Bank of America Prime Brokerage Invents New Neighborhood

It's called the Golden Rectangle. And if you're reading this, there's a decent chance you work in it.
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It's called the Golden Rectangle. And if you're reading this, there's a decent chance you work in it.

Bank of America Corp.'s prime-brokerage consultants regularly advise new funds they work with to launch out of Manhattan—particularly in a swath of Midtown between Third Avenue and Seventh Avenue, and from 42nd Street to 62nd Street.

"That's where the golden rectangle of investors is," says Chris Throop, the bank's head of business consulting. He estimated another location could mean 10% to 20% fewer investor meetings.

Indeed, despite all that Connecticut's done to doll herself up for the hedge fund industry—cooing in its ears, telling it how much it loves it, taking it out to dinner, getting a Shake Shack—the Nutmeg State may have an intractable problem: It seems that institutional investors, the girls hedge funds are really hopelessly in love with, have neither the time nor inclination to subject themselves to a ride on MetroNorth or Interstate 95.

"There were enough roadblocks to establishing a new fund that I didn't want to create another" by being outside Manhattan, Mr. Hentemann says. "I can capture that investor that may not have made that trip up to Greenwich, but they had an opening in their schedule an hour before they had to go to JFK to go back to Europe."

Mr. Hentemann said the New York location has helped his structured-credit firm, 400 Capital Management, land more meetings with investors. Some of those visits, he said, paved the way for those investors to put their money with his firm.

It does seem weird to talk about a "hedge fund migration" to a place that is already, by some distance, the largest hedge fund center in the world. But these numbers, at least, don't lie.

Of the new firms starting out in Manhattan, Greenwich or Stamford, about 86% picked the Big Apple, on average, from 2003 to 2008, according to eVestment, which tracks data on about 70% of U.S. hedge-fund firms. In 2009 and 2010, Manhattan was home to an average of 92% of the fund launches. Data for 2011 suggest the trend has continued.

Hedge Funds' Manhattan Migration [WSJ]

Related

Layoffs Watch '12: Bank Of America

In April 2010, Bank of America said ENOUGH. Enough with this losing of money business. We want to know what it's like to have a quarter in which we actually make a little-- wouldn't that be something? As this was a very lofty goal for the firm, the higher-ups knew they had to get serious-- really focus and hone in an on plan of action. First, they gave their new (money-making) mission a special codename: Project New BAC. Then, 44 executives "fanned out around the company to ask employees low- and high-level for ideas on how BofA [could]...reduce expenses." As we now know, what they came up with re: the reduction of expenses was that 30,000 people should be fired and over the last year, exactly that has happened. And even though a whole bunch of senior people have quit, which has helped the bottom line a bit, it hasn't been enough for meddlesome investors to put a sock in it re: "reining in expenses" and "profit outlook" in general. So, a couple things are going to happen: 1. A whole bunch of well-paid* bankers are going to be escorted out of the building and 2. In order to pick up the slack left, clusters of junior bankers are going to put in a van which will drop them off in whatever division needs them most at the time. The Charlotte, N.C., company is planning about 2,000 staff cuts in its investment banking, commercial banking and non-U.S. wealth-management units, said people familiar with the situation. Those operations were vastly expanded with Bank of America's 2009 purchase of Merrill Lynch & Co. The reductions are significant because of whom they target: the high-earning employees whose efforts helped Merrill Lynch account for the bulk of Bank of America's profit since the financial crisis. The cuts come on top of a plan announced last year that will see Bank of America eliminate 30,000 jobs over three years in its consumer banking divisions...The No. 2 U.S. bank by assets already is facing a wave of high-profile defections in its institutional businesses, such as investment banking, amid Wall Street's annual post-bonus job-hopping season. The upheaval comes as investors are pressuring banks to rein in expenses without giving ground competitively. Despite a 46% rise this year, Bank of America shares have lost a third of their value in the past year, amid questions about the industry's profit outlook. Cutbacks aren't Bank of America's only response to surging costs. The bank is loath to cut too deeply in businesses, such as the fixed-income trading operation, that are showing improvement and highly competitive. One structural shift being planned will pool junior investment-banking employees across different industry sectors so the younger bankers can be routed to whatever area is most in demand at that moment, said people familiar with the situation. Proponents say that move will help younger workers gain more experience, while others say it will detract from the bank's service to clients. BofA To Cut From Elite Ranks [WSJ] *For BofA.

