Morning Coffee – The disgruntled hedge fund employee who’s got their former bosses rattled. Asian bankers have to learn a new game.
Apparently there is a “memo” going round making all sorts of allegations about Tiger Global, the hedge fund and major startup investor. Nobody wants to be specific about the contents (unsurprisingly – it’s anonymous, uncheckable and has been denied by a big rich firm with lots of lawyers), but they’re apparently quite incendiary and relate to accusations of all sorts of things, both professional and interpersonal.
Of course, the fact that nobody in the media wants to touch this memo is only small comfort for Tiger – it’s been forwarded around so much that it’s quite probably already been seen by anyone whose reading it might cause the firm damage. In fact, Tiger has ended up having to send out its own round-robin letter talking about “a series of information attacks” from an “anonymous coward” which are “packed with lies”.
Extremely interestingly, though, the suggestion appears to be that these allegations were “written and pushed by a disgruntled former employee with whom we parted ways”. This is described by one fund manager as “a new form of meme warfare that every fund should be petrified of”, but it really isn’t all that new at all. Washing the company’s dirty linen in public is a time-honoured form of revenge in the financial sector. Long before the invention of encrypted anonymous messaging apps, dull afternoons on the trading floor would occasionally be enlivened by the receipt of an anonymous diatribe over the fax machine or through the post.
The trouble is that they usually don’t turn out to be particularly accurate. If someone really has the goods on a former employer who they believe to have done them wrong, they go to a good lawyer and to the extremely lucrative whistleblower programs of the various regulatory agencies. If for some reason this isn’t an option (most usually, because they were involved in the misdeeds themselves), they can usually get a reputable publication or an investigative journalist on board. This doesn’t seem to have happened with the Tiger memo though – some versions of it appear to suggest it’s been prepared as a story for the New Yorker, but the magazine denies this.
Informal blast-mail dissemination of a dossier like this is usually a sign that it’s second- or third-hand gossip, compiled by someone who erroneously thought that “knowing where all the bodies are buried” would make them invulnerable to redundancy. Tiger has certainly had some quite public troubles, so it wouldn’t be all that difficult for someone with a bit of familiarity with the company to put together a compendium of the worst of those with the last five years of rumours.
So it’s probably not worth using any favours you have in the bank with allocators and investors to get a look at the memo; anything that’s worth knowing will come out soon enough in better venues. The real danger from things like this is the possibility for investors to worry not so much about the allegations themselves as about other investors’ response to them. That’s why Tiger’s investor relations people have got on the front foot with their responses.
Elsewhere, in most banks if you were to tell your compliance officer that you were going to spend the evening playing cards with some local government officials, they might spontaneously combust on the spot. In China, things are a bit different though – the new card game craze is called “guandan”, it isn’t usually played for money and it appears to have the approval of the CCP as a form of recreation for bankers that doesn’t involve excessive public consumption.
Being able to play a reasonable hand of guandan (which seems to be a sort of hybrid of poker and bridge) has become a necessity for some investment bankers and venture capitalists, as US sanctions on semiconductor investment have combined with a series of domestic regulatory curbs on private capital, leaving the local politicians who play it as one of the most important remaining investor bases. Apparently, “from observing someone's playing style, you can tell if he is smart, aggressive or a team player”, although it’s likely that what you mainly observe will be whether they’re prepared to invest several hours of time in building a relationship.
Meanwhile …
A quick-thinking rare wine dealer managed to get into the bankruptcy auction to pick up the private cellars of Silicon Valley Bank, and now has an excellent story and provenance to add value to what are apparently independently some pretty good bottles. (WSJ)
Possibly demonstrating that the name is still worth something – it’s more than a decade since Jan Sramek was a twentysomething trading prodigy at Goldman Sachs. He’s founded at least two other businesses and made a fortune in tech investment, but in stories about his latest venture building a literal city in California alongside Sequoia’s Michael Moritz and other tech names, he’s still described as a “former GS trader” (Bloomberg)
People joining investment banking analyst programs probably ought to memorise this list of the thirteen most important private equity headhunters, to ensure that they take the call when it comes. That might not necessarily be as early as in previous years – the recruiters are noting that the “on-cycle” interviews are nothing like as important as they used to be. (Business Insider)
Obviously AI companies are making chatbots that allow you to have a conversation with fictional characters and celebrities (either depressingly tedious, or disturbingly sexy, depending on the programmers’ degree of risk tolerance). Will it affect the going price of a lunch with Warren Buffett if folksy anecdotes and value investing cliches can be generated by the yard? (WIRED)
KPMG and Deloitte, among other firms, have decided that they are going to stop doing recruitment interviews over Zoom, in order to prepare the pandemic generation for life in person. (The Times)
Ernie Ruehl was one of the Credit Suisse bankers that UBS wanted to keep – he was named as one of the dozen they were retaining. But he’s not staying – the semiconductor industry coverage veteran is going to PJT Partners. (Bloomberg)
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