Morning Coffee: JPMorgan thought Citadel Securities was "amazing" even after it poached its guy. The pleasures of travelling the world as a bank CEO

Citadel Securities has a habit of hiring from banks. Just ask Goldman Sachs, which has lost an array of people, including Jim Esposito and - quite possibly - its top rates trader Nikhil Choraria, whose whereabouts remain uncertain but who may yet reappear there.

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Despite losing all sorts of people to Citadel Securities, Goldman Sachs has not complained. It has not told Citadel Securities that it won't do some kinds of business with it. It is silent. Goldman Sachs loses staff to Citadel Securities and this is the way of things.  

JPMorgan is not Goldman Sachs. Last September, Citadel Securities poached Elan Luger, JPMorgan's global head of high touch equity sales trading. Presuming that Luger had a six month notice period, he's due to start at Citadel Securities any day and he won't be talking to his old colleagues. The Financial Times reports that JPMorgan has informed Citadel Securities that it will no longer be working with the market making firm on the kinds of high touch equity trades that Luger specialises in. Until now, it seems that JPMorgan was sharing trade ideas with Citadel Securities. Not any more. 

Citadel Securities is talking down the rift, which doesn't affect other areas of interaction with the bank - JPMorgan is still offering Citadel Securities its prime broking and programmatic trading services. It's just Luger's high touch area that's off the table. 

JPMorgan didn't comment on the FT's article. However, speaking at last week's mini investor day, Troy Rohrbaugh, the bank's co-head of commercial and investment banking, said Citadel Securities (and Jane Street) have "done an amazing job" and "happen to be very good." Citadel Securities and Jane Street are both aggressive competitors, and also clients, said Rohrbaugh.

Citadel Securities told the FT that it's "not a conflict" and that the firm works closely with JPMorgan. Even so, there does seem to be a rupture. Hopefully Goldman Sachs won't get any ideas. 

Separately, spending two thirds of your time travelling for work can be a pleasure. Just ask Jonathan Gray at Blackstone who earns $300m a year and who posts videos of himself jogging in all sorts of places. Or ask Bill Winters at Standard Chartered, who earns $18m a year and travels two thirds of the time.

Speaking to the Times, 64-year-old Winters said he travels a lot more now that his children have grown up and left home and that being the CEO of an international bank has enabled him to combine his passion for travel with work. Sometimes his wife, who works in theatre, joins him.

It's a reminder that older bankers are still very able to do their jobs and might be better at touring clients given their lack of commitments to family. Winters seemingly has no intention of retiring (partly because he has no clear successor). Nor does he have any intention of moving away from London. Winters is living the dream, although he does say: “God knows what prompted me to take this job 11 years ago. Some romantic idea about this fascinating franchise that had fallen on hard times but was still very strong.”

Meanwhile...

Stephen Schwarzman earned $1.2bn in 2025 but his net worth has plunged by $16bn+ as Blackstone shares have fallen 30%. Blackstone says it has a performance driven culture.  (Financial Times)  

Five high-yield credit analysts and traders left RBC Capital Markets after the bank made losses relating to First Brands. (Bloomberg) 

FS KKR Capital Corporation, a publicly traded KKR vehicle holding private loans, dropped 15 per cent after saying that it would slash the valuation of the assets within its portfolio. (FT) 

Midcap Financial Investment, a business development company owned by Apollo, wrote down its portfolio by 3%. (Bloomberg) 

Goldman Sachs says its private credit funds are fine. Enterprise software exposure in Goldman Sachs Private Credit Corp. was about 15.5% at the end of the third quarter, “which is toward the lower end of what peers have reported.” (Bloomberg) 

Barclays is understood to have £600m of exposure to Market Financial Solutions (MFS), which entered administration last week. (The Times) 

MFS offered “complex property-backed lending” in the form of bridging loans. It funded this business by borrowing from banks, but MFS was responsible for collecting repayments. (Bloomberg) 

MFS seems to have a £238m collateral shortfall. (FT) 

Matthew Mish, head of credit strategy at UBS, projects that in a tail scenario of rapid, severe AI disruption, high yield defaults could rise to 3-6%, leveraged loan defaults to 8-10% and private credit defaults to 14-15%. We’re currently at 0.9% in high yield, 1.6% in leveraged loans and 4.5% in private credit. (Net Interest) 

Hedge fund Taula Capital Management hired a seven person team from Millennium. Led by Greg Knight, they are based in Jersey and focus on FX trades. Millennium backs Taula. (Bloomberg) 

Commodities revenues are skewed towards certain banks. In energy trading, Goldman Sachs remains the market leader. In precious metals, JP Morgan makes up around a quarter of all bank trading revenues. (Rupak Ghose) 

Jeffrey Epstein was a difficult client. He invested in a similar way to a hedge fund professional who wanted direct access to Deutsche Bank’s structured trading desk and the lender’s best allocation ideas. (Bloomberg) 

Lloyd Blankfein describes David Solomon as “tall and athletic” in his book. (Bloomberg) 

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