fund outreach by elite universities to small rural towns like the one he grew up in, pointing out that this is a kind of diversity that isn’t always covered by typical programs. (Bloomberg)
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