The world is full of traders who have stayed in banks and traders who have left for hedge funds. But there are also traders who have left to set up their own companies and to become multibillionaires. This category includes Alex Gerko at XTX. It also includes Nik Storonsky of Revolut.
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Revolut and Storonsky have been in the news for two wrong reasons lately. There is something about a yacht, which Storonsky denies. There is something about Revolut leaking data to hackers who pretended to be members of the Italian government and then demanded a $3m ransom. Neither of these is dwelt upon in the FT’s new interview with Storonsky, which opens with his shiny shoes.
Storonsky’s shoes are reportedly “the shiniest shoes imaginable.” They are paired with a black suit, which means Storonsky wouldn’t fit in at Goldman Sachs, where navy blue suits are the thing. But Storonsky wouldn’t want to work for Goldman Sachs because he is worth $33bn having founded app-based-fintech-bank Revolut, which is valued at $115bn.
Storonsky used to be an equity derivatives trader. He saved his bonuses to start Revolut. His time at Credit Suisse and Lehman has been well-documented and is credited with his enthusiasm for 13 hour days and working weekends. But the FT says his experience at the failed banks also drove an intense risk aversion that might explain why Storonsky has gone for smart shoes as he considers an IPO.
At Lehman Brothers, the trading book could be down “millions of dollars within one day,” says Storonsky. At Credit Suisse, infighting and politics were debilitating. At