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Morning Coffee: JPMorgan's top high yield trader made a huge loss at a hedge fund. Citigroup's other ranking of female graduates

A MidJourney impression of Bhavit Sawjani drinking coffee in a cloud of smoke

As we noted last week, the signature move for traders in 2024 might not be to leave a bank for a hedge fund, but to go the other way. Ben Hutson did it at Barclays, and now maybe Bhavit Sawjani will be doing something similar at JPMorgan. 

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Sawjani, who graduated from the UK's Warwick University in 2003, spent nearly 17 years at JPMorgan before leaving in 2019. During that time, insiders say he was the bank's top high yield credit trader, and that his departure was therefore a blow. 

Sawjani left initially for GoldenTree Asset Management, where he spent two and a half years, but in July 2022 he moved to Dubai with ExodusPoint to become head of the local office. There, things seem to have come undone.

Bloomberg reports that Sawjani and his six person ExodusPoint team lost more than $70m late last year. ExodusPoint's spokesperson declined to comment to Bloomberg, and Sawjani didn't respond to its attempts to get in touch.

Presuming that Sawjani did lose $70m, his next move is unclear. When portfolio managers make large losses at hedge funds, it's not the same as traders making large losses at banks. As former hedge fund PM Brent Donnelly has pointed out, “If you lose $10m in a bank, you go back to zero the next year, and you can get a bonus again,” but “if you lose 1% [at a hedge fund], you need to make more than 1% to get back to flat.”  

If Sawjani wants to keep his ExodusPoint position, he therefore has an uphill struggle first to make good the loss and then to make a profit in 2025. Neither may be possible: Bloomberg says his "crew has been disbanded" and that he's been stopped from trading. There's always JPMorgan instead. 

Separately, one of the most troubling of all the troubling elements in Bloomberg's article on the culture in Citi's equities business (of which more later), which it describes as "plagued by harassment and drugs", is the alleged treatment of the bank's incoming female graduate hires.

Bloomberg spoke to 22 people for its article, and their allegations match many of those made by Citigroup managing director Ardith Lindsey last year. 

They include the claim, also made by Lindsey, that when Citi's new class of graduate hires was incoming in 2018, a dossier of photos was circulated and male traders rated the attractiveness of the incoming female analysts. In Lindsey's version of events, 'a Desk Head used a book of Citi first year analysts’ headshots to rank the “hotness” of female analysts.' 

In a separate incident, Bloomberg reports that a recent graduate on a rotational training program attended a party where "one of the unit's bosses" "surprised her by grinding his crotch against her," and that when she reported this to a senior female manager she was told to "try to meditate."

Citi's spokesperson said to Bloomberg that while the incidents described in the article would "clearly violate" its code of conduct, it hadn't identified a complaint filed "for several of them" and that many contained, "allegations that are either baseless, too vague, or involve people who have left the firm.”

In one incident described by both Bloomberg and Lindsey, senior staffers egged on a junior banker to show the underwear of a woman he’d apparently slept with. When the bank discovered this, the junior banker was terminated and the desk head was investigated. 

Meanwhile...

It's not easy losing your job in Hong Kong now. One Hong Kong banker who lost his job 17 months ago is paying $7.7k a month for rent and  $128k a year on his children's education and has no idea when he'll get another role. (Bloomberg) 

43-year-old John Zito is the man to know in Apollo's credit business and an advertisement for starting your career at the bottom. He began as a distressed debt trader in a hedge fund that wasn't entirely successful. “He’s an investor that’s worked his way up from the bottom rank, so he knows exactly how everything works from the infrastructure of investing to the underwriting of individual names." (Bloomberg)  

Millennium hired You Khai Tan, UBS's global head of portfolio trading, in Singapore. (The Trade) 

Remembering Deutsche Bank's bad time in March 2023: An ominous-looking chart started doing the rounds, showing that the cost of buying insurance against a default on debt by the German bank had rocketed higher. Nonsense on the internet matters.  (Financial Times) 

Prime brokers could be a source of contagion in the next financial crisis. In France, two prime brokers account for 82 per cent of brokers’ total gross notional exposures to non-bank entities. (The Banker) 

McKinsey & Co is being rocked by a letter purportedly written by former partners accusing it of unmanaged infighting,” “self-inflicted overcapacity” a “decline of both the quality and quantity of partner engagement”, and a “stagnant” management team. (The Times) 

In Lebanon, most people have no money, but private equity professionals are skiing and drinking Champagne. (The Times) 

You can reverse your gray hair with a two-week vacation. (WSJ) 

Computer science graduates are out of control. (The Atlantic) 

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AUTHORSarah Butcher Global Editor

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