CS to spin off IB into "CS First Boston" and cut 5% of staff globally
"Drawing on its rich heritage across advisory and capital markets, CS First Boston is expected to be more global and broader than boutiques, but more focused than bulge bracket players. The future CS First Boston envisions attracting third-party capital, as well as a preferred longterm partnership with the new Credit Suisse."
"A headcount reduction of 2,700 full-time-equivalent employees (FTE), or 5% of the Group’s workforce, is already underway in 4Q22."
Thoughts everyone?
michael klein is the new ceo of csfb
Wonder what this means for M. Klein & Co?
probably will be absorbed under CSFB
FT article today says it will merge with CSFB
Allocating 80% of the capital to Wealth Management by 2025. Oof
9% of capital to CSFB... Big oof
I think they will depend on new 3rd party investors
Where are y’all reading this?
https://www.credit-suisse.com/media/assets/corporate/docs/about-us/medi…
When are we going to make a “CS first boston 2025 SA” thread?
I wouldn’t bet against Michael Klein. Lot of uncertainty but lot of medium to long term opportunity. They will need to heavily rebuild but this will be a platform that could appeal to a lot of bankers over time.
That's what I was thinking too, but a question is, what happens to M. Klein & Company? It just goes away? Merges with CS First Boston? I imagine clients are there for Michael Klein, not the associates they hired fresh out of MBA.
Same thing that happened when Paul Taubman merged his shop with Blackstone advisory
FT article today says it will merge with CSFB
So CS is going from BB to Boutique now lol?
What happens to M Klein?
I was worried about getting offer pulled as incoming CS FT but M Klein employees are 100% fucked lol
Probably overall good news for you.
I think given how small m klein is they will just join the team lmao they are prob all better than ppl at cs rn
Anyone have any insight into what happens to offers?
Does this mean that M.Klein Co will be absorbed into CSFB?
Michael Klein being CEO is extremely positive for CSFB's Levfin franchise! They can probably rely on loads of Saudi money at a time when all other major banks are derisking in this product.
I am junior and I accepted an offer to join CS next summer as a summer analyst, do I count as a full time equivalent employee? Like should I be worried since I’m just an intern?
More of the job cuts will come from middle and back office I assume.
Why would they be cut? The FO can't do their job without those functions ...
Bullish on Klein and CSFB as a platform.
Seconded.
Is it just the US IB that gets separated or the European as well?
The presentation deck said "reduce European IB lending & cap markets footprint" and "capital-light and focused offering outside North America"... my read is that US is going to be the centerpiece, and that international offices won't be able to produce in lev fin, and then as advisory only will sink or swim?
Will be interesting how CS may just let deals trade away to competitors for key sponsor clients, and would that ultimately hurt them back in NY... Or do they cover them from the US and then ultimately they eat up the fees for international offices (great for culture !)
CS has never had a strong franchise in Europe and there are very few bankers worth keeping around. My understanding is that CS has never once earned a profit in Europe in IB. Europe is also a far less profitable lev fin market given the oversaturation of Ba king.
CS has a good franchise in Asia which is advisory / ECM led.
it makes sense to pull back capital commitments and build a proper industry led advisory business, not dissimilar to JEF.
I agree, but would extend the profitability to APAC / Australia also. Oversaturated, and now I'm not sure how they will not play in deals for the Carlyle/TPGs/KKR/PEPs of the world, especially when that financing market has slowly been catching up and building depth. I guess they'll just pay more fees away to Cohen to use the capital and do those deals
Good outcome for the US FSG / Lev Fin business. Will they be unregulated (lev lending..) over time?
Where’s the capital for lev fin and underwriting ecm and dcm coming from? How about distribution via S&T desks?
I'm an incoming IB analyst for the LevFin team in NYC. What does this mean? Is my offer going to get retracted? Thoughts?
no it won't because you're incoming. It would be a different story if you were full time and they were looking to cut jobs. But then again, LevFin is their core business, wouldn't make much sense to cut an analyst.
It will most likely be fine in the short-term but would suggest talking with someone in the group who you're close to
No Joe Perella, no care.
How do they underwrite debt without a balance sheet? If they're raising equity isn't that too expensive to use for lbos?
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