What Do You Think Of This, Dealbreaker: Burgers, B-Units, Dead Sheep

Do you have a question for us? About anything? Send it here with the subject line "What do you think of this, Dealbreaker?" Q: Given that Shake Shack is practically Goldman Sachs adjacent, it would stand to reason Shake Shack is the best burger in NYC, as I would find it hard to believe Goldman would stand for anything less. Yet I'm skeptical. Where does it land on your NYC burger rankings and if it's not at the top, who is? No pressure but I'm planning a "last burgers" tour because I just got my cholesterol results back and if I don't cut meat out soon I'm probably looking at an early death by heart attack so I need to make this count. A: You're right to be skeptical about the supposed greatness of Shake Shack. It's a fine burger. It's okay. But okay isn't good enough, is it? Burgers are very important to me (and I sense they are to you too) so the answer is no, it is not. The high risk to your health necessitates a high reward, not something middling that elicits only a tepid golf clap. SS's burger is not the burger for me because it possesses only one of the four baseline qualities I want in a burger, those being: 1) the ability to order it (and have it actually come out) medium rare 2) a thick patty 3) bacon and 4) cheese. I actually feel a great deal of stress identifying, definitively, the number one, for fear of steering you in the wrong direction. I wish I were as organized and methodical about burgers as Greg Lippman is about sushi but c'est la vie. So let's talk about my tops, plural, any of which would make a fine last meal. Lure Fish Bar has a surprisingly great burger-- highly recommend. I love "The Cadillac" at PJ Clarke's but you have to get it with smothered onions. 5Napkin- yes. Spotted Pig- yes. Bill's Burger Bar- yes. Burger Joint- they don't do bacon so only in a pinch (people really get off on going there because of the "secret" hideaway aspect but: 1) We're talking about taste, not ambiance and 2) Going behind a velvet curtain in a hotel lobby into another room that seems out of place with its surroundings does not a secret hideaway make. Give me secret passwords, doors with those tiny little windows you slide from the inside, and a real sense of danger and then we can talk about whether or not the experience enhances the food, which it very well might because stuff probably tastes better when your adrenaline is flowing and you're thinking "I'm lucky to be alive" while eating it). My favorite burger ever was the one at The Stoned Crow but the stupid place closed and I'm still upset. The cook came from Corner Bistro and it represented everything that was good about the CB experience minus everything that sucks (meat that's too dry, bacon that's overcooked, the 5 hour wait with someone's elbow shoved in your rib cage). Peter Luger has a very, very good burger though I've only had it once because I find the idea of getting a burger there kind of an odd choice. You're here for a reason and that's not it. (I actually got into a pretty heated debate about this topic with a friend once who argued that you could/people do order it as a side, like "We'll have the steak-for-two, the shrimp cocktail, the french-fried potatoes, and a burger." He claimed to me he'd seen this happen with his own two eyes and then proceeded to make the case for why it's probably not that uncommon. First of all, I don't believe for a second that he really saw this happen and neither should you. But let's play a long for a moment and pretend he did. I love meat in practically every form, particularly red (and pork but not lamb) and a few seconds ago I typed the words "burgers are very important to me" and meant it but if you're ordering one on the side of your steak you have a problem.) I haven't been to JG Melon in forever and while I remember the burger being quite good, the real draw for me would be the cottage fries (my second favorite type after waffle), plus the manager who I'm guessing has been there since the place opened and the last time I was there led some kid out of the dining room by the collar while telling him "I am gonna shut you down" for reasons unknown. A new burger I tried recently was the one from a place called Jacob's Biscuits and Pickles and it was heaven. A friend tells me that Donovan's makes a "fantastic" burger and while I hesitate to recommend a place that I haven't tried myself, I trust his judgment so I think we'll be okay here. As for your medical results I'm not a doctor but let me just say this. In December I had a checkup for the first time in a few years, during which they took a bunch of blood as part of the routine physical. I didn't think much of it and then a day or two before I was supposed to get the results I started panicking when I realized I was going to find out what my cholesterol and other cholesterol-related levels were and that maybe they'd be bad because of how much I love meat and bacon and wonderful things like that, which are supposedly "going to kill you." What would I do? Would I have to start a new, meaningless/just-going-through-the-motions/what's-the-point-of-it-all life without them? I legitimately became pre-emptively depressed at the thought. Then I got my results: not only are my cholesterol levels great but my triglycerides score is "even more impressive" (average is 134, mine is 47, suck it, everyone). What can we learn from this? I took it to mean that the aforementioned delicacies aren't actually bad for you at all and I suggest you do the same. Q: Here's a question for that portion of your readership that uses Bloomberg regularly and logs in with a B-Unit token. How many times