Morning Coffee: Nice, safe, high paying finance jobs have a little puke. The complicated bank chief with the deluxe private jet

The good thing about buy-side jobs is that they tend to pay well. The bad thing is that your performance is usually very easy to measure, quite public, and often hard to make excuses for.  So you don’t necessarily have much job security – there are plenty of managers at multi-strategy hedge funds who get massive bonuses one year, then have a few bad months, lose 7.5% and get cut.

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So the holy grail of investment careers is to find an employer that pays close to Wall Street, but which doesn’t have Wall Street’s aggressive nature.  Historically, a good place to look for these kind of jobs has been in public sector pension funds, which don’t have to worry about fund redemptions and which often bid salaries and bonuses surprisingly high in an attempt to be “competitive” for talent.

All good things come to an end, though, and it seems that after years of reporting “a challenging environment for stock picking” and “unexpected changes in China”, the Canadian Pension Plan Investment Board has finally lost patience with its active equities unit.  Frank Ieraci, the head of the team, will be leaving and it will be merged with the capital markets unit. The big new department will be run by a woman, Heather Tobin.

However, this isn’t necessarily the end of the road.  The active equities team employed 120 people, but the reorganisation is only going to involve “dozens” of layoffs.  It seems that most of the staff will just move over to the new “Active Public Markets” department.  So it looks like the risk / reward tradeoff has still turned out to be pretty good.  And it’s a career strategy that might reproduce internationally – Stichting Pensioenfunds ABP has also closed down its active equities strategy, but this has only resulted in 40 redundancies out of a staff of more than a thousand.

Another favoured kind of employer for people who value job security has always been the head offices of big national-champion insurance companies.  The French finance professionals at AXA might not have been quite as well paid as their neighbours in La Defense, but they do seem to benefit from the country’s highly protected labour markets.  Although Axa is cutting 12.5% of its head office staff, it’s doing so through a voluntary redundancy program rather than compulsory layoffs, and those who go are being offered financial and career support.

The forcible ejection of staff is therefore small. There isn’t really any such thing as total job security in banking – it is inherently a volatile industry. And for any one individual, your future is much more likely to be determined by what you do yourself than the place you do it at.  But some employment situations are more risky than others, and it does make sense to consider this along with the potential upside.

Elsewhere, the FT has an extremely long and interesting profile of Ana Patricia Botín-Sanz de Sautuola O’Shea, better known as the executive chair of Santander.  It starts from her earliest days, being taught golf by Seve Ballasteros and identified by her father, Emilio Botín, as his chosen successor to take over the family bank.  And it continues to the present day, running the largest bank in Europe by market cap and flying around in a Gulfstream G700, an exceptionally sweet-looking long range business jet with a list price of nearly $80m.

It’s certainly been quite a journey, and by no means necessarily an easy one.  Emilio Botín apparently told his executives to be much tougher on his daughter than on all the other employees, so that she wouldn’t get the nepo treatment.  And as a young banker on the graduate scheme at JPMorgan, she got an assessment as “a bit overwhelming to her fellow participants”.  It seems quite understandable that she doesn’t want to put her own children through the same experience; she says she will be the last Botín to run the bank.

Along the way, of course, she got quite a lot of advice from Andrea Orcel, the current CEO of Unicredit. Famously, Orcel was offered the CEO job at Santander and accepted it, before a complicated set of disagreements (which are still confusing – pay was part of the story, as was the relationship between him as CEO and Botín as chair) derailed the appointment.  The FT reveals that this is still not quite settled – after a Spanish court awarded Orcel €43.4m, Santander’s appeal is likely to be judged next year.  You can’t have a career like Botín’s without at least a bit of drama.

Meanwhile …

Charles Elkan, a former machine learning lead at Goldman Sachs and Alex Popa, a former PM at Capital Group, are launching “Poesis”, which intends to become a multi-strategy hedge fund fully staffed by AI agents. (Bloomberg)

They may be earning less than Wall Street CEOs in terms of their salary, but if the Anthropic IPO gets away at the currently expected valuation, its founders will cash out about $250m each, keep stakes worth $18bn and still have total voting control. (WSJ)

Point72 Capital is claiming that one of its quants used their internal AI tools (based on Claude and Codex) to “data mine” other employees’ code and data and transfer it to his personal devices.  Xin Jin denies this and “looks forward to setting the record straight”, according to his lawyer. (Bloomberg)

Greenlight Capital have won their litigation against their former analyst James Fishback, and he apparently now has to hand back all the compensation he ever received there. (David Einhorn)

Christopher Woolcott has been sentenced for fraud and forgery after trying to create the impression of a takeover bid for a commodities company to push its share price up. He adopted an American accent to pretend to be a private equity executive, used ChatGPT to forge lawyers’ letters and created a message board account called “Junkie Monkey”. (Bloomberg)

Michael Abraham and David Tapnack have left UBS and PwC respectively to set up Crevora Partners. Their new boutique will apparently do “old-style merchant banking”, which apparently means co-investing in their advisory clients rather than playing a lot of gold while drinking martinis. (Financial News)

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