Morning Coffee: How to become an MD at HSBC with no banking experience. ECM bankers have nothing to do

Usually, it takes at least a decade to work your way up through the ranks and become a managing director in an investment bank. It can be possible to shortcut this by joining a bank from a technology firm. Now, it seems there's another option for leapfrogging your way to the top: ESG expertise. 

HSBC yesterday announced that it had made several environmental, social and governance (ESG) hires, including Jenny McInnes, a career civil servant in the UK, who arrives as MD and head of sustainability policy and partnerships. McInnes has 10 years' experience working for the British government and no years' experience working for a bank. HSBC says this doesn't matter: McInnes will be working "alongside bankers" at HSBC in London; her governmental experience is relevant because she was director of international finance partnerships for the UK, and has been investing in "sustainable infrastructure and nature."

This may be the case, but McInnes' manifestation in a top role reflects the shortage of ESG expertise within the financial services industry itself. "They are the stars of the asset management world right now. Once upon a time, it was the star equity manager; now it’s the star ESG professional,” Mark Versey, chief executive of Aviva Investor told the Financial Times in an article on ESG hiring yesterday. Amid "intense" competition for talent, ESG headhunters said they've started raiding not only government departments for people like McInnes, but engineering consultancies, NGOs and multilateral development banks. Energy, technology and venture capital businesses are also fair game.

If you have a whiff of ESG expertise, then, this is your moment. The FT says experienced ESG professionals are being given pay rises of 30%-50% to swap jobs. Such bountiful times may not last. - There are plenty of young people taking ESG in finance qualifications coming down the pipeline; it's just old hands who are hard to find. “Finance people think it’s all BS, sustainability people don’t know finance,” observes one academic in the FT article. Senior people who combine both are rare unicorns, wherever they've been working for the past 10 years.

Separately, the Financial Times also suggests that our fears for equity capital markets (ECM) jobs following the war in Ukraine are coming to pass. Industry-wide ECM fees are now down more than 75% year-on-year and there were no traditional IPOs at all in the U.S. February 17 and March 14. “People were probably thinking it might be down 30 to 50 per cent but I don’t think anybody had modelled down 75 per cent,” one equity analyst observes.  

Meanwhile....

JPMorgan made Nicolas Skaff head of its private capital markets unit in EMEA. Skaff was previously head of emerging markets equity capital markets unit in Europe, the Middle East and Africa. It looks like a lucky escape. (Financial News) 

Russia's war in Ukraine is making some investors wonder whether they'd rather put their money into defence than ESG. (Bloomberg) 

Credit Suisse vice chairman Severin Schwan is stepping down. (Bloomberg) 

Credit Suisse shares are down more than 70 per cent since Schwan joined the board in 2014. (Financial Times) 

Jefferies has cut its crypto prime broking business after its two most senior FX prime brokers, Brandon Mulvihill and Anthony Mazzarese, quit for a crypto start-up. (Bloomberg) 

Bridgewater Associates is preparing to back its first crypto fund. (Coindesk)

Goldman Sachs executed an OTC crypto options trade. (Bloomberg) 

Carrie Lam, the leader of Hong Kong, says people's "tolerance is fading" for COVID restrictions. “I have a very good feel that some of our financial institutions are losing patience about this sort of isolated status of Hong Kong and Hong Kong is an international financial centre.” (Financial Times) 

Elizabeth Kozack, a founding member of Marcus at Goldman Sachs, joined JPMorgan Chase as head of alternative lending in the consumer bank. (Business Insider) 

Why are lawyers depressed? “It’s the combination of being risk averse and being cynical which is associated with pessimism—a precursor to depression. Research shows people who become lawyers have fragile egos and that’s one reason why they’re attracted to a prestigious profession.” (Bloomberg) 

Being born male and having strong masculine traits (both men and women) are associated with an inflated intellectual self-image. (Neuroscience News)