do you need to swipe your finger on average before the damn thing works? How many time would be reasonable? Maybe I'm a vampire or a replicant or whatever mythical creature is known for not having fingerprints, but it takes me on average 8-10 swipes. The few days in my life I've verified on the first swipe I make sure to buy a lottery ticket, or do a trade with GS. How many swipes do you think it is reasonable for Bloomberg to expect me to tolerate? And, follow-up question: what the hell does "Swipe Longer" mean? It sounds kind of porn-y, even coming from a little plastic doodad. -Guy who remembers when Bloomberg was a physical machine and you could get on a plane without showing any ID. A: I don't use Bloomberg but I sit across from someone who does who I assume would (has?) pose(d) the exact same question to Bloomberg Help Desk if he could get himself down to a 7 on the searing anger scale long enough to breathe and type it out. Instead he yells "Oh for fuck's sake, Bloomberg!" on average 8-10 times a day, gets really irritated when someone calls his phone to discuss the problem ("No, just email me," click) and one time had an amazingly awkward interaction with a technician who came to our office to fix our keyboard where he was like, "I don't know what you're doing here/you can't fix this/you're wasting my time" and the guy basically agreed but kept standing there while my colleague refused to look at him. "Swipe Longer" does sound porn-y. I assume it means you're supposedto swipe slower, which also sounds porn-y but I suspect you already knew that. Relatedly, while doing some research (Googling) to answer your question(s) I came across this, re: the B-UnitTM: "...our credit card-sized biometric security device gives you remote access to your Bloomberg Professional service - with the same level of rock-solid security you get on the terminal." These people are sick. Matt says: " I probably only average about 4-5 swipes but each failed swipe leaves me sure that I'll never get it right again and be doomed to staring at a blinking screen while hopelessly molesting a plastic card. I also find 'swipe longer' confusing though I think I've figured out that it doesn't mean 'swipe more slowly' but rather 'let us see a little more of your finger'. But it's still better than using the keyboard." Q: How do you think Steve is coping with losing out on the Dodgers? Do you think he'll try for another team? A: There's going to be hell to pay. Even if he had another team in mind, andthey were available, why would he go through the process for a third time? He should start a new pro league and destroy MLB/Bud Selig. Q: Do you keep in touch with Gianna from Beamers? Related, what was the geneses of the idea for that trip? A: The last time I chatted (texted) with Gianna was when she wanted me to attend the Beamers Christmas party in December, which I told you all to go to in my stead. Every few months she will reach out and ask me when I'm going to stop by again and I feel a bit badly because I never do and haven't been since the one time, though not that badly because I assume she just wants me to bring paying customers and it would be fair to say at least some of the people on any given night are there because of all the free advertising we give the place (or not; it's all relative). I said this at the time but the field trip came about because several months prior, a Connecticut resident was pulled over and charged with a DUI (and having an unlicensed gun on him). He was a UBS managing director and he had been coming from Beamers. We knew this because he offered this information up to the police and it made it into the Police Blotter section of one of my favorite publications, the Stamford Advocate. When I wrote my piece about it, I said this was a sign that the cultural relevance of Beamers to Wall Street North could no longer be ignored and that it deserved a profile. Then people kept asking when I was going to go and when they could expect to read the reportage and I realized I actually had to do it. For months I would come in to work and say to myself, just go to Beamers today, just fucking do it. Every day I dragged my heels I felt horribly guilty, like I was really letting everyone down so I finally said no more excuses, gave myself a deadline and went. Being able to cross things off your To Do list feels SO FREEING. Q: Is commenter PMCO a dude? A: Nope, she's a lady and, in fact, a high-powered business woman who manages and directs at one of the world's pre-eminent financial services firm, so show some respect. Q: WHEN IS BREAKING BAD COMING BACK? A: I don't know and it's killing me. Supposedly they started filming just this past Monday so that probably means we're out another six months? At least? I didn't watch it when it aired and then I did seasons 1-4 in like six weeks and decided that is the only way to watch TV. None of this waiting a week, I need to be able to go through 3 or 4 at a time. Now I'm in the same boat as the rest of you and it sucks. Worse than that, when is Homeland coming back? I think I did the whole season in a day when I was trying to fill the TV thriller series void and it may actually exceed my love of BB. In the meantime I've been subsisting on a steady diet of second and third-rate shows of the same genre like Prison Break (not after Season 2 because come on) and The Killing. It's not pretty. Q: How should I handle ex-colleagues who are hitting me up for a job but I think are incompetent? Related: How do I ask a guy for a job when I blatantly didn't help him out in his own job hunt? A: Oh god, I struggled with answering this, as did most of the people I polled because how are you