The New Wolves of Wall Street
By Liam Jamieson
Attending Dartmouth College, viewed as a Wall Street feeder school, hasn’t tempted me to head down the profitable career path that is the world of finance. And yet it’s all around me: Friends meticulously prep for job interviews a year before the positions actually become available. Alums who go on to become analysts then find themselves sacrificing sleep, hobbies and anything resembling a social life. Cutthroat? Undoubtedly. Worth it? Depends on whom you ask. But today facing an era of change? You betcha.
In today’s Daily Dose, we dive into Wall Street as it lives and breathes in this moment, the issues forcing much-needed change, the key players and whether Wall Street is still quite what it once was. Keep your eyes on the screen, because reading this newsletter is an investment you’ll want to make.
Insider Wall Street
Broadening Horizons, Helping New Communities: Wall Street has been historically a bona fide white boys’ club. Until now. Calls for greater diversity are ringing loud around southern Manhattan. In addition to big banks diversifying their workforce, finance trailblazers like Teri Williams are making crucial strides in helping communities that were in the past excluded from financial education. In June, actor Hill Harper also launched the Black Wall Street app, a digital wallet designed to empower Black investors looking to enter the crypto world, educate on financial well-being and keep money circulating within Black communities.
Long Days (and Nights) at the Office: The survey leaked in March on the working conditions of Goldman Sachs’ junior analysts made for grim reading. But what’s being done to ease the load on employees, many of whom reported averaging 98-hour workweeks and drastic drops in mental and physical health? The likes of Goldman Sachs, JPMorgan and Barclays are extending an olive branch by taking on additional hires, raising salaries, enforcing no-work-on-Saturday rules and even offering Pelotons, Apple Watches and luxury vacations to employees. But with the culture of overwork so deeply ingrained, will the changes be enough to solve Wall Street’s problems? Don’t bet on it. Goldman Sachs’ view on working from home? “An aberration we’re going to correct.” Ouch.
Rocketing Stocks: Big tech’s privatized space race is only beginning. From Virgin Galactic’s Richard Branson exiting Earth’s stratosphere to Blue Origin’s Jeff Bezos not long after, what has this meant for the moguls’ companies’ stocks? Well, it’s mainly good news: In the month leading up to Branson’s flight, Virgin Galactic stock rose 45% up to about $44 per share. But following Bezos’ Blue Origin flight, the e-commerce giant’s company, Amazon, faced a negligible stock market change. Nevertheless, as more rockets from private entities are set to soar above the planet, rocket stock is something to keep an eye on.
Green ETFs: An $8 trillion market, exchange-traded funds (ETFs) can be easily traded on a stock exchange while offering the benefit of being diversified. And as more young Americans are investing ethically, green ETFs, ones that invest only in socially and environmentally conscious companies, are on the rise. Wall Street’s Blackrock, the world’s largest asset management firm, has managed the world’s largest ETF provider, iShares, since 2012. Worth over $3 trillion, iShares includes green ETFs like the $6 billion Global Clean Energy ETF that, among its roughly 80 holdings, invests in renewable energy companies like Vestas Wind Systems and solar energy company Enphase. But despite ethical ETFs growing 223% in 2020, experts say it’s hard to “look under the hood” of ETFs, as funds don’t have to publish all of their holdings and can be deemed “green” without real sustainable changes made.
Wall Street Youngbloods
Sam Bankman-Fried: Just 29 years old and worth $8.7 billion, according to Forbes, the native Californian is the world’s richest person under 30. But you probably wouldn’t expect that from the shaggy-haired, shorts-wearing devout vegan. Bankman-Fried gave being a bank man (pun intended) a try, working as an ETF trader on Wall Street before moving to Hong Kong in 2018 to make his real fortune the way that many other young and daring entrepreneurs have in recent years: crypto. From there, the mogul soon launched the cryptocurrency exchange company FTX, which is now valued at $18 billion. Unlike competitors such as Coinbase, FTX serves as a trading platform for more complex derivative products, resulting in a predominantly wealthy user base of traders that exchange tens of millions of dollars daily. What’s next? Multimillion-dollar sports marketing deals — you’ll now find the NBA’s Miami Heat playing in the FTX Arena and FTX patches on all MLB umpires.
Iseult “Izzy” Conlin: Sporting skinny jeans, Toms shoes and Ray-Bans to work, this millennial trailblazer is bringing technology to Wall Street’s slow-to-adapt $50 trillion bond market. Having seen bond trading still being conducted over the phone after being hired at Blackrock in 2010, the member of the mobile generation noticed the bonds market falling behind the times and in need of an “electronified” upgrade. Applying tech tools and shortcuts into her daily work, Conlin started saving hours a day before teaching her old-dog colleagues new tricks, eventually prompting Blackrock to implement a program in 2016 that matched young, tech-savvy hires with veteran traders. Now a managing director at financial services company Tradeweb Markets, Conlin is a leader in a new, less male-dominated generation of Wall Street, continuing to push bond traders to embrace the benefits of tech. Read more on OZY.
Flori Marquez: Another woman making a name for herself in the finance world, Marquez co-founded the $3 billion financial services startup BlockFi in 2017 with hopes to bridge the complex world of blockchain with more traditional finance. While Bankmam-Fried’s FTX targets rich and crypto-savvy investors, Marquez’s emerging Wall Street company — though technically across the Hudson River in Jersey City — is a more user-friendly platform for crypto trading, allowing investors to buy and sell a variety of cryptocurrencies on BlockFi’s mobile app, as well as apply for low-cost loans. Marquez last month secured a BlockFi partnership with Visa, launching the first-ever crypto rewards credit card. Aiming to expose more people to the world of crypto, “it’s an awesome way for people to gain passive exposure into this new asset class,” she tells Yahoo.
