Morning Coffee: Morgan Stanley wants to find the next ChatGPT for bankers. A brand new back door career route into investment banking
Now that the NFT boom has come and gone, many people in the crypto industry are “pivoting to AI”. This includes the biggest bores on every trading floor; if a year ago someone was constantly showing off their collection of Bored Apes, the odds are very high that they’re currently trying to tell anyone who will listen about the rap battle between Carl Icahn and Bill Ackman that they’ve just “created”.
Of course, as in the crypto boom, there are also people in every bank who have the job of trying to work out how to actually use the new technology for useful things, and hopefully to do so without creating untold regulatory trouble. For AI at Morgan Stanley, that’s the job of Sean Manahan, an MD with the title “Global Head of Technology Business Development”.
It seems like Sean’s job is to be a little bit Silicon Valley but a little bit Wall Street, without allowing one to overwhelm the other. He can genuinely claim to have heard of OpenAI before nearly everyone else in banking, having met with them two years ago when they were a nonprofit research team. Apparently this is going to result, sometime soon, in an AI tool for Morgan Stanley’s wealth managers to “help them parse the bank’s massive trove of research and data”. (Anyone who has spent much time with wealth managers might suspect they would prefer a tool that helped them amuse the clients with somewhat better personalised limericks than ChatGPT seems able to manage).
Manahan now has a substantial team of 30 people, assessing tech vendors to see if they can add value. This looks much more like a front-office job than a typical purchasing manager role; they have to work with the business units to understand their needs and pain points, then meet with venture capitalists and tech bankers to find out about new startups before the competition have heard of them, and then to deal with the companies themselves. This last bit is potentially quite a tricky task; not every start-up that comes straight out of Stanford University necessarily has the capability or maturity to work in a heavily regulated industry, and founders who might initially have dreamt of changing the world might need a bit of emotional hand-holding to accept that “we want to automate the formatting on this spreadsheet” is also a valid goal.
Elsewhere, there have always been a few medical doctors working in investment banking, usually in the field of biotech or healthcare coverage, or something similarly related to their area of expertise. But a new startup website seems to be trying to suggest to junior doctors that they have other important skills – doing without sleep for long periods of time, filling in records accurately, dealing with anxious and angry people – that could be transferable to more general roles in banking, management consultancy and other non-healing vocations.
It could be argued that preparing Powerpoints and “pls fix”-ing valuation tables is a bit of a waste of a medical degree. Which might be true, but of course it’s also a waste of a degree in art history, geophysics or pretty much anything else – even an MBA doesn’t have all that much relevant content. Junior doctors often feel like they’re badly underpaid for what they do, and banking has the distinct advantage for them that it is at least capable of making a dent in their medical school debt.
This might be bad news for anyone else trying to break into banking, as it means that medicine won’t be providing its usual function of taking a significant proportion of the smartest and most dedicated kids and stopping them from competing for banking jobs. But it’s not necessarily as socially destructive an idea as it looks. If someone has become disillusioned with medicine, it’s probably better for them to get out and do something roughly as prestigious and better paid, rather than ploughing on and unenthusiastically going through the motions of treating patients.
More and more businesses have started asking for tips for the staff, often in quite surprising contexts. Which bulge bracket bank will be the first to present an invoice for an M&A transaction with a blank line at the bottom inviting the bidder to add an extra couple of million for the Associates on the deal? (WSJ)
Banks’ trading businesses are increasingly reliant on hedge funds, and to a large extent that means a fairly small number of “pod shops”. In a world where the industry is continuing to concentrate – and when absolute return investments aren’t as attractive as they used to be with low interest rates – is that sustainable? (FT)
Another specialist commodities trading house demonstrating massive bragging rights over Wall Street – Vitol doubled its compensation pool last year, with 3,311 employees taking home an average of $785,000 each. (Bloomberg)
Goldman Sachs’ Julian Salisbury certainly isn’t ready to give up on finding new ways to make money just because of the firm’s slightly disappointing two last quarters. He’s noticed that regional US banks have, if anything, had an even harder time of things and they aren’t going to be lending so much. Consequently, Goldman Sachs Asset Management is moving into private credit, to try and profit from the industry shift. (Institutional Investor)
Andreea Koening is a director of a French football club, who says that her former career as an investment banker (at Goldman and JPM) prepared her well for an environment in which she’s often the only woman in a room full of sweaty and uncouth men. (FT)
It’s not just the banks – CME Group is cutting 3% of its global workforce … (Bloomberg)
… and the total cost of severance payments in this round of cost cutting are now more than $1bn. That could buy an awful lot of boutique hotels and microbreweries. (FT)
If you lose money in the markets, you can always try to get it back in a courtroom – shareholder lawsuits against banks are on the increase, while SPAC lawsuits are falling. (Finews)
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