Morning Coffee: Being a 23 year old banker in Paris is a nightmare. Ultimate ex-Goldman Sachs banker announces new job in fleece vest

When Centerview Partners hired Matthieu Pigasse in 2020, they really started something.  The former Lazard France CEO (plus two other senior Lazard bankers) was given the task of building a French franchise for the US super-boutique, and he duly did so. Several other American firms decided that they needed to be in the same game, and also opened Paris offices.  Five years later, over 150 senior banking hires have been made.

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So it’s a banker’s paradise? Well … not exactly.  The extraordinary competitive hiring carousel that Centerview, Evercore, PJT and Moelis has certainly helped to push up salaries for the elite, and anyone with a good client franchise at one of the incumbents like Lazard and Rothschild will be happy to know that they have a strong alternative offer if they feel unloved.  But in order to get to that level, you have to serve your apprenticeship. 

And French banking apprenticeships are really quite hard.  Incoming first year analysts are usually expected to have done as much as 12 months of off-cycle internships, the hours are “brutal … at least as bad as London/NY” and there is, euphemistically “a lot of old-school behaviour”.  French investment banks tend to be quite hierarchical, to the extent that the Managing Director on a deal might not even know the names of the Associates.  The only silver lining is that since the banks in France recruit almost exclusively from elite French universities with an even more horrific reputation for overwork and hierarchy, it might not feel so bad.

The problem is that even before the American invasion, France had a lot of banks chasing a limited pool of clients.  There are a few such over-supplied markets in the global banking industry (Australian equities trading is another famous example), and the effects of competition are quite striking.  Price competition is part of the story – French M&A bankers try not to compete on fees, but they always end up doing so, with the result that revenues there are lower than in other financial centres. So you are working for less money.

And the other part of the story is non-price competition.  Apart from price, the only way to differentiate yourself is to show the client how much work you have made your juniors do for them.  French bankers tell stories of “30 hours in two days”, working across origination and execution.  They tend to view London and even New York as “the second division”.

So before you become a local rock star, you might have to go through some hard times. And there isn’t even all that much of a private equity industry locally to bail out to.  So we wish all the young people joining this harsh but potentially lucrative corner of the industry a hearty courage mes braves, and remember not to call the Head of M&A “tu”.

Separately, former Goldman Sachs banker and TCI hedge fund manager (and former British Prime Minister and current MP for Richmond) Rishi is back in the game – he’s going to be a “senior advisor”, once more at Goldman.  

Sunak has to back purely for the love of banking – he can’t possibly need the money, and he in fact doesn’t, as he’s donating his salary to charity.  Or possibly there’s a clue in his latest social media video, where the WSJ notes that he's standing in a field in his constituency, wearing a fleece vest and saying how great it is that they’ve added another lane to the local bypass. That feels like it might be the sort of thing that starts you wondering what you’re doing with your life. 

Meanwhile...

Bailing out client losses is usually one of the ultimate taboos of the brokerage industry, but the forex losses on the US dollar associated with the “Liberation Day” tariffs were so huge that they’ve raised awkward questions about suitability and advice, which UBS has decided to make 100 “goodwill” payments rather than spend time thinking about. (FT)

Anyone thinking of heading to “Wall Street South” might want to bear in mind that thanks to a recent bill heavily supported by Citadel’s Ken Griffin, Florida is now one of the most non-compete-friendly states in the USA, with up to four years enforceable. (Bloomberg)

RIP, on-cycle private equity recruiting? No big PE firm launched a process in June this year. Although there are other reasons why they might have been content to wait and see before adding headcount, lots of people predicted that Jamie Dimon would be the one to back down, so it’s interesting to see where the balance of power really lies. (FT)

Slowly, JPMorgan is beginning to solve its “back to office, not enough desks” problem, although this has meant having to rent a bigger building in Amsterdam. (Bloomberg)

“There’s no VIP dining room, there’s no new marble. There are no special elevators … There are no new water features, there’s no beehives, and there’s no roof terrace gardens”. Fed Chair Jay Powell is trying to downplay a building renovation in the face of criticism. (NY Post)

ESG is out of favour in the USA, but still flavour of the month in Europe, and this is beginning to cause trouble in the usually boring world of drafting global bodies’ public statements. (Bloomberg)

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