Morning Coffee: Pay for new graduates in banking rises to £100k. World's largest fund is hiring 20 portfolio managers

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This is not the time to be a managing director in an investment bank. As we noted several weeks ago, investment banks' top ranks are being squeezed: managing directors are too populous and too expensive. The future belongs to juniors. Today The Times reiterates this notion: it says that investment banks are undergoing a 'permanent structural change'. The number of junior staff is rising while the number of senior staff is falling; the pyramid is getting far, far, steeper.

One upshot of all this is that juniors in investment banks are getting paid more. The Times reports that pay for graduates in investment banks is now maxing at £100k in year one - up from £70k in 2008. Within three years of joining, junior bankers can now earn up to £280k, up from £220k before the crisis according to Dan McCarthy, managing director of recruitment firm One Search. "The [pay] gap between the senior levels and junior is really closing,” McCarthy declares. Needless to say, the pay figures cited included bonuses.

Separately, the Financial Times reports that Norway's enormous sovereign wealth fund wants to double the number of portfolio managers in its equities team. The Norwegian oil fund, which manages $840bn, currently employs 85-90 people in the equity unit, of whom 20 are sector specialists. Petter Johnsen, the fund's chief investment officer for equities, told the FT the fund wants to double its sector-specific coverage, with an emphasis on financials such as US banks or European insurers. “This group will expand quite a lot going forward. We’re still in a build-up phase,” Johnsen said. Send your CV in now.


Between 70% and 80% of recruits to private equity firms are still from investment banking backgrounds. (Financial News) 

Most private equity funds won’t have to defer bonuses – only funds with more than £5bn under management will be subject to new deferral rules, (Financial News)

Goldman Sachs, JPMorgan and Citigroup have been given permission to use their very own models to calculate risk and capital requirements. Bank of America hasn't. (Financial Times) 

After changing its risk model, JPMorgan didnt have a perfect trading year after all. (Financial News) 

Ross McEwan will especially cut middle-management layers at RBS. (Telegraph) 

Stuart Gulliver’s salary at HSBC could double to get around EU bonus restrictions. (Sunday Times) 

HSBC has a £2.4bn bonus pool. (The Times)  

Bank fines in Britain could be about to go through the roof. (City Am)

UBS hopes to avoid fines in the FX fixing case by blowing the whistle on all other banks. (Bloomberg) 

Ex-Evercore banker arrested for insider trading. (Financial Times) 

Credit Suisse has hired a new communications executive from ABB to help manage its image at a difficult time. (Reuters) 

Sample resume template for students who want to get into finance. (Wall Street Oasis) 

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