• 13 Apr

Deutsche Bank made a familiar mistake by appointing Christian Sewing CEO

Prabhu Friday, April 13th, 2018

Einstein’s definition of insanity was doing the same thing over and over again and expecting a different result. Dan Davies outlines why Deutsche Bank’s appointment of a retail banker as CEO of what is effectively an investment bank is the latest outbreak of corporate insanity in the European financial sector. The most egregious recent example was appointment of Anthony Jenkins as CEO of Barclays plc earlier in the decade. However some might say the template for this go-to management manouevre was crafted as far back as the late 1980s and the UK banks’ reaction to meltdown in their newly-established investment …

  • 13 Mar

The home front: managing home centre managers when augmenting

Darren Sharma Tuesday, March 13th, 2018

When introducing or upgrading an augmented research team, banks, asset managers and risk managers often hope that their home centre teams will automatically work out how to collaborate with these resources. In our experience of carrying out this integration since 2005, we have found that this is never in fact the case. Augmentation can happen offshore, in a city in your home country, or even with analysts who sit next to you.  The value addition of resources on offer to capital markets and risk management through augmentation has historically been at the low end. This is now changing. Imagine a …

  • 05 Feb

Outrage is right, but do you want to help solve the Presidents Club problem?

Darren Sharma Monday, February 5th, 2018

What happened at the Presidents Club quite rightly generated a howl of outrage from the real City, the proper City. Moving past that, how do you help solve the Presidents Club problem? The answer is easy, cheap and profitable. A group of men gathered at the Dorchester Hotel for a charity dinner. They were all rich, powerful men and the City is where the bulk got their money. A group of hostesses were hired on barely the London Living Wage, and many were harassed verbally and physically. Sex worker rates are considerably above this wage rate, so we know that most …

  • 04 Jan

Why a speech from Barack Obama is worth $400,000

Darren Sharma Thursday, January 4th, 2018

Analysts at Frontline are mentored by city veterans, who add front-end knowledge and on-shore experience to their output. This raises our research quality by several notches. Our senior equity research adviser Daniel Davies writes in the FT on banking culture, explaining why firms pay excessively to invite ex-politicians to events. What are these guys getting for their money, though? I understand why so many people threw so much money at the Clintons for “speeches.” They thought Hillary was going to be the next president, and they wanted to buy influence while she was in a position to peddle it. But …

  • 04 Jan

Where are your Analysts?

Darren Sharma Thursday, January 4th, 2018

As my friends of a certain age will understand, I often lose things. Do I lose things more than I did when I was a youth?  I’m not sure. But anyway, the solution is always the same – you need to know where things are. That’s not as easy as it used to be. Take for example “off-shore shore analysts.” Where are they? They are not sitting next to you, that is for sure. So, if you are in an office in New York, and you deal with an analyst in your firm’s London office, is that analyst off-shore?  No …

  • 04 Jan

What makes Frontline unique

Darren Sharma Thursday, January 4th, 2018

I was recently asked this in a meeting with a senior team from a global bank. It’s a great question and to answer it I had to go right back to beginning when I founded Frontline Analysts in 2005. Quite simply, its because I believe that with the right training, smart grads anywhere can be grown into proper City analysts. You don’t need to be sitting in the most expensive real estate in the world or being trained on the job by peers who should be focused on making profit.  You could be in Birmingham, Baltimore, Bangalore and get the same quality …

  • 04 Jan

What it takes to be an elite Indian MBA

Darren Sharma Thursday, January 4th, 2018

The Indian Institutes of Management (“IIMs”) are the premier management education institutes in India. The IIM building program was initiated by India’s first PM, Jawaharlal Nehru, so that India could have a cadre of global-level managers. The prospects of landing a job in an MNC, significantly higher salaries than post-graduates in other fields and an option to switch career track is what drives students to pursue an MBA from an IIM. Getting into an IIM is no cakewalk. Out of roughly 200,000 (yes, two hundred thousand) candidates who took the entry exams in 2014, the test for getting admission in …

  • 04 Jan

Training cross asset analysts

Darren Sharma Thursday, January 4th, 2018

As we start expanding our service range to cover equity, derivatives and risk as well as credit research, we have needed to expand our training and development programs to dvelop the skills of our analysts. Within the next couple of weeks we will be launching equity research coverage of some financial and technology stocks, written by two of our credit analysts; we’ve also produced a Thematic Alert to clients on all the investment opportunities turned up by the recent upheaval in the European banking sector. So for the last few months, I’ve been learning a lot about how you train …

  • 04 Jan

Trade press carries leaked report on MiFID II – what this might mean

Darren Sharma Thursday, January 4th, 2018

The Financial Times and trade press are carrying a story about a leaked draft of the MiFID II research rules. We have not seen a copy of the leaked documents yet, but from media reports, it looks like the state of play is this: The compromise position appears to have a role for CSAs “under strict conditions”. In our view, this is likely to be the “enhanced CSA” option, under which the payment for research is fully divorced from trading turnover. In our view, the only significant difference between such a CSA and a Research Payment Account is the VAT …

  • 04 Jan

The FT on creating City jobs in lower-cost locations

Darren Sharma Thursday, January 4th, 2018

The Financial Times wrote this week about a powerful new trend – locating jobs where they can be done most efficiently. Cost pressures are not new; nor are multiple locations. The new trend is that the distinctions between onshore and offshore are breaking down. The FT uses both Jacksonville (technically “near-shore”) and Warsaw (technically “offshore”) as examples of the same phenomenon – creating jobs in lower cost locations. https://next.ft.com/content/e1ece4fa-17ac-11e6-bb7d-ee563a5a1cc1   Global capital markets can only be strengthened by being efficient. In an industry which embodies efficient allocation of capital, there is no room for inefficient producers.   Once a bank becomes open-minded …