When President Trump congratulated Citigroup (prematurely) for its success in the M&A rankings two weeks ago, it was a bit embarrassing – someone had misread a sectoral league table, and they’re quite a way behind Goldman Sachs, in the middle of the top ten. But it must also have gladdened the hearts of Citi executives even as they blushed. In an environment where governments are gaining in importance and politics is driving markets rather than vice versa, it has to be good news that the President thinks you’re worth a high-five.
Credit for the new relationship between Citi and the White House seems to go directly to CEO Jane Fraser. While JP Morgan is getting sued for past account closures, Brian Moynihan got snubbed at Davos and David Solomon got told to “focus on being a DJ”, Fraser is a regular attendee at Trump’s events with British and Saudi royalty, often as the sole representative of Wall Street. She’s building good professional relationships further down the Republican administration and is a “frequent texter” with senior officials.
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What’s the secret? Part of it might be that President Trump has just learned to trust forceful and intelligent British women. In his first administration, Fiona Hill was a valued advisor, while the title of “Trump-whisperer” was originally coined to describe Karen Pierce, the former ambassador. It also can’t hurt that having grown up in Scotland, worked while young as a caddy and once played a round against Tiger Woods, Fraser is able to talk convincingly about the President’s favourite sport.
But there is obviously more too it than that. Jane Fraser was popular with the Biden administration too; she was on the Export Council and was the only CEO to accompany him to G7 talks in Japan. People observing the White House note that Citi has been taking the lead in industry trade associations, and that it’s been unusually flexible in managing the sharp switch in policy from DEI, ESG and Net Zero to their polar opposites. The bank also has a comparatively large budget for political lobbyists, which is a fine way of making friends.
Jane Fraser also has a strong incentive to maximally befriend the administration. Before she came in as CEO, Citi had got itself into a pretty bad state with respect to its relationships with the regulators. It still has some constraints on its growth dating back to consent orders made by the Fed and OCC back in 2020. So the stakes are higher. Some people worry that building such a close relationship with the current administration might bring its own problems in the future (indeed, some people say it’s causing problems, albeit less serious ones, right now). But for the time being, Jane Fraser appears to have achieved what no other big bank CEO could quite manage.
Elsewhere, the joke about Elliott Management was always that it was not so much a hedge fund as “a law firm with a Bloomberg terminal”. Although it’s more associated today with activist equity investing, the firm really made its reputation in distressed credit, and by being really good at reading the detail of loan agreements. It was also famously aggressive and willing to back its legal judgement; famously, during the sovereign bankruptcy of Argentina, it was Elliott which managed to impound and repossess a ship from the Argentine Navy.
As one employee put it, working in a place like that teaches you “how to prosecute a wide variety of weird and hairy and messy situations”. Paul Singer has referred to his investment style as “manual effort”, often putting as many as 50 employees on to a single holding to work out – or force – the most profitable outcome.
But unlike a law firm, it’s not a matter of “up or out” in terms of a career at Elliott. It’s more like “up and out”, as there are at least seven hedge funds founded by Elliott alumni. (They’re like “Tiger Cubs” but without the cute name; although “Little-o’s” is an anagram it hasn’t caught on yet). These firms don’t seem to invest in exactly the same way as Elliott – as one of them points out, you can’t do that, it’s too expensive. But they have a common style. And even better, it’s a style that doesn’t look like it’s going to get overtaken by AI.
Meanwhile …
Fire the guns and start the race! Barclays aims to have one single lead banker for each of its most important clients. As with anything in banking, this is a great idea until you discover that there are two people who want the same position, at which the uneasy co-head structures start to come back. It appears that the Barclays model will also involve taking on responsibility for any credit or legal risk associated with the client, though, so bankers might want to pick their roles carefully. (Bloomberg)
Igor Tulchinsky of WorldQuant once hired someone after an interview that consisted of the single question “what do you want to do?”. (Spears WM)
The stuff of nightmares for ECM bankers. After getting into the syndicate for the SpaceX IPO, Mirae Securities of Korea seems to have misunderstood the book-building process, forgotten to file its final orders and left its clients with no stock allocated. (Bloomberg)
The “Salami Incident”, a FINRA dispute between JP Morgan and one of its advisors over an expenses claim for a deli platter, appears to have grown into an industry-wide lobbying effort. The banking industry is unhappy at the level of compensation awards that the arbitration body seems to routinely hand out. (WSJ)
Deutsche has added space, Citadel has set up a new office – despite the war, and associated predictions of doom, Dubai still has a shortage rather than a glut of prime offices. (Bloomberg)
In the early days of Barclaycard’s offices in Northampton, you had to sit in rows wearing a suit and tie, and to put your hand up if you wanted to go to the bathroom. Now most of the employees work from home. (BBC)
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