20 March 2018

Morning Coffee: This may be the most interesting team to join in all of finance. Senior banker’s ominous statement

Is Goldman Sach’s expanding strats team the hottest place to work in the finance sector? Perhaps. Only last month CEO Lloyd Blankfein said strats give the bank a “competitive advantage” and will be a “key differentiator” for the future.

But there’s now another contender in the mix, BlackRock’s systematic active equities (SAE) arm, and it’s offering hipper and potentially more interesting jobs than those at Goldman. The $100bn computer-powered quantitative investment unit, which employs 80 portfolio managers and researchers, flew under the radar for years, but has recently become more critical to BlackRock’s operations, reports the Financial Times.

Mark Wiseman, global head of active equities, says SAE is already “at the centre of what BlackRock does” and will soon grow in importance as a testbed for cutting-edge new products. Wiseman wants SAE to transform BlackRock’s entire business by incubating new techniques that will spread across its asset management complex. As a result, SAE appears an attractive place to work if you want a stable job within an influential and growing team.

But its appeal extends beyond this –  SAE is also cool (at least in the context of the finance sector). It’s based in San Francisco, where neighbouring offices include a medical cannabis dispensary and ecological co-working space, rather than on Wall Street. Wiseman wants his team to operate like the famous research institute Bell Labs.

And while banks are trying to manufacture interesting jobs (think, fintech innovation groups), SAE roles at BlackRock appear to be genuinely so. They will give you a taste of academia (without the salary cut) and you’ll be working alongside more than 30 PhDs in computer science, physics and engineering. “SAE’s research process borrows from academia,” reports the FT. “An analyst proposes an investment idea, and is then assigned a ‘referee’ who spends a week trying to demolish the thesis.”

If you don’t make it into SAE itself, try BlackRock’s new ‘integration group’, dubbed ‘Middleware’, which is helping to spread SAE’s data-driven tools around the company. Its head, Doug Chow, has hired more than a dozen staff already and wants to have a 30-strong team by the end of next year.

Separately, Morgan Stanley president Colm Kelleher has some bad news for traditional bond trading jobs. “We can’t wait for fixed income to go electronic. Technology is our friend,” Kelleher told a Morgan Stanley conference in London yesterday. About 80% of US bond deals are still carried out via telephone or a chat service, but Kelleher wants fixed income to go the way of equities, which trade overwhelmingly electronically, reports Reuters.


Goldman Sachs bankers in London caught off guard by announcement of new CEO. (Financial News)

Deutsche Bank bolsters prime brokerage division in London. (HFM Week)

Who will succeed Jörg Kukies as co-head of Goldman Sachs in Germany? (eFinancialCareers.de – German language link)

Robots could make the next financial crisis even worse, says Goldman Sachs. (Business Insider)

London’s top bankers under 40. (Financial News)

Uncertain banker submits pertinent career question. (Financial Times)

Clones at the top of Goldman Sachs. (Financial News)

Why bankers are constantly terrified of going to jail. (Screaming and Shouting)