As it turns out, the complete shutdown of the global economy is bad for the financial services industry. It’s worst for private equity, of course, but the rest of you shouldn’t be celebrating, unless you really hate private equity, in which case, carry on, Leon Cooperman.
Johnson sees the coronavirus hitting commercial bankers the hardest as a wave of defaults on all kinds of loans will punish retail banks and shrink bonuses by 25 to 30 percent.
Investment bankers, who have seen dealmaking stalled by the shutdown, will fare only slightly better, with compensation dropping from anywhere between 10 percent and 25 percent.
As to hedge funds, Johnson sees a drop from 10 to 15 percent…
“Looking around, a lot of people should see keeping their jobs as a bonus this year,” said one hedge fund trader. “Considering how badly some funds played the downturn, I’m shocked that bonuses are only going to be down 15 percent. I’d take that right now.”
Wall Street bonuses to shrink as much as 30 percent amid coronavirus [Thornton/N.Y. Post]