Morning Coffee: Morgan Stanley MD’s accidental terrible mistake. Being a hedge fund analyst is no longer such a terrible job

Everyone who works in an email job has a recurring stress nightmare of pressing “reply to all” or otherwise sending a message to someone who it really wasn’t intended for. Bankers are no exception, so the collective intake of breath yesterday on behalf of Mohamed Atmani, Morgan Stanley’s APAC head of financial sponsors could be heard all around the financial world.

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It seems that Atmani sent out a “deals list” to some clients, identifying some potential IPOs and other deals which Morgan Stanley was pitching for or monitoring, across the Asian and EMEA markets. This isn’t necessarily a big deal in itself – any firm that’s considering an IPO already knows that they are, and knows that Morgan Stanley knows. In many ways, the whole purpose of maintaining a deals list is to be able to talk knowledgably to clients about what’s going on in the market.  Intrinsically, this is the sort of “confidential information” which most people wouldn’t read if you sent it to them Federal Express, and which anyone who cares about it could always piece together from news reports and industry gossip.

What caused the problem is that Atmani apparently sent out the internal version of the deals list, which may have contained what Bloomberg calls “extensive price-sensitive information” on some of these deals. Morgan Stanley is certainly taking it seriously, saying that “we promptly took steps to address this inadvertent sharing of information and we continue to engage with relevant parties”.

It’s not clear what the troublesome information might have been.  Deal pipeline lists don’t usually go into much detail on financials and M&A bankers tend to keep quiet about bids which haven’t been announced yet even internally.  But they might include updates on valuation and investor interest, and some of these might be a bit embarrassing if they include things which weren’t intended for wider distribution. 

The real problem is the embarrassment.  On the sales & trading side of things, this kind of mistake is called a “fat finger”, and they are sometimes quickly forgiven and forgotten because everyone understands that in a fast moving high-pressure environment, mistakes are inevitable.  But investment bankers tend to pride themselves on their care and attention to detail; their fingers are meant to be elegant and slim.  In a world in which fully grown adults have been known to lose their temper over precise shades of yellow in highlighted spreadsheet rows, a mistake like this is an unpleasant reminder of human imperfection.

Atmani has been around long enough not to have his career entirely defined by something like this – he’s been an MD since 2010 and worked at UBS and Deutsche before moving to Morgan Stanley.  There will be some humble pie to be eaten, and some financial sponsors may decide to put business somewhere else for a quarter. But everyone makes mistakes. And the one thing we know about email mistakes is that they are governed by a particularly strict version of the law of karma; if you laugh at someone else for making one, you are pretty much bound to do the same thing yourself sooner rather than later.

Elsewhere, it’s occasionally been said that hedge fund analysts share a motto with the Hells Angels – “when we do right nobody remembers, when we do wrong nobody forgets”. Portfolio managers are the ones who pick and choose which of an analyst’s ideas to back.  This means that they are well placed to take the credit for the good ideas while dodging the blame for the bad.  And even if your PM allows an “I told you so” when the idea they passed on turns out to be a massive success, they still haven’t got any profits to pay your bonus out of.  It’s an extremely frustrating job.

That might be about to change though. Ryan Walsh, a former Millennium PM now runs a talent agency called Laurel Lake Advisors. Walsh thinks that “top analysts have just as much leverage as portfolio managers”, while his colleague Ben Sharples is predicting a “talent war for analysts” in the future.  The two say that analysts can be underpaid in job moves by “multiples of what would originally be underwritten” and even forecast that we will see $10m packages for hedge fund analysts in the near future.  People will put up with a lot of frustration for that kind of money.

Meanwhile …

Raja Akram of Deutsche Bank says “I don’t quite get the gloomy outlook”.  He confirms (along with several others on the Street) that Q3 will be a bit more muted than the first half of the year, but suggests that it’s in line with internal expectations and budget.  Perhaps analyst estimates just got a bit carried away with themselves. (Financial News)

Confessions of an accidental bonus basher – how did the economic case for the EU bonus cap and other similar regulations actually get made? (FT Alphaville)

The saying is always that strategy is an opinion but real estate is a fact, and Qube Research & Trading is the latest quant fund to put money where its mouth is and commit to a lot of expensive office space. (Bloomberg)

Could UBS really leave Switzerland?  It might be argued that after the recent capital requirements changes, it can’t afford not to. (Breakingviews)

Perhaps not the hero we deserve, but Jay Jones is the hero we need.  Under the alias of “The Profiler”, he’s made it his mission to spot recruitment scams. (WSJ)

Charlie Bouckaert, JP Morgan’s global head of M&A, says the question isn’t whether the 2026 deals boom will continue but rather “what’s going to throw us off now”?  Which gives us our earworm for the day. (Bloomberg)

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