Morning Coffee: Now Citi likes to hire its bankers from Deutsche Bank, too. What to say when you lost $5bn in private equity

Citi and JPMorgan have had something going on. They like to hire each other's bankers. But what about Citi and Deutsche Bank too?

It seems that Vis Raghavan, the head of Citi's investment bank, is ambivalent about where he sources talent. He likes to hire from JPMorgan, where he used to work. He also likes to hire from Deutsche Bank, where he didn't. "We are attracting the best," said Raghavan at Citi's recent investor day. "And we can get whoever we want."

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Citi wanted to get William Mansfield from Deutsche Bank. Bloomberg reports that Mansfield will soon be running Citi's M&A business in the UK and EMEA, based in London. He will join in September.

Before he joined Deutsche Bank in 2023, Mansfield spent 16 years at Credit Suisse. Mansfield has never worked for JPMorgan. But when he arrives at Citi, he will still have friends, because Citi is also assembling a cohort of other people from Deutsche.

Citi's ex-Deutsche Bank clan includes Stuart Ord, Deutsche's ex-co-head of M&A, whom Citi hired in May to lead its UK M&A business. In April, Citi hired Henning Wagner, a Deutsche Bank lifer in Frankfurt, to head private client coverage for Germany and Austria. Citi has also hired Ed Sankey, who has been proclaimed the best equity capital markets (ECM) banker in London. Sankey joined Citi from HSBC, but he spent 15 years at Deutsche before that (albeit before Mansfield's time).

While Citi likes to hire from Deutsche Bank, Deutsche Bank also likes to hire from Citi. Alison Harding Jones, the head of Deutsche's investment bank, spent nine years at Citi before she arrived in 2024. At Deutsche, Harding Jones has been availing herself of various former Citi colleagues. In turn, some of the people Deutsche acquired from Numis have been disappearing. There has been complaining. Maybe it's the way of the world. 

For his part, Mansfield now has a summer off. His new job at Citi looks similar to his old job at Deutsche Bank and to his old job at Credit Suisse before that, except that the Citi role also includes UK M&A (a role Citi curiously just hired Ord for). Presumably, therefore, Mansfield moved for more than just a promotion. For his part, Raghavan is likely to keep hiring. At the investor day in May, he said Citi had already hired 60 MDs since the start of 2025 and that it was targeting another 15% increase in MD headcount. "Quality over quantity of hires will be our focus," Raghavan revealed. Deutsche may want to keep a close watch on its best people. 

Separately, private equity firm Thoma Bravo has made the biggest private equity loss since 2008.

The Financial Times notes that Thoma Bravo has lost the entire $5bn it invested in Medallia, which makes chatbots. Orlando Bravo, the 55-year-old tennis playing founder of Thoma Bravo, is saying semi-contrite things like. “You always learn from mistakes. It was a big mistake.” And: “We were moving really fast during that time . . . We underwrote really fast growth and in hindsight we paid too much because that growth didn’t materialise.” 

When Thoma Bravo invested in Medallia in the fast days of 2021, it was saying something very different, though. Five years ago, Scott Crabill, a managing partner at Thoma Bravo, said Medallia had become "become mission-critical in a rapidly expanding universe of structured and unstructured data." And Peter Stefanski, a principal at Thoma Bravo declared that they were "excited to support Medallia as it continues to capitalize on a massive, growing market opportunity.”

What went wrong? Partly rate rises. Thoma Bravo financed the Medallion acquisition with $1.8bn of debt alongside its $5bn of cash. When rates rose, Medallion resorted to further borrowing to meet the interest rate payments. It was AI, too though. - There are fears that Claude might be better able to do the work of Medallion's chatbots.

It's worth noting, then, that back in 2021, Medallion was also seen as an AI play. It was just that Medallion's AI was "proprietary." That doesn't count for so much anymore. Stefanski has since left Thoma Bravo for another fund; Crabill is still there, nursing the loss. 

Meanwhile...

Private credit firms lent money to private equity funds like Thoma Bravo on the basis of an "equity cushion" or the belief that because PE funds were investing their own money into companies where they could cut costs, it would be safe. (FT) 

Clients are using AI to compare pitches from different banks and to ask more technical questions. AI may reduce the fees bankers can charge. (WSJ) 

Finance and insurance jobs in London are up 18.7% to about 464,000 in the decade to March. In New York the numbers directly employed in financial services grew almost 12% to 515,700 in the decade to April. (Bloomberg) 

How SpaceX got its stock to pop. A small float, constraints on short sellers like hedge funds who are afraid to sell it quickly for fear of being locked out of future issues by banks, staff lock-ups which conveniently expire just as SpaceX is admitted to indices. (Axios) 

SpaceX shares fell 3.6% yesterday. (Bloomberg) 

Now bankers at Citi, JPMorgan, Goldman Sachs and Morgan Stanley are helping SpaceX sell a $20bn bond to refinance a temporary $20 billion bridge loan that matures in September 2027. (Bloomberg) 

JPMorgan staff won't be using Anthropic in Hong Kong either. (FT) 

AI can choose what to invest it but it can't choose how much risk to take. 'The AIs all took far too much risk for the objective we gave them.' (Elm Wealth) 

Accenture stock fell 14% after it said bookings dropped 3% in local currency terms. AI is to blame. (Financial Times) 

Gen Z traders are buying call options on large cap stocks. “A 10% return will be a little bit nicer with higher capital to start. But for what I’m trying to do in my financial goals, I had to see much higher returns than that.” (Bloomberg) 

Ex-Goldman Sachs CEO says 98% of its his portfolio is in risky assets and that he trades every day using his iPad and a phone. “Right now, I’m very heavily focused in tech and have been for a long time, for good reasons.” (MarketWatch)

As fitness biomarkers and peptide stacks become part of upper-class conversation, people can more easily rank themselves against others, turning health into a comparative status marker. (Derek Thompson) 

Michael Truell, the 25 year-old founder of AI coding Cursor, which was just sold to SpaceX for $60bn, trawls GitHub and X to identify top engineers, then puts candidates through multi-day "work trials" at his offices. (Business Insider) 

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