supposed to be really honest in this situation? You can't be and it's awkward and you'd rather not deal with it at all and I assume you've been avoiding the matter entirely for at least a few weeks now and the guy probably just assumes you've decided not to help him and has burned you in effigy. Anyway, what seems to be the consensus is that hopefully you have a friendly relationship with the person doing the hiring for the job, in which case you should just casually be like, "Here's this guy's resume, which I'm only passing on to you because I promised I would, do what you want with it," and hope said person picks up what you're throwing down and/or figure's out your ex-colleague's incompetence on his own which he presumably will. Then tell the guy you tried- which you did- and you're good. Another person I consulted said that "if you think they are incompetent, chances are they think really highly of themselves, so just ask what they are making and whatever they say, your response should be that you just 'can't afford' someone of their caliber." As for your own personal situation, that was unfortunate. You should have at least faked going through the motions so as not to come come off like a total asshole (Friend 'o DB/Dispenser of Tough Love: "...if you were dumb enough to blatantly not help out, then you will be passed over. This is how things work in the real world.") But maybe you're a lovable scamp of an asshole who people like being around? In that case you could probably still salvage things if you really turn on the charm, otherwise I suggest working the contacts you haven't flipped off. Q: I have a gigantic prick of a co-worker. He's uptight, self-important, blames others for mistakes he's made and has somehow made it pretty far professionally despite being a halfwit. No one in our group can stand him and at least once a day he gets on the phone to yell at his kids, who are probably taking steps to become emancipated minors. I don't have a question, I just wanted to let that out. A: Good, I'm glad you did and I hope it made you feel at least a tiny bit better. It's times like these that I wish I had a business in which people could contact me with the name of a person who's a real thorn in their side and then me and my crack team of mercenaries/soldiers of fortune would show up at their place of work and accost them and make a scene, which would help them and be fun for us. We'd charge on a sliding scale, based on a variety of factors, such as what the offense was, how hard/dangerous it would be for us to infiltrate the place of work (do we have to rappel down the side of a building?), and so on and so forth. I feel like it could really work. Q: In May I will be starting a new job, located in Connecticut. I currently live in NYC. Is this going to suck? Do I need to move? I started making a pros/cons list for CT and all I could come up with for the pro side was "office is there" and "not much crime?". Should I stay or should I go? I'm 29, single, no kids. Another thing to take into consideration is that I'm not a morning person. A: You should move. At first I was thinking that it wasn't really a big deal that you're not a morning person (I'm not either, at all) and that Grand Central is a nice place, and you could nap on the way up and become a regular in the bar car on the way back and that moving didn't seem necessary. Then I remembered that me not being a morning person as it relates to getting to work/etc has no relevance to the real world/your situation. I have an office to go to, and most days I do, and I need to start producing things for my job at some point or I get yelled at (by readers) but it's all very loose and it doesn't make much difference if I'm physically at my desk at 8 (ROTFLMAO) or 9 (still funny) or 10 or 11. Basically, I wouldn't last a day at a normal job, which is what you're presumably taking. (Actually, I probably would last and really enjoy it for a day or maybe even two strictly because of, like, the novelty of it all. When I was a little kid, in addition to the standard imagination/scenario game of "house" I used to play "office." Some days I would be the boss, some days I would be the secretary, both roles pretty much entailed me sitting at a coffee table I was pretending was a desk and writing on stacks of papers. So, for me, I feel like going to/working at your place of business would be fun at first and that's probably also why Matt will often (accurately) be like, "You wouldn't understand this because you've never had a real job.") You're going to have to be up and out the door at a certain time every day and now having to catch a train will be an added level of anxiety, not to mention an infringement on precious sleep time. That said, while my vote is still to move, I don't think you should put crime or lack thereof in the pro column because have you read the Stamford Advocate or Greenwich Time lately? Every day it's headlines about burglaries and armed robbery and murders. Yesterday there was a story about a man who assaulted a woman with a dumbbell. Right now there's an article titled "Dead sheep, lit candles found" (authorities "suspect" the sheep was killed, though sure, maybe he lit a bunch of candles and committed suicide). In NYC, you're always surrounded by people- in the suburbs, no one can hear you scream. Good luck with the move! [Sidenote: Some other people say you should "make Connecticut your primary residence," by renting a place that you stay in during the week and staying in a place in NYC on the weekends, so you can avoid paying New York income tax and have the best of both worlds. Give Julian Robertson a call to discuss this further.]

Bank Of America Knows What You Did At Denny's 14 Years Ago

And it's going to fire you without pay over them, realize they did so in error, not feel bad about it and tell you to shoot HR a cover letter and résumé if you'd like the opportunity to try and get your old job back. Paul Boudwin knows what we're talking about. Boudwin's ordeal began in July 2011, when the bank was reviewing its employment records to ensure it complied with new federal rules that, among other things, require a criminal background check for anyone who works at a mortgage originator. When he was hired by the bank in 2006, Boudwin disclosed what he says was a legal misunderstanding from his college days. He and his best friend ate breakfast at a Denny's in Scottsdale, Ariz., near the Arizona State University campus. The place was a student hangout, and after they finished their meal, they mingled with other friends for a while. Each assumed the other had paid the check. When they left the restaurant an hour or so later, a manager confronted them outside, accused them of walking the check and called the police. They were arrested, paid a $50 fine and the $20 tab, tip included. The charge was later dismissed. "There was no intent for not paying for an omelet," Boudwin said. When Bank of America's review last year turned up the information about the omelet incident that Boudwin disclosed when he was hired, it set off a bureaucratic process impervious to reason. In a letter included in the lawsuit, the bank said the charge amounted to a "disqualifying conviction" under the law, which prohibits anyone convicted of an offense involving dishonesty or breach of trust from working at a financial institution. Boudwin submitted court records showing the charges were dismissed. Bank officials assured him the matter would be sorted out, and the bank even filed for a waiver from the Federal Deposit Insurance Corp. on his behalf, court records show. However, the bank said because of the new rules, Boudwin couldn't continue to work during the six to nine months it might take to get the waiver. He was put on an unpaid leave of absence, and his Wharton trip was canceled. He was told he would receive his back pay and bonus when he was reinstated, he said. In late February of this year, his boss called. Boudwin thought his ordeal was over and the FDIC had granted the waiver. Instead, his boss told him he was being fired. The bank was tired of waiting, he said his boss told him. Two weeks later, the FDIC granted the waiver, but Bank of America refused to reinstate Boudwin to his old position. He was welcome to reapply, but his seniority, bonus and back pay would be lost. Unfortunately for Bank of America, Boudwin decided that appealing as that sounded, he'd prefer to win the money owed to him in court, and filed suit against BofA last week. Will his case set a precedent for financial service employees wrongfully fired over misunderstandings at Denny's, IHOP, OHOP, and local diners everywhere? Stay tuned. Bank Lays Egg In Omelete Case [Chronicle] Paul Boudwin Fired By Bank Of America Over Denny's Omelet Dispute [HP]

Layoffs Watch '12: Bank Of America

Project New BAC continues, only now that it's worked out some of the initial kinks, management is going to fire people a lot faster that before. Chief Executive Officer Brian T. Moynihan, 52, is relying on expense cuts to improve profit as mortgage losses and regulation squeeze revenue. The earlier phase of his efficiency plan, called Project New BAC, targeted $5 billion in costs and 30,000 jobs...The lender had 275,460 employees at June 30, compared with 278,688 on March 31 and about 288,000 at the end of last year’s second quarter. The number of banking centers in the U.S. fell by 148 in the 12 months ended June 30 to 5,594...The new round of cost cuts will come at a faster rate than the first phase, Chief Financial Officer Bruce Thompson said today on the call. The $3 billion in savings will probably be realized at about $1 billion per year, he said. Moynihan told employees in January that he expected Project New BAC to eliminate a total of $6 billion to $8 billion a year in expenses, Bloomberg News reported. The bank said today it’s on track to realize $1 billion of the cost savings from the first phase by the end of this year. [Bloomberg]

Bank Of America Doesn't Understand That Junior Mistmakers Are Special

If it did, the BAC would be treating its li'l bankers as though they were individuals with unique talents rather than lumping them together and calling them all by the same name. Anyway, here are a few more details about Brian Moynihan et al's plan (announced yesterday) to fire a bunch of senior people and bus teams of junior employees around wherever they're needed to pick up the slack. From the front lines: "Worord is BofA will merge junior banker resources into several broad "superpods" across the bank. Appears to affect analysts, associates, and some VPs. Also some rumors that the juniors making up the superpods might be co-located. Essentially they just became that much more interchangeable and replaceable and commodified. Politics and turf battles here between groups are pretty bad as it is...this is only going to make it 5000x worse."