Morning Coffee: Citi's top tree-hugging banker departs as revenues return. Citadel and 4 year non-competes
What has become of banking revenues in 2025? After a first quarter in which global investment banking revenues were down 2% year-on-year according to Dealogic, things are suddenly fluffing up again.
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Bloomberg notes that year-to-date, M&A revenues are now up 9% year-on-year. This is partly by virtue of $30bn of big deals announced last Monday, including Parkland's $9bn acquisition by Sunuco, Skechers' $9bn acquisition by 3G and the acquisition of Santander's Polish business for €7bn acquisition by Erste. Pipelines, which are always full if you ask senior bankers, are now more replete than ever. Giant deals are being pondered - the Financial Times says rivals are running the numbers on an acquisition of BP. IPOs are rousing from the dead - in London, Monzo is reportedly meeting with Morgan Stanley about a £6bn offering early next year. Brian Hanratty, head of equity capital markets (ECM) at British investment bank Peel Hunt Ltd, is declaring that "there are three to five notable IPOs lined up for the coming quarters." And in the US, Bloomberg says paused IPOs like that of eToro are back in play.
This all sounds like fine news for senior bankers struggling to keep their jobs amidst the threat of deals being "deleted." In the immediate term, though, it may be less good news for junior bankers driven to an even greater frenzy of pitching, but they too may eventually benefit from higher budgets, bigger bonuses and more hiring.
In this potential dawning of a better time, the FT reports that Luigi De Vecchi, one of Citi's top dealmakers in Europe and a man with the ear of Europe's top luxury brands and fashion houses, has decided to move to Evercore instead. There, he will be chair of Evercore's continental European business from July and will open a new office in Milan to help spearhead growth in Europe.
Ironically, Citi's investment banking business had a better than average first quarter, with revenues increasing 84% year-on-year. De Vecchi worked on Prada's $1.4bn acquisition of Versace in April. His past achievements include LVMH's $16bn purchase of Tiffany in 2019.
De Vecchi's exit comes as ex-JPMorgan banker Vis Raghavan is being paid handsomely to run Citi's investment bank, while pushing the business to fund more private equity deals. De Vecchi's escape to Evercore might therefore be read as another reaction to the new boss or a quest to work for a pure advisory franchise. Or it might simply be that De Vecchi - now aged in his early 60s - wants to work in Italy, where the taxes are favourable, and he's closer to his family and friends. Vanity Fair reported last year that De Vecchi also runs a foundation that's planting tens of thousands of olive trees in Lombardy. "Trees are the basis of our future sustainability," he declared. He can be seen with a tree here. It's not quite the same as working on luxury goods deals.
Separately, following premature reports of their demise, hedge fund non-competes are alive and well. Citadel increased non-competes for some of its portfolio managers to 21 months last year, and Bloomberg now reports that Citadel is lobbying to impose four year non-competes on some of its employees in Miami, where the fund is now based.
While four years of enforced idleness on a Citadel salary might sound appealing, Bloomberg notes that they don't usually include a bonus and can be detrimental to careers as skills atrophy. Citadel may yet find that four year non-competes in Miami discourage people from working in its new office. There are already suggestions that top portfolio managers prefer New York instead.
Meanwhile...
Macquarie says it's cut headcount 7% since late 2023 and that it won't be cutting headcount much from now on. “Ten years of investment in digitization is now starting to pay dividends.” (Bloomberg)
UBS told its China bankers to stop flying business class from Hong Kong to Shanghai, even though it costs as little as $500. (Bloomberg)
It's a fine time to be a defence banker in Germany. Fabrizio Campelli at Deutsche Bank says he expects to see a “significant increase” in the number of defence clients the bank takes on.(Bloomberg)
BNY hired Nehul Mehra from Goldman Sachs as APAC head of securities financing and collateral. (Finance Asia)
London law firms like Simmons & Simmons, RPC and Shoosmiths are offering junior associates who work more than 1,800 billable hours bonuses of 25%+ of salary. If they work 2,100 hours they get 40%, although Shoosmiths has a 1,900 hour cap. (FT)
Indian wealth manager Neo Group wants to hire 70 wealth managers and will pay them up to 60% of the revenues they bring in. (Bloomberg)
Hedge fund Verition looks like a fine place to work. With a headcount of 750 and 450 investment professionals, its AUM per employee ratio of $16.8m and AUM per investment professional ratio of $28m is similar to pod shop peers. (RupakGhose)
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