Morning Coffee: Morgan Stanley's $10m bankers beat Goldman Sachs' $10m bankers. The most exhausting job at JPMorgan

Investment bankers are funny creatures. They like bonuses. But they also like deal toys, tombstones and being "lead-left" on initial public offerings (IPOs). If they do not get these things and if they are not lead-left, investment bankers may throw a hissy fit. Writing in the Financial Times earlier this year, Craig Coben, a former co-head of APAC capital markets at Bank of America, said the lead-left insistence can border on psychosis.  “I should always be lead-left,” one of Coben's former bosses informed him, stridently.

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Morgan Stanley's technology bankers may therefore be feeling pretty sane now. After losing out on the lead-left position to Goldman Sachs on the SpaceX IPO, the Financial Times reports that Morgan Stanley appears to have seized the lead-left position from Goldman Sachs in the imminent but delayed Anthropic IPO. 

Being lead-left on an IPO means you are named first in emails and are (usually) at the top left of an IPO prospectus. It also means that you get to coordinate who gets shares in the initial public offering in the "bookbuilding" process of allocating shares. This matters, because in a big and shiny IPO like Anthropic's, everyone wants some shares and if you hand them out strategically, clients will remember this and will like you thereafter. 

Top technology bankers are paid well, often earning $10m+. Morgan Stanley's technology bankers, including Michael Grimes, Kate Claassen and Colin Stewart, might therefore find themselves on all the best guest lists this September. Goldman Sachs' technology bankers, including Kim Posnett, David Ludwig, Dan Dees and Susie Scher, might not. In the SpaceX IPO, Goldman Sachs' CEO David Solomon, slid into Elon Musk's DMs; this approach was possibly not available with Anthropic.

Even if you're Goldman and are seemingly not lead-left, there are possibilities of redemption. The FT says Goldman Sachs' people will be the "stabilisation agents" on the Anthropic IPO. This involves supporting shares after the IPO and it can be highly lucrative. Morgan Stanley bankers were stabilisation agents in the SpaceX IPO and they wore green shoes and were able to sell up 15% more SpaceX shares after the IPO, for example. 

While Morgan Stanley bankers appear to be on top and Goldman Sachs bankers appear to be directly below them, the FT says the next rung down will likely contain JPMorgan, Citi and Barclays, all of whom have also provided Anthropic with debt financing. 

None of this is set in stone. The hierarchy of banks will only be known for sure when Anthropic releases its prospectus. This was expected to happen this week, but Reuters reports that it's been delayed until late September while Anthropic finalises a $15bn revolving credit facility. 

When the IPO finally happens, Anthropic is reportedly planning to list for $2 trillion. SpaceX listed for $1.78 trillion and the bankers involved earned a collective $500m in fees. Whether you're in the team at Morgan Stanley or Goldman Sachs, you're therefore surely in for a very large bonus this year, even the name of the bank you work for isn't always written in the right place on a document.

Separately, working on JPMorgan's repo desk, or maybe any repo desk, is hard work. The FT spoke to Kirsten Rastrek, who is the global head of fixed income financing sales at JPMorgan, but who started out working in repo, and Kirsten suggested it's a bit intense. 

During the early repo years of her career, Rastrek said she started work at 4am in New York. This was because she was covering London, where JPMorgan didn't have a repo desk at the time, but in any repo job Rastrek says you need to be at the desk and ready to go at 7am. “The repo desk is always the first fully staffed desk on the trading floor. At 7am the market opens, like clockwork. And at 7.01am it just takes off.”

Repo is also a highly interesting desk to work on. It's the unseen plumbing of the financial markets, leading to all sorts of sewage metaphors. It is also where financial crises tend to make themselves felt. When the repo market nearly froze during COVID and had to be bailed out (again), Neel Kashkari, the head of the Minneapolis Federal Reserve, and a veteran of the 2008 crisis, expressed surprise that nothing had been fixed since 12 years' previously. “I mean, that’s just astonishing to me,” he declared. If you're at your desk at 7am each morning, you will get to experience this rickety plumbing firsthand.

Meanwhile... 

Bank of America doesn't seem to be listed on the Anthropic IPO and now it's assembled a new group comprised of Gregg Nabhan, Jill Schwartz and Ray Wood to deepen relationships with clients in an "AI Ecosystem". (Bloomberg) 

UBS wants the graduates it hires next year to show they can use AI to “improve outcomes and efficiency.” (Financial Times) 

AI will change the banking hiearchy and make it sausage-shaped once again. "We went from investment banks being partnerships where it’s a senior banker with a protégé who charges like a bulldog at every analytical input and works to become the next rainmaker, to a bullpen of 20-30 junior bankers being given bits and bobs of work that is often pretty disconnected from the client experience." (Financial News) 

Barclays wants to double its private banking headcount in Singapore. “We see Singapore and the Middle East, in particular, as two very strong growth markets for us over the coming two to three years.” (Bloomberg)  

Only 1,000 of 6,000 people who work for Apollo are investment professionals. The rest work for Athene and are busy selling annuities. (Bloomberg) 

Citadel wants to buy US oil production assets from WildFire energy. (USNews)

Jefferies bonuses might not be so great this year. Now it seems that the bank has$500m worth of exposure to iron ore trader Radiant World and another entity. Once again, this makes it among the biggest creditors in a second high-profile alleged fraud. (Financial Times) 

Singapore-based hedge fund QuantEdge is up 40% this year. (Financial News) 

American white collar workers are quitting jobs at their lowest rate in years. When they move jobs they want big pay rises after salaries were held back in their current roles. But there's little hiring and many job advertisements are not what they seem. (Bloomberg) 

A mysterious 2018 architecture graduate from Leeds Beckett University was paid £6,148,400 in the 2023-24 financial year. (The Times) 

27-year-old Griff Washburn lives an itinerant life on a sailing boat, hikes miles, cycles and kayaks. He also appears to make $300k a year on Spotify. (WSJ) 

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