Morning Coffee: Goldman Sachs' cost cutter can be a little curt. Morgan Stanley needs these 23 year-old literature graduates
When Marc Nachman, head of Goldman Sachs' asset and wealth management division, is mentioned in polite company, he's usually portrayed as a behind the scenes sort of presence. He's a "fixer," said the Financial Times in November last year. He's David Solomon's guy, added the FT more recently: D-Sol uses M Nachman for his structural fixes.
However, Nachman is also "very smart" and "digs into detail." This might sound good until you are being dug into, an experience that seems to have afflicted one of Solomon's other favourite people.
The Wall Street Journal reports that Stephanie Cohen, Goldman's co-head of platform solutions, fell foul of Nachman's spade at an executive committee meeting a year ago. Cohen, who had just a period of personal leave, was talking about Goldman's consumer division. Nachman is said to have interrupted her to say she wasn't making sense. The rest of the executive board reportedly looked on uncomfortably.
Cohen has since gone on another long period of personal leave and the consumer division is being viciously pruned. Nachman, howver, seems to have been rewarded for his tenacity. He's now in charge of the division that Goldman hopes will drive its recovery, and has been named as a putative successor for David Solomon. Nachman manages 13,000 people at Goldman and is building a wealth management business around people who have $60m to invest. Some people internally can't remember his name, but Nachman is the man of the moment. “Obviously, I feel the pressure, right?” he told Bloomberg in October. Working for him under such conditions may or may not be fun: "Private wealth and asset management are about to experience what it’s like to work with Marc, which they definitely have not experienced before,” one Goldman banker informed the FT last year.
Separately, Financial News says Morgan Stanley has decided that what it really needs are liberal arts graduates who can write AI prompts.
Citing a research note from Mike Mayo at Wells Fargo, FN says Morgan Stanley has concluded that AI is nothing without good prompts and that the best prompts are written by young liberal arts graduates, whom it hires in and trains up in the art of commanding large language models.
This isn't to say that data science and coding talent aren't also needed. Mayo says Goldman Sachs is having trouble identifying people who genuinely know about AI from those who've watched a few YouTube videos. There's "résumé inflation:" lots of people claim to know about AI now, says Mayo; few really do.
The ECM would like to give risk managers more power over bonuses at European banks. “I think we could do more to strengthen the hand of risk managers.” (Financial Times)
Goldman Sachs initially tried to offload the card business onto private equity firm SilverLake but those talks fell apart. As it extricates itself from the Apple Card deal, it's offered employees a guarantee that if its them go it will pay them a year's severance. (WSJ)
The big Canadian banks seem to be boosting their bonuses and saying things like, “We are delivering compensation that is market competitive and performance-based, and also with practices in place to promote fair and consistent outcomes and alignment between executives and our employees.” (Globe and Mail)
Lazard poached Adam Cady from BofA cover some of its largest private equity and alternative asset manager clients. (Bloomberg)
Nomura hired Treasury official Tom Scholar to chair its European operations. It's his first big job since he was sacked last year by then-Chancellor Kwasi Kwarteng. (Bloomberg)
Somerset Capital Management, the boutique fund manager co-founded by Tory MP Sir Jacob Rees-Mogg, has lost more than two-thirds of its assets after the firm’s largest client severed ties. (Financial Times)
Binance is still hosting fancy parties. Last week there was one in a club with a kaleidoscope tunnel where guests dined on American Angus beef and bucatini with Australian truffles. (Bloomberg)
EY is cutting another 150 jobs. (Financial Times)
PWC wants 28% of its workers to come from lower socioeconomic backgrounds. Right now 17.5% do. (The Times)
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