Morning Coffee: Bankers less keen to leave Credit Suisse than you think. Deals are going so well there’s a global shortage of Lucite

The stories keep coming; Max Mesny, David Luwisch, Laurence van Lancker and William Young are the latest four Credit Suisse Managing Directors to have left the bank. Credit Suisse is offering pay increases of as much as 30% in order to keep senior deal makers.  It’s an exodus … or is it?

When you look at these stories with a cynical eye, they don’t always add up.  At the moment, every CS news story mentions Archegos and Greensill, and most of them mention the loss of Armando Rubio-Alvarez and nearly the entire European FIG group to Jefferies.  It’s undeniable that over the last six months, Credit Suisse has seen serious reputational damage and lost some people and franchises it would really rather have kept.  But with a few exceptions like head of industrials Bill Young, a sort of diminishing returns seems to have set in.

To pick a name from today’s round of departures, Laurence van Lancker has left Credit Suisse to become CFO of Italian gaming company Lottomatica.  That’s Lottomatica, which was recently sold by its parent to Gamenet Group.  Gamenet Group is an private equity funded rollup, aiming to consolidate the European industry, and Credit Suisse were the advisors on the deal.  Without necessarily knowing the details, this looks like a strategic career move on the part of van Lancker, in which push factors might not have played much of a part.

Or look at Max Mesny.  He’s gone to be a partner at Perella Weinberg, which always has a substantial pull factor.  At CS he was the Chairman of EMEA FIG and Global Fintech. Mesny had recently lost a number of long-term colleagues, so he was always going to be vulnerable to an offer to take his talents to a boutique rather than go through the strain of building a whole new set of relationships with whoever CS hires.  It’s a loss for CS, but not exactly new news; this could have been predicted months ago.

Even the stories of big buybacks might be considered a bit underwhelming. “The bank has offered pay rises to some dealmakers looking to depart, often coupled with an increase in responsibility”, according to a well-sourced story in Financial News, but as that story also points out, show us a bank that hasn’t done that this year.  It’s the hottest labour market in ten years; everyone’s trying to poach and everyone is trying to hold on to their bankers. Counteroffers are everywhere and the fact that Credit Suisse bankers are presumably being given a large uplift to move - which the bank is presumably matching or exceeding, suggests they're not exactly rushing out the doors after all.

Citigroup analysts said back in June that there was no real evidence that CS’s attrition was any worse than peers. We wouldn’t necessarily take it that far – the FIG team was a major franchise loss, as was Hamza Lemssouguer, and if they hadn’t saved Niron Stabinsky’s SPAC team there really would have been questions asked.  But as we said a few weeks ago, Christian Meissner has steadied leaky ships before in his career; when you look at the evidence carefully, Meissner's new vessel might be less rickety than everyone presumes.

Elsewhere, if you wanted evidence of how crazy the pace of investment banking deals has got, there is now apparently a serious capacity bottleneck in the niche industry which makes “tombstones”, “deal toys” and general commemorative swag for IBD guys to decorate their offices with.  This is partly because transparent acrylic (“Lucite”) is also used for manufacturing face visors and protective screens, two applications that have seemed more essential during the pandemic than immortalising the advisors on a SPAC.

In the circumstances, it would be easier if deal toys also went virtual, like World of Warcraft armor and Animal Crossing couture.  You could even, to be on the very bleeding edge, mint a non fungible crypto token of the deal – it wouldn’t mean anything, but then nor does any other NFT. 

Meanwhile …

UBS has raised first year analyst salaries to $100k, with trickle-up effects all the way up to Director.  It now looks like Goldman Sachs and Morgan Stanley are the hold-outs and this is turning into a real game of Liars’ Poker – if they fall into line with the rest of the industry, it looks slightly weak but if they don’t, they’re paying worse than the Street. (Business Insider)

Deutsche Bank has also done the deed and is now paying first- and second-year analysts in its origination and advisory arms $100k and $105k. (Bloomberg) 

If your boss won’t pay up for alt-data and satellite photos, maybe you should do what Giles Thorne of Jefferies did, and spend a day hiding round an industrial estate to count how many riders were going in and out of an online delivery company’s warehouse. (The Times)

Rather than just making equity investments in minority-owned businesses, Citi now has a program to send senior bankers and traders to their management on secondment (Bloomberg)

UBS has launched Carmen, a portfolio of hedge funds managed by women.  Let’s hope that it never has to restrict redemptions, or the opera references will switch to La Bohéme – “your tiny hand is frozen”.  (FT)

In Andrea Orcel’s first reorganisation of Unicredit’s investment bank, there’s not so many actual cuts, but lots of people are being made individually responsible for one thing, rather than jointly responsible for a bunch of things.  Sales and Trading still has two co-heads, though. (Financial News)

Want to avoid disappointment when you land that dream job in venture capital?  A $100,000 basic and $110,000 bonus might sound nice, but if you don’t get “carry” on deals and if the conflict of interest policy interferes with your angel investing, it’s basically chicken feed. (Business Insider)

Apparently some male office workers liked their lockdown haircuts so much that they’ve decided to go for the longer look as a full time thing.  Expect remarks along the lines of “who do you think you are, Brad Pitt?” (WSJ)

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