Morning Coffee: Morgan Stanley’s most cutthroat office. Goldman Sachs bankers on $950k salaries need additional pleasing

One of the most dangerous places in the world to stand is “between a junior banker and an opportunity”. Very few people get into the investment banking industry because they want a measured career progression with work-life balance; they want big money, as quickly as possible.  This is one of the aspects of the workload problem that doesn’t get talked about so much; when someone ends up working 110 hours in a week, it’s easy to blame the managing director, but it’s just as likely that the real cause is that they were trying to outdo another associate who’s working 109 hours a week.

💥Follow us on WhatsApp for news alerts.💥

Morgan Stanley’s Budapest office seems to be an example of this. The deal here was that MS hired a lot of ambitious young graduates across Europe, and told them that some, but not all of them would get the opportunity to transfer to London or New York. This, plus the fact that Hungary is at least six hours’ time difference from the USA, seems to have driven some pretty aggressive working practices.  There are stories of MS juniors asking for permission to leave because they could see the sun rising over the Danube.  (Morgan Stanley hasn’t commented yet, and it’s noticeable that nobody is alleging that the actual limits on hours were breached).

In fact, almost no one at Morgan Stanley's Budapest office achieved the desired London-New York transfer. The Wall Street Journal says only four bankers out of 40 have moved since 2024. When everyone wants the same thing and only 10% succeed, the competition is likely to be extreme. 

It seems that some of the employees got grumpy (perhaps understandably) at the lifestyle and at the pay differential between the Budapest office and the teams they were supporting. Somebody made an anonymous claim that the Budapest team were doing considerably more advanced front-office work than originally intended. The claim said people there might have gone beyond the level of involvement that their regulatory status qualified them to do.

Without any knowledge of whether these allegations are correct or not, there’s a certain inclination to say that this sounds like a problem of success rather than one of failure. In most cases, junior bankers don’t necessarily object to working long hours per se – they object to having their time wasted on unnecessary or boring low-level tasks.  If they were being brought further and further in to the deals, that means that the teams in “the mothership” must have been growing to trust them.  Which, as anyone who has been involved in an investment bank offshoring project will tell you, is not a trivial achievement.

Morgan Stanley's situation is not unique. When Citigroup set up its Malaga office, promising work-life balance on lower pay, it ended up with exactly the same arms race of competitive overwork before being shut down.  And it’s also interesting to note that many of the Malaguenos ended up finding very good jobs at sovereign wealth funds and similar employers.  In a couple of decades, we might find that the Mighty Morgan Stanley Magyars turn up at the very highest levels of European banking, and they’ll all be able to say they started on the very bottom floor.

Elsewhere – but possibly with the same underlying psychological structure, it’s not quite true that once you’ve made partner at Goldman Sachs you’ve reached the very top of the tree, earning upwards of $950k with super perks.  Because there is also the management committee to get onto. 

Officially, this isn’t an extra super-secret promotion; it’s just a committee of those partners who have taken on the additional responsibility of advising David Solomon. But … there are some people who always think that if there’s a prize of any sort they want to win it and if there’s a title they want to get it.  And people like that seem to be, unsurprisingly, more common at the top ranks of investment banks than in the average population.

Which is probably one reason why the management committee is quite big; despite past attempts to cut or restrict its membership, it recently grew from 45 to 47 members with the addition of Stephan Feldgoise, the global head of M&A and Josh Shiffrin, the head of risk for investment banking and trading. 

The committee has added more than 20 people in the last 18 months.  The FT says this is “an effort to elevate a new generation of leaders at Goldman but also part of a broader effort to retain top executives”. It certainly isn’t part of an effort to economise on biscuits.

Meanwhile …

Analysts will have to get used to saying “great six months, guys” as quarterly reporting becomes optional under new SEC rules. (FT)

Could this be why so many big US law firms are hiring so aggressively in London?  Some private credit firms have begun to us the English bankruptcy courts to get more flexible restructurings agreed. (FT)

Ken Griffin isn’t so keen on Zohran Mamdani’s New York and intends to make Citadel Miami even bigger. (Bloomberg)

“On a panel about mergers and acquisitions, a managing director at the investment bank Jefferies wearily insisted that she didn’t want to talk about AI, and proceeded to do so for 15 minutes”.  It sounds like the Milken Institute Conference isn’t as much fun this year as it used to be. (The American Prospect)

Although, despite the “claustrophobic vibe”, many of the bankers there were still optimistic; JP Morgan’s Anu Aiyengar said that “Earlier, you would think about doing an M&A deal as adding to risk … now you think about doing M&A to mitigate the risk that is facing your business.” This includes “Geopolitical risk. AI risk. Tech-enablement risk. Supply chain risk [and] Demographic risk.”, so there’s practically no such thing as bad news anymore. (Bloomberg)

LIV Golf began by recruiting Michael Klein to advise on its bid for the PGA, but is now retaining Michael Kramer (of Ducera Partners) to help it with financing options now that the Saudi wealth fund is not writing all the checks. (LIVGolf)

Cyan Banister is a “professional daydreamer” who thinks that “Pokemon Go was the closest we ever came to world peace”.  But she was also an early stage investor in Uber, SpaceX and DeepMind, so maybe her approach to imagining the future ought to be taken seriously. (Generalist)

Follow me on X. Follow me on LinkedIn. 

Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @SarahButcher. Signal: sarahbutcher.22  Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. 

Bear with us if you leave a comment at the bottom of this article: comments are moderated intermittently by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. You must take sole responsibility for comments you post on this site. We will take reasonable steps to weed out anything that we consider to be offensive or inappropriate.