Jarrid Tingle: When Jarrid Tingle co-founded venture capital firm Harlem Capital with Henri Jacques-Pierre in 2015, the two worked for the Black-owned private equity firm ICV Partners. A side-hustle for Tingle until graduating in the top 5% of his class from Harvard Business School in 2019, Tingle’s aspirations were never about making money, but rather about being a changemaker for good on Wall Street. With Harlem Capital’s mission to invest in 1,000 women and minority founders in the next twenty years, Tingle is changing the face of entrepreneurship by expanding opportunities for other entrepreneurs from marginalized backgrounds. Having raised in total nearly $175 million from a plethora of diverse investors as well as giants like Apple and PayPal, Harlem Capital has become one of the largest Black-owned VC firms, with sights set on a billion dollars in funding by 2030 for lasting impacts and investments in minority trailblazers, companies and communities.
Banks and Shops to Bank On
Public: Step aside, Robinhood. Public is similar to its biggest rival in that both apps offer commission-free trading and fractional investing for users. But the Wall Street-based company sets itself apart by making the app part investing space, part social media platform where users can follow other traders and see what investments they are making. An interactive experience, the platform creates a community welcoming to investing newbies, featuring resources to learn more about trading, like virtual talks hosted by expert traders. Though not quite as lucrative as Robinhood’s $32 billion valuation, Public isn’t doing too badly either, valued at $1.2 billion.
Blend: Buying a house is one of the most important — and stressful — financial decisions of anyone’s life. But gone are the days of confusing paperwork and hard-to-navigate applications. Mortgage digital lending platform Blend is here to help. Used by banks such as Wells Fargo and U.S. Bank, Blend focuses on customer-centric banking as its software powers mortgage applications, making buying a house less time-consuming and more transparent. Last month, Blend went public on the New York Stock Exchange, where it was valued at over $4 billion. The San Francisco-based startup’s CEO, Nima Ghamsari, hopes to prove to Blend’s users that the company is here to stay.
Gaingels: David Beatty and Paul Grossinger aimed to bring more diversity into the venture market through VC firm Gaingels, whose mission is to invest in LGBTQ entrepreneurs and businesses. Today, the company has invested $300 million in hundreds of deals with companies, including household names like MasterClass, that have appointed members of the LGBTQ community in leadership roles. Gaingels has also pushed for the building of diverse leadership teams with its clients through recruiting and networking. “If change needs to be enabled from the top, the venture ecosystem ought to enable more diverse players to enter the pipeline and get to the top,” says Gaingels managing director Lorenzo Thione. Brex: A startup for startups? Brex was founded by the mischievous Brazilian duo of Henrique Dubugras, an iPhone “jailbreaker” at age 12, and Pedro Franceschi, who had to shut down his gaming company for patent violations at 14. The two saw while studying at Stanford University how challenging it was for young entrepreneurs with little to no credit history to get money from traditional banks to get their startups going. So the two dropped out in 2016 to create Brex, a credit card company for startups that offers approvals quickly and doesn’t require a personal guarantee.Instead, it mitigates risk by monitoring customers’ bank accounts and adjusting credit limits accordingly. The startup has exploded in popularity, attracting small and major names, from personal finance startup SoFi to New York e-commerce startup Boxed, all while garnering investments from venture capital firms. Just a few short years later, Brex is now valued at $7.4 billion.
We’re Not in Manhattan Anymore
Miami: In downtown Miami lies Brickell, the city’s booming financial district. In recent years, it’s been coined “Wall Street South,” and with good reason: The skyscraper-filled neighborhood is the nation’s second-largest financial hub and home to dozens of hedge and private equity funds. Why Florida? Well, aside from offering milder winters and a lower cost of living than the tri-state area, it all comes down to taxes, or a lack thereof. No individual income taxes, no estate taxes, no capital gains taxes, not to mention being able to tap into a growing Latino market, it’s no surprise the Sunshine State’s Bicknell has become a prime spot for Wall Street bankers to relocate.
Dallas: Ditch the Patagonia vests and throw on some cowboy boots — you’re in Dallas’ financial hub, aka “Y’all Street.” Maintaining offices in Y’all Street gives Deutsche Bank, Morgan Stanley, UBS and others a stronger foothold in the South, a crucial move as many Americans flock to cities such as Dallas. And while the big banks are competitive over clients, real estate and talent, banks like Fidelity, Charles Schwab and JP Morgan Chase actually created the North Texas Investment Services Coalition, which works on shared goals for the Dallas firms. Seemingly at odds with New York’s Wall Street vibe, maybe it’s the Southern hospitality rubbing off on them.
Dresden, New York: Sure, it’s in the same state as Manhattan, but this tiny village of just over 300 residents on the shores of Seneca Lake couldn’t be more different. That is, until it became an upstate lifeline to Wall Street. How did this happen? Just outside town on Seneca Lake’s shores, private equity firm Atlas Holdings bought power plant Greenidge Generation LLC in 2014, launching a massive bitcoin mining operation in 2020. The venture hasn’t been well received. The project’s been wreaking environmental havoc on the lake and surrounding community. With 8,000 computers operating 24/7 to solve increasingly challenging math equations and effectively “mine” virtual currency, it’s outrageously energy-intensive. And as Greenidge is a gas-powered plant, the mining is emitting serious amounts of carbon emissions despite movements from affected locals to cease operations.
- Liam Jamieson, OZY Author Contact Liam Jamieson