Succession -- Wall Street Style

Tidjane Thiam spent his last day as head of Credit Suisse. Just a couple blocks away, UBS is looking for a new CEO as Sergio Ermotti signals plans to step down this year.

Across the continent, Jes Staley, less than five years into his tenure as CEO of Barclays, is once again under scrutiny, with British authorities wanting to know more about the banker’s ties to the late Jeffrey Epstein. One of his top lieutenants left last year.

Meanwhile analysts are confounded by HSBC’s decision to keep searching for a CEO and not give the job to Noel Quinn, who’s been in the role on an interim basis since August. The bank has been reshuffling its top executives under Quinn.

A major succession question is hitting the largest European banks, and they all seem to have problems finding the right people to take over. Meanwhile, in the U.S., there are rising executives who seem to have nowhere to go. Morgan Stanley’s succession list has grown longer than five potential candidates, but James Gorman has no plans to step down. Jamie Dimon said this year that he’s staying at the top of JPMorgan for another five years.

He said the same thing six years ago.

“Very talented executives from the major places like JPMorgan, Bank of America and others who have not been tapped for the top of the organization may take over roles abroad,” said Noah Schwarz, an executive search partner at Korn Ferry, who said he also expects more turnover at Credit Suisse. “It gives them the opportunity to build something.”

And “Succession”’s Kendall Roy thinks he has it bad? It seems the hardest thing about running a bank isn’t controlling your leverage ratios or boosting your ROTCE -- it’s nurturing top talent while warding them away from your throne.

More on succession:

• Here’s the scoop by my colleagues on the talks inside of UBS.
• If you need a private banker, talk to Jes Staley. That was the advice Epstein gave from his private island. And here’s the take by Bloomberg Opinion’s Elisa Martinuzzi on the issue behind the Staley probe.
• Too big to retire? There’s gridlock at the top of the big U.S. banks.

It Pays to Return

And, sometimes, it pays not to. My colleagues Tom Maloney and Hema Parmar found that 15 hedge fund managers collectively earned more than all 56,000 members of JPMorgan’s investment bank, with five of them reaping more than $1 billion. Only two of that group outperformed the S&P 500 at their main hedge fund.

This is after a year in which outflows from the industry neared $100 billion, the most since 2016, and Goldman expects $20 billion more in outflows this year.

Speaking of hedge funds, we are watching for 13Fs, where the biggest trades of the fourth quarter are finally disclosed. Jim Rossman, the head of shareholder advisory at Lazard, joined us this week on Bloomberg Television to talk through what he’s looking for as he watches the investor base at more than 900 companies, keeping a close eye on about 65 whales.

More on Wall Street

• Airbnb is one of Silicon Valley’s most litigious startups. Court dates are on the horizon as it plots a much-anticipated IPO -- which, according to the WSJ, might also be delayed as losses climb.
• The hedge fund firm formerly known as Och-Ziff had a fifth-straight year of withdrawals.
• Bank trading desks are trying to boost work with the investment vehicles of billionaires as the hedge fund industry wavers.
• Don’t miss this profile by my colleague Sridhar Natarajan on Beth Hammack -- the woman who’s rising quickly inside of Goldman, becoming an integral part of every behind-the-scenes conversation.

More to come, and hoping you have a great three-day weekend. -- Sonali