Welcome to Wall Street Insider, where we take you behind the scenes of the finance team’s biggest scoops and deep dives from the past week.
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Accenture is cutting US staff, and top execs just warned of more pain to come as the consulting giant promotes fewer people and looks to control costs, Meghan Morris and Dakin Campbell first reported. Their story got a lot of attention this week, and for good reason. It could be an indicator for how the firm’s own clients are weathering a downturn, and consulting likely won’t be the only industry to feel the crunch.
We also took a look at who’s most at risk once Wall Street kicks off the tidal wave of layoffs many banks had put on pause — and why boutique firms without a strong restructuring practice could be “dead in the water,” as one recruiter put it.
Dakin along with Casey Sullivan got an inside look at Egon Durban, who became co-CEO of Silver Lake Partners in December. They spoke with more than 40 people who have worked with Durban, or across from him on deals, to understand his rise at the tech-focused private-equity firm he joined as a young banker in 1999.
Read the full story here:
40 insiders reveal the meteoric rise of Silver Lake’s Egon Durban, the tech-focused PE firm’s No. 1 dealmaker who strong-armed his way to the top and is about to get $18 billion more to invest
Keep reading for a look at why one of the earliest forms of alt-data is breaking down; a rundown of Amazon’s rapid-fire moves to scoop up warehouses; and a deep dive into the culture at BTIG.
Have a great weekend,
Meredith
Inside BTIG
Samantha Lee/Business Insider
The financial-services industry has tried to clean up its image in recent years, but shades of an earlier era on Wall Street have lingered at the firm BTIG, a Business Insider investigation by Nicole Einbinder and Rebecca Ungarino has found.
Read the full story here:
Former employees say BTIG had a toxic party culture that was stuck in the ’80s
Why alt-data fans are struggling
Crystal Cox / Business Insider
As Dan DeFrancesco and Bradley Saacks report, one of the earliest and most popular forms of alternative data is proving more difficult to handle these days. Investors like hedge funds have long leaned on credit-card data to uncover everything from new retail trends to the health of specific businesses.
But the pandemic has transformed shopping habits and made data unreliable. Vendors have been forced to do more hand-holding with clients, while banks are using techniques like post-stratification weighting and “swarming” to help make sense of the information.
Read the full story here:
Credit-card data is broken. Here’s how hedge funds and banks are being forced to rethink one of the earliest alt-data plays.
Amazon adds to its warehouse empire
Mark Lennihan/AP
As Dan Geiger reports, Amazon just signed its largest lease ever in New York City. It’s also negotiating to lease a 620,000-square-foot office and warehouse space in Red Hook, Brooklyn, that is under construction, a source with direct knowledge of the negotiations told Business Insider.
The moves mark the latest in a dramatic expansion of the $1.3 trillion company’s logistics operations — which serve as the backbone for Amazon’s booming e-commerce business.
Read the full story here:
Amazon just signed its largest-ever warehouse lease in NYC. Here’s how it’s been making deals left and right to grow its massive storage and distribution network.
What’s next for buy now, pay later fintechs
Buy now, pay later, also known as point-of-sale financing, has been surging as consumers shift their spending online. Fintechs like Affirm, Afterpay, and Klarna are now looking to expand beyond their installment-lending roots. Affirm is exploring more financial products with the launch of a high-yield savings account, and Klarna just rolled out a loyalty program for users.
As Shannen Balogh reports, with growth comes new challenges, like managing consumer credit at scale. The fintechs could start looking for partnerships with banks, or find themselves to be acquisition bait.
Read the full story here:
From Affirm to Klarna, buy now pay later startups are booming. But experts warn juggling explosive growth with responsible lending is a tricky balance.
FA recruiting is transforming
portishead1/GettyImages
As Rebecca Ungarino reports, elements of virtual financial adviser recruiting will stay with the industry post-pandemic as wealth management firms have adapted during remote work.
“All of this is going to be much easier to move advisers, clients; all of this happening together is going to support a whole lot more movement,” one veteran adviser recruiter said.
Read more:
On the move
Citigroup
Citigroup has poached a top exec from Wells Fargo to run operations and anti-fraud within its Global Consumer Banking division — a unit that has been remodeled over the past year with ambitions of growing revenues and better competing with other top US banks.
Titi Cole, previously EVP and head of operations and contact centers for the consumer and small business division at Wells Fargo, will join Citi in August as head of global operations and fraud prevention in the consumer bank, according to memo from Jane Fraser, president of Citi and CEO of GCB.
Banking
- Goldman Sachs designed its glitzy London office with tons of amenities, but little parking. In a post-pandemic world, it could be a big snag as the firm looks to bring workers back in.
- The 6 biggest US banks granted over 5,000 H-1B visas last year. Here’s how firms like Goldman Sachs and Wells Fargo are reacting to Trump’s shutdown.
- Google Cloud just poached a long-time Citi exec. Here’s why public-cloud giants keep adding Wall Street veterans to their ranks.
Deals
- We talked to Mastercard’s incoming CEO about why the card giant is spending $825 million to buy financial-data startup Finicity and how it compares to the Visa-Plaid deal
- Simon Property is at the center of 3 big legal battles as stores finally begin to reopen. Here’s what the future holds for the biggest US mall REIT.
- SoftBank’s Vision Fund is scrapping an ‘IPO readiness group’ and telling its portfolio companies to handle the process themselves
Real estate
- Accenture backtracked on cutting its real-estate footprint — and now it’s warning companies about ditching offices and going all-remote
- How flex-office players like Serendipity Labs and Convene are trying to win over remote workers.
- Washington DC’s office market is normally recession-proof. Here’s how things could play out this time as vacancy rates soar.
- WeWork is ditching a major Manhattan office, and it’s the first big step in a turnaround that’s put its entire real-estate portfolio under review
- New York’s commercial real-estate industry is concentrated in the hands of rich white men. One of the few Black brokers to rise through the ranks says top brokerages should emulate the construction industry if they’re serious about diversity.
Wealth management
Hedge funds and investing
- The head of Point72’s Cubist quant-trading unit is joining one of billionaire Steve Cohen’s top competitors
- Macro hedge funds are back in demand as investors look to ride out market volatility. JPMorgan lays out why the surge in interest won’t be short-lived.
- Billionaire Bill Ackman says he thinks of Pershing Square more like a private-equity shop than a hedge fund when it comes to hiring staff
- Leaked email reveals SoftBank-backed Oyo is slashing most US staff. Read the full message laying out details on stock options and the hotel startup’s 2021 outlook.
- Here’s how a huge investment in big data is helping the owners of the Philadelphia 76ers and New Jersey Devils make better decisions for their rosters, player development and coaching
Fintech
- Meet Spin: A new US live-commerce startup partnering with influencers and retailers to bring window shopping to your phone
- Read the letter a fintech-focused VC sent investors laying out why ‘hype rounds’ that drove ballooning valuations just won’t work anymore
- Here’s why small businesses are ditching their banks and turning to fintechs like PayPal and Plaid to navigate the complicated process of PPP loan forgiveness
- Insurance startup Jetty has switched reinsurers after it slashed staff and paused writing new policies during the pandemic
Markets
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