Why Jefferies' equities chief has quit banking after 30 years to fly solo
Andrew Shortland has spent 30 years in senior equity trading roles in the City, and is under no illusions about how most people end their investment banking careers.
“There are three ways out of banking – you die, you’re fired or you leave in handcuffs,” he says. “There’s a fourth option, which is rare, and that’s to leave on your own terms.”
For the last eight years, Shortland was the head of international equities at Jefferies in London, but he left in March. After a few months skiing, rock climbing and relaxing with family he has now started his own firm, Andrew Shortland Associates. He has been replaced by Ed Keen, previously the head of EMEA equities at the bank.
Shortland, known as ‘Shorty’ within Jefferies, says that CEO Rich Handler and president Brian Friedman sent a “glowing” email around the bank on his final day. Nonetheless, the impetus for leaving wasn’t entirely positive.
“There were personal things in my life that made me reassess things. One of my children was very sick and three friends were thrown in jail,” he says.
Shortland has three children - two boys and a girl - and his middle son was diagnosed with acute aplastic anaemia, a disease where the bone marrow does not make enough blood cells for the body. Eventually, his son recovered thanks to a bone marrow donation from his daughter.
Meanwhile, in 2015 three Jefferies equities traders, Hamish Maclellan, James Hyde and Phillip “Joe” Jenkins were sentenced to four and a half years in prison after being convicted of cheating tax authorities through a film investment scheme. Their appeals have since been rejected.
All of this fed into his decision to leave and, in his last two years at Jefferies, Shortland said that he made some tough choices about what to do with his life. “We had some training by Mckinsey consultants and it challenged me to think about how you grow yourself, your leadership style and general happiness in your life,” he says.
Too many people in investment banking are happy to stick with what they know, he says. “People want to stay at the epicentre of their comfort zone, but you stop growing and learning if you stay there. It’s important to challenge yourself and try something new.”
Surviving on the trading floor
Despite spending 30 years in banking, Shortland has not really moved around. He started his career “making cups of tea on the London Stock Exchange for £6k a year” in the mid-1980s, and worked for three years at Morgan Stanley before moving to Bear Stearns in 1992, where he eventually rose to head of international equity trading.
Shortland says he would “still be at Bear Stearns” were it not for the small fact that it collapsed in the build up to the 2008 financial crisis. Shortland, and a team of around 30 equity professionals, were lifted out and brought into build a new equities desk at Jefferies in London. Over the course of the next five years, he says that the team expanded to over 300 people.
Equities is one of the most heavily electronified parts of the trading floor, and investment banks’ teams have been decimated as more trades were carried out by computers. Shortland claims that longevity comes from having the right reputation and relationships with clients.
“You should always think about your reputation,” he says. “The core emotions on the trading floor are greed and fear, and I’ve seen a lot of people’s judgement clouded by greed. They take shortcuts and often don’t think straight. In banking, you build relationships for the long-term. If you’re thoughtful and upstanding, you can have a very long and fruitful career.”
Shortland is flying entirely solo with his new venture. He says that the firm will offer a variety of services from matching capital hungry companies with potential investors, to internal consulting for investment banks. The “associates” part of the name comes from the people he knows – a rolodex of “4,500 people” who he could potentially put in contact with the companies he’s working with.
“Investment banks don’t have a lot of grey hairs, because they fired a lot of MDs,” he says. “I’d like to offer an independent perspective on which business areas they could close, expand or trim down.”
In his last 18 months at Jefferies, Shortland says that he took on an internal consulting role. In particular, he says that he reinvigorated the Japanese equities business – dubbed Japan 2.0 internally – “upgraded” some staff and built out the division in Asia.
Often, he says, changing a business area just means getting the right people in place.
“You have to look at management and culture – maybe there’s a manager breeding a toxic environment who no one enjoys working with, who’s not prepared to resign but they have a department growing stagnant around them,” he says. “Also, I want to look at diversity – investment banking is still too male-centric.”
Breaking into banking
Shortland says that all three of his children have decided to follow in his footsteps and are attempting to start out in banking. Is this a good idea?
“Equities isn’t exactly a growth area,” he admits. “My three children all want to go into investment banking. The advice I give them is that the best area of investment banking, and one that will continue to grow for years to come, is the advisory business. That bridge between companies and capital will always be needed.”
Like other senior investment bankers who have since left big institutions, Shortland believes that it’s still the best place to start out. “Investment banking is still the best training you’ll receive. If you decide to go off and do something else, it opens a myriad of opportunities,” he says.
Shortland says that he’s interviewed “hundreds” of analysts and traders over the years. He never went to university, and instead started out in the City after school. “I was grateful to get a job.The mid-80s were a tough period, and the prospect of employment made me shelve the plans to go into the Royal Airforce,” he says.
Now, every single applicant to an investment bank comes from a top university with impeccable academics, and Shortland says it’s a “filtration device” for banks’ HR teams. Whenever he interviewed potential recruits, however, he says that he always tried to find “something different”.
“I spend interviews talking to people about anything other than banking,” he says. “I used to have colleagues who would throw tough maths questions at candidates, but that’s not my approach. I want to feel at ease with them, because if they can’t make me feel at ease they’ll struggle with a client. I tend to make them feel comfortable, so that I can see the real person.”
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