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Morning Coffee: 61-year-old Citi banker with $19m pay still not ready to retire; Goldman Sachs bankers no longer career monogamists

Given that Paco Ybarra, head of Citi's institutional clients group, wasn't a supporter of working from home during the pandemic, his eagerness to keep on coming into the office at a time when most people might be happy tending the dahlias is perhaps unsurprising.

Citi announced yesterday that 61-year-old Ybarra, who's been at Citi for 36 years and who last year earned $23m, is retiring from Citi. The Financial Times said it was Ybarra's own choice to go, but that it had been reached in discussion with Citi CEO Jane Fraser. That together 'they had reached the decision that it was time to move on.'

Despite the camaraderie, Ybarra doesn't seem very ready to be displaced. He told the FT he doesn't,"plan to disappear,” or think he is,"just going to play golf," but that nor does he know what he will do next. 

Fortunately, Ybarra's existential crisis is being forestalled by the fact that he's not actually leaving Citi until the middle of next year while the "future leadership of Citi's institutional business" is established. Fraser said decisions about this leadership will be "shared" in the coming months. A new structure is possible, but Ybarra will be a bit of a lame duck in the meantime (including, conceivably, in the pre-bonus season). There are intimations that he clashed with Fraser, with whom he vied for the CEO role, over work from home. There are intimations, too, that he's leaving because the institutional clients group has not thrived under his leadership. Profits in the business fell 44% year-on-year in the second quarter.

Separately, there was a time when people who joined Goldman Sachs stayed at Goldman Sachs until the end of their careers, when they did an Ybarra and retired only semi-voluntarily. The FT suggests this is no longer the case, quoting headhunters, who say top Goldman people have become much more receptive to their calls and are even phoning-up themselves.  

Where do they want to go? Citadel and Citadel Securities are popular (David Thomas and David Rusoff have recently gone there). So is Sixth Street (Julian Salisbury and Marty Chavez are there). So is BDT & MSD  Partners, led by ex-Goldman co-head of investment banking Gregg Lemkau.  

The problem seems to be pay. Goldman CEO David Solomon has been wooing partners with drinks at his apartment after they were paid a special one time bonus in early 2022.  Nonetheless, headhunters say lower pay and frequent reorgs are to blame. Goldman denies there's an issue and says this is just natural attrition. 

Meanwhile...

Ybarra spent most of the last few years overhauling Citi's technology and control systems. “Knowing that these initiatives have taken hold and are progressing across the bank, Paco feels that now is the right time to make this change,” said Jane Fraser. (Bloomberg) 

Twitter is hiring someone to build a trading hub inside its app. (Semafor) 

Trading revenues at Coinbase fell 50%. (Forbes) 

Coinbase stock had risen 80% since mid June. (Bloomberg) 

The effect of Credit Suisse's disappearance: “Lower down the league tables, it is now fair game for a lot of up-and-coming banks.” (Financial News) 

M&A revenues at Rothschild were down 30% in the first half. (Reuters) 

Barclays is considering moving its EU headquarters to Dublin from Paris for regulatory reasons. There won't be any hiring as a result, but Barclays is already boosting Paris headcount from 200 to 300 people by 2026. (Bloomberg) 

Marc Rowan, chief executive of Apollo Global Management, says the private equity industry is in retreat now that interest rates are rising. They'll have "to go back to investing in the old-fashioned way. They’ll actually have to be very good investors.” (Financial Times) 

SocGen chief executive Slawomir Krupa intimated that cuts may be coming. SocGen businesses will need to meet "cost of equity in a sustainable way" if they're to survive. (Bloomberg) 

Multiple billion dollar hedge funds are launching soon. They include: Nick Laster’s Lykos Global; JCAP, the brainchild of a 30-year-old quant; LuminArx Capital Management, started by former Blackstone executives; stocks-focused Obion Capital Management, Freestone Grove Partners and Bobby Jain's new fund. (WSJ) 

Steve Cohen has semi-unintentionally spent $88m on some basketball players. (WSJ)

Workers aren’t just bargaining over money. They are also demanding more non-monetary compensation, such as paid leave and flexible hours. As a result they often put in fewer hours, or accomplish less in the hours they do put in. (WSJ) 

You don't get work done in the office because your brain's selective attention skills and ability to block out distractions have been weakened by working from home. (WSJ) 

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AUTHORSarah Butcher Global Editor

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