Morning Coffee: The hedge funds hiring top bankers for 'BDE'. JP Morgan’s CEO just can’t seem to manage one person

One of the great things about banking is that it’s such a people business.  If you like making friends, you will have a much better time in finance than if you don’t, and if people like being friends with you then there’s no industry in which you’ll have a better career.  At the very top levels of the industry, the distinction between business and social life seems to disappear entirely; at the end of their careers, top bankers tend to give interviews in which they say things like “It’s nothing to do with skill, I’ve just been very lucky to have so many great friends who have given me jobs and deals”.  When of course, at the Managing Director level, that’s pretty much the definition of what it means to be good at your job.

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Some people, however, manage to take it further, and to directly monetise their gregariousness and wide circle of acquaintances.  For example, when hedge funds are trying to expand in a new territory, they often employ BDEs or 'business development executives' (as opposed to the other take on this acronym).

This is a comparatively new twist to the traditional headhunter job; like a headhunter, a BDE is expected to know the market and to be able to get people to take their calls, but they are also meant to be able to identify new talent, potentially from outside the existing sector.  It’s often a role that’s occupied by sell-siders – because of the nature of their job, prime brokerage executives are often very familiar with the local hedge fund community.

Right now, business development is one of the hottest roles in the Japanese market, where interest has spiked from multistrategy firms, who are looking particularly for macro and equities traders, in a market that has suddenly become active and profitable after years of stagnation.  Although firms like Dymon Capital and Point72 want to get into the action, they know that it’s easy to make costly mistakes, and so their first moves into a new market often involve hiring a BDE with local knowledge to start talking to recruiters and acting as a kind of “talent scout”.

For people who are able to do it, this job has a lot of favourable characteristics.  As with all the best banking roles, you’re in a situation where your salary looks pretty tiny compared to the overall investment. You tend to be operating in an environment which is familiar to you but not to your boss.  And best of all, if you screw up, then your mistakes will have the two best properties possible for a banker – they will not be obvious for a few years, and there’s a high chance that they’ll be blamed on someone else. It might be that you can make more money out of your address book than your trading book.

Elsewhere, Jamie Dimon’s ability to handle difficult individuals is one of his many legendary qualities.  It seems like there might have only been two people in his life who he wasn’t able to charm. First, Sandy Weill, the early career mentor with whom he had a famous and painful falling-out.  And now, Donald Trump.

It’s certainly not for want of trying, and he may yet manage it.  After all, up until recently, Dimon seemed to be the best Trump-whisperer on Wall Street.  Despite having closed some Trump accounts in 2021, been called “highly overrated globalist” in 2023 and the widely spread (though never confirmed) rumours of his support for Kamala Harris, Dimon managed to talk Donald round. He was even offered the job of Chairman of the Federal Reserve at a meeting few months ago, although he (perhaps tactfully) treated this as a joke.

And that is the source of the current problem; probably against his will, Dimon has been drawn into the fight between Jerome Powell and the President, on the side of “don’t mess around with the money”.  Like any bank CEO, when it comes to a choice between soothing the feelings of a powerful person, and taking a risk with earnings or capital, there is only one side he was ever going to take. 

So the “frenemies” relationship has once more become a bit less “fr”.  Can Jamie repair it?  One thing is certain; if Dimon can’t, nobody can.

Meanwhile …

Mainland Chinese securities firms have been a pretty miserable place to work for the last few years. But with the return of deal flow, they are back to recruiting.  They are also beginning to lose staff as global banks try to get back into the market, and raising bonuses to close the gap versus international employers. (Bloomberg)

Alantra, the mid-market advisory firm, put its staff through something of an emotional rollercoaster with its rapid expansion followed by a complete overhaul in 2024.  But it looks like they formed some bonds along the way – several of its former technology team have now formed their own boutique, called Avero. (Financial News)

One of the big star names of British fund management, Nick Train has not had a great few years.  But he’s still in the game, having beaten a shareholder vote for the board of his investment trust to consider their strategic options. (Bloomberg)

Despite beating analyst forecasts for the 2025 results, Ted Pick is not tempted to raise the bar in terms of guidance.  He pointed out that “We are going to not push on robust objectives, when in fact 20% returns are pretty darn good”. (American Banker)

Elon Musk says that retirement savings don’t matter, because in twenty years’ time we will all be living in a post-scarcity utopia.  Most financial advisors seem to think that you should probably also plan for a less optimistic scenario. (Business Insider)

If you’ve lost your job at a private equity fund, why not consider working for one of its portfolio companies?  Lots of them have programs for rapid promotion from blue-collar occupations to roles where you can once more earn a six (although probably not seven) figure salary, if you are prepared to “get over yourself”. (WSJ)

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