Morning Coffee: Former Lazard banker accused of still being salty after 30 years. Goldman banker had a career ending side hustle
Over the last few years, William Cohan of Puck News has written several articles about Saks Global, a leveraged luxury retailer which has generated quite a few fun stories for people who like reading about high yield credit machinations. Now, however, Puck are being sued by Saks, in a complaint which alleges that he may have been motivated by an ancient grudge.
The company is owned by investors including Rhone Group, a private equity firm which was founded by two former Lazard bankers. William Cohan also worked at Lazard in the early 1990s, and the complaint alleges that he “worked with” the Rhone founders, before getting fired, and (after a subsequent career at Merrill Lynch and JP Morgan) writing a warts-and-all history of Lazard. Basically, they’re suggesting that this historic bad blood represents a conflict of interest which should have been disclosed when he wrote about a portfolio company of his former colleagues.
Particularly since the complaint doesn’t appear to be readily available, there’s not much point commenting on its substance. (Puck apparently “stands by its reporting and looks forward to defending against this meritless suit”). But it’s interesting to consider the general question; to what extent is the world of finance shaped by long-held personal beefs?
And as far as we can tell, the answer is “much less than you would think”. Banking is a business in which what goes around comes around and one in which yesterday’s competitor could be today’s client or tomorrow’s boss. It’s a world in which the stock doesn’t know that you own it, the market has no memory and the phrase “no tears” is iconic.
This is even supported by scientific research. Sociologists studying investment bankers were so shocked at the extent to which everyone disassociated their sense of self from their work that they coined the word “teflonic” to describe the tendency to let things slip away. Although it is not wholly unknown for people to pursue long term grudges for perceived slights, it’s uncommon, and it’s definitely viewed as unprofessional and weird.
Of course, this might just mean that bankers are more than usually sneaky about pursuing their grievances. And the line between personal umbrage and professional assessment is not always clear. When a senior banker at Morgan Stanley, for example, said that “it will take an awful lot to convince me” that the entrepreneur Mike Ashley should become a prime brokerage client, it certainly seemed to many outsiders that the decision was, to put it tactfully, over-determined.
But even when there are no possible consequences for doing so, and when everything’s long in the past, bankers seem to be unusually reluctant to dig up old scores. That’s one of the things that makes their autobiographies such generally mediocre reading.
Elsewhere, over his 30 years at Goldman Sachs, Alvaro del Castaño, has “helped drive strategic initiatives and deepen client relationships throughout the business” and “served as a valued leader and mentor to several across the firm”. For several of those years, he’s also written a regular column for a website called The Objective, including some quite frank opinions on the President of the USA’s “poor manners, self-centredness, lack of scruples and morally questionable nature”.
And that might be part of the reason why the heartfelt tributes listed above come from the memo announcing his retirement as co-head of Spain and Portugal. The journalistic side-hustle seems to have gone too – all of his articles have been removed from the Objective’s website, although you can still see some references to them on social media.
Goldman Sachs said back in March that they were not aware of Castaño’s articles, and confirmed that they do not represent the bank’s official views; they also don’t endorse his comments on “the sheer nonsense” of domestic Spanish politics. The official statement says that Castaño retired, while Bloomberg says that “senior executives made it clear he couldn’t continue, according to people with knowledge of the matter”.
The Objective is a Spanish-language only website, and Castaño never seems to have mentioned his connection with Goldman in his writing, so it is not at all impossible that the GS head office had never heard of it before be. And as to the question of why a senior banker wanted to publicly and volubly express his opinions on everything … well, to ask the question, in our experience, is to demonstrate that you haven’t met many investment bankers
Meanwhile...
The losses from the First Brands insolvency are beginning to be allocated – investment funds managed by Jefferies seem to have taken a hit, although not the bank itself. (FT)
Investment banking and private equity are tough enough, but Damola Adamolekun wanted something more challenging, so he has left Goldman Sachs and TPG behind to become, at the age of 36, one of the most sought-after CEOs in the world of chain restaurants. After a successful turnaround at PF Chang’s, he’s now taking on the challenge of Red Lobster. (Fortune)
You know a private equity firm is big when some of its ex-employees have family offices. You know a private equity firm is huge, like Blackstone, when its ex-employees’ family offices start launching their own funds with half a dozen advisors of their own, like Jefferson River Capital, the wealth vehicle of former CEO Tony James. (Bloomberg)
In terms of headcount, one of JP Morgan’s most important locations in Europe is by the seaside in Bournemouth, southwest England. (It’s also home to the Global Head of Custody, Hannah Elson). It’s now planning on spending as much as $500m on upgrading and expanding its site there, so fish and chips are decidedly on the menu. (Financial News)
The “green winter” appears to be on us, as Generate Capital is making layoffs due to a sharp downturn in US sustainable energy financing. (Bloomberg)
Apparently the hostile takeover of a church is called “steeple-jacking” (WSJ)
Have a confidential story, tip, or comment you’d like to share? Contact: WhatsApp: http://wa.me/442079977910 (+44 20 7997 7910), Telegram: @AlexMcMurray, Signal: @AlexMcMurrayEFC.88 Click here to fill in our anonymous form, or email editortips@efinancialcareers.com.
Bear with us if you leave a comment at the bottom of this article: comments are moderated intermittently by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. You must take sole responsibility for comments you post on this site. We will take reasonable steps to weed out anything that we consider to be offensive or inappropriate.
