Morning Coffee: The 20 students for whom a $500k private equity job would be horribly boring. UBS's unfortunate Excel spreadsheet

Getting a job at a top private equity firm is not easy. If you achieve one, you are supposed to say things like "it's much better being an investor than an advisor" and "secondaries are a valuable source of liquidity in a difficult market." You are not supposed to find your junior private equity job more tedious than the work you were doing as part of your university investment group.

20 undergraduate students at Indiana University face this peril. The Wall Street Journal reports that they are part of a $12m private equity real estate fund, 'Sample Gates Management,' run by undergraduates. They screen up to 400 investments per year, but between 2023 and 2025 they only invested in 12. This summer they sold their first investment - an industrial warehouse development in Indianapolis - and made a gross profit of 65% in 16 months.

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The 20 students are genuine investors and are involved in the entire process. When a potential investment passes the initial screening, they present it to a committee of 10 seasoned real estate executives. This committee rejects a third of their suggestions. 

The students are also involved in fundraising. In 2022 they raised $4.2m from 46 investors. 

Getting into Sample Gates Management is not easy. 278 students at Indiana University are studying real estate and would presumably all like to be investing the $12m. However, it's easier than getting into Blackstone, which is known to have an acceptance rate of 0.3% or less for its graduate programme and to be a hyper competitive employer at associate level when it employs juniors from banks.

Blackstone Associates can earn $500k according to recruitment firm Prospect Rock Partners. But one Indiana University alum who worked for Sample Gates Management says a junior job at Blackstone would be "mentally defeating" for students who have worked at the highest level of deal processes at Sample Gates. Instead of actually managing a fund and selecting investments, they will be mostly working on spreadsheets and building financial models as juniors at large funds. 

Good luck with that. Many of the students already have jobs lined up. They might be able to teach their bosses a few things. 

Separately, in this age of AI there are areas in banks that still rely upon Excel spreadsheets. Citi's wealth business was accused of attempting to implement AI on the back of spreadsheets in 2024 and now UBS has fallen foul of a secret spreadsheet in 2026.

The Financial Times reports that UBS has been fined $125m for poor money laundering controls and that the Swiss bank was using a 'complex monitoring system that included an Excel spreadsheet.'

In this way, potential money launderers went unnoticed and UBS allowed tens of millions in transactions for someone close to Vladimir Putin in Russia.

UBS had similar issues with money laundering controls in 2018 and was supposed to have fixed them. The director of the US Treasury’s Financial Crimes Enforcement Network described the bank as "recidivist" and said it is now facing "severe repercussions" in the large fine. Other banks with inappropriate Excel spreadsheets should take heed. 

Meanwhile...

Jeff Tannenbaum took over Bank of America's EMEA corporate and investment bank last year and he's implemented a system where bad managers don't have to manage and are free to go hang out with clients. "Investment banks are notorious for promoting their best producers into leadership roles. But being a precocious dealmaker doesn’t necessarily make them a good manager." (Financial News) 

Citi hired Rohan Sen from Bank of America to cover the technology services sector. It also hired five technology bankers last month. (Reuters) 

The prime brokers for the Situational Awareness fund are Goldman Sachs, Bank of America and JPMorgan. They will recall the situation with Archegos where Goldman Sachs avoided losses by exiting its positions before the rest. (Bloomberg) 

Millennium lost 2.1% last month, seemingly on equities investments. (Bloomberg) 

Palantir's revenue increased 94% in Q2 to $1.94 billion on a year-over-year basis. CEO Alex Karp said this was "otherworldly." He also said it was because customers want "AI sovereignty" and "maximal control over their operations, data, and decisions. Their competitive advantage should never become the training data for future models.” (WSJ) 

James Dacombe is a 25-year-old entrepreneur with a $3.3bn chip business. (FT)

Anthony Jenkins, the former CEO of Barclays just secured a £40m capital injection for the technology business he launched 10 years ago. He won't say how much it's worth. He is saying: "Every bank wants to be an AI bank, but almost none can be, on a forty-year-old core." (Sky) 

People still want to live in Dubai. Jordan Rochester, head of fixed income strategy at Mizuho in London, is the latest to go there. (Bloomberg) 

Banking jobs in the 1990s. “The hangover was part of the job. It was acceptable to drag your sorry ass to your desk at 7.30am and go, ‘Oh my god, that was a wild night, wasn’t it?’ and everyone else would say, ‘Yeah, it was great, wasn’t it? Corporate finance were all over the place – they were more hungover than we were. They were a shambles..." (Stylist) 

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