Morning Coffee: Deutsche Bank's great vegetarian revenue-generator. Off-cycle bonuses at Goldman Sachs
Chetankumar Shah is a survivor. Now in his 50s and having joined Deutsche Bank alongside Anshu Jain back when Jain says DB was "building its markets business" in the early 1990s, Shah has survived many DB colleagues, including Boz Weinstein, Colin Fan, John Pipilis, and Jain himself. Like Jain, Shah is a vegetarian. Also, like Jain, he has a legacy as one of Deutsche Bank's great revenue generators.
"Chetan has a multi-decade track record of very good risk management," Jain tells Bloomberg in article praising Shah's immense money-making abilities. Since Pipilis left in Deutsche in 2019, Shah has been the sole global head of the bank's financing and credit trading group, which generates around the one third of all the revenues in Deutsche's investment bank. He is described as "low-key" and "publicity shy" but he's also canny - Shah has been based in Singapore since 2005, where the top rate of income tax is the merest 22%.
This helps, because Deutsche has a habit of paying its big revenue generators very well indeed. It might also be why Chetan has stayed at Deutsche while many of his trading bros have left. At one point he may have been wavering: in 2008, Global Capital, said he might be moving to the Vision Fund where he could have gone barefoot with that other ex-DB credit type, Rajeev Misra; that didn't happen.
Evidently, it's not all Shah. In our own article on him in 2019, we said Shah had a team of around 100 people in Singapore alone. Deutsche's London office also has its own large team of credit traders, run by Manav Gupta under Gavin Colquhoun. Colquhoun also joined in the early 2000s and he too has a distressed debt specialism. London is also home to DB traders like Ardacan Celebi, a comparatively young index trader who was one of the bank's biggest earners a few years ago.
Working for Deutsche can have advantages, and not just in terms of earning large amounts of money in a country with an incredibly low rate of personal income tax. Deutsche allows its people to be “creative” said Colquhoun two years ago: “Just because it's illiquid doesn't mean it's bad risk,” he added...
Separately, there's further proof that Goldman Sachs is making amends for weak bonuses past.
Last year, Goldman cut $174m from the pay of its current and departed executives following the 1MDB scandal. Chief executive David Solomon had his 2020 pay cut to $17.5m, down from $27.5m one year earlier. President John Waldron had his pay cut from $24.5m to $18.5m.
Now, Goldman has decided to make amends. Even though it's not the end of the year and bonuses aren't usually awarded in October, the bank has sloshed an extra $30m in the direction of David Solomon and $20m in the direction of John Waldron. The new bonuses will only pay out at the end of five years, and only if performance targets are met. Goldman said they're intended to “ensure leadership continuity" in the context of “the rapidly increasing war for talent in the current environment.”
Waldron and Solomon will presumably now stick around, all the more so because their new bonuses will be worth even more ($50m and $35m) if they reach the top targets that have been set.
David Solomon has been saying Goldman Sachs staff need to be back in the office at the Milken Conference in LA. (New York Post)
London Stock Exchange says problems procuring, "some particular tech hardware type items,” are delaying its technology spending. (Bloomberg)
Morgan Stanley saved 50,000 human work hours and $10m in attorney fees by using robot Libor lawyers. (Bloomberg)
Blackstone has been bringing its own technologists into the deal room to conduct due diligence, vet underlying technology and identify opportunities where Blackstone itself can use the technology in the target firm. Technologists are even being used to source deals. (Business Insider)
How to get around Brexit rules. - One small London brokerage runs two instant messaging channels to handle trades for European clients: one is for daily interactions and another is for order requests which are then handed to colleagues in the EU. This may not be allowed in the future. (Financial News)
“People who worked in banking in the late 1980s will tell you that between Friday and Monday when the Berlin wall came down, people they thought were West Germans working on trading floors and in M&A departments just disappeared. They were actually working for [East Germany’s] Stasi, gathering information about the financial activity in the City of London. You can be sure the same thing is happening now with the Chinese.” (Financial Times)
Philip Lee, the new head at Citadel's Surveyor Capital unit has been laying people off. More than half-dozen portfolio managers and even more analysts have disappeared in the past six months. (Bloomberg)
Jeff Katz, the former global head of commodities at JPMorgan, is the latest person to join Millennium Management. (Bloomberg)
Revelations about Guy Hands of Terra Firma: he has a weird genetic aberration where he has no fingerprints; he has OCD and currently likes eating cheesecake; he has an addictive personality ("I’ve been addicted to work, probably to an unhealthy extent...I’m scared of ending my life having not achieved"); and he says people doing "traditional middle-class jobs" are happier than billionaires. (The Times)
When burnout manifests as excessive spending. “They’re buying things to feel whole. Those kinds of things get justified—$50 here, $100 there. You think, ‘I’m rewarding myself because I work so hard. I deserve this." (WSJ)
Star fund manager Terry Smith is locked in an acrimonious divorce battle with his wife 21 years his junior with whom he's been living in Mauritious. (Guardian)
Donald Trump's meme stock venture could be worth $8.2bn. (Bloomberg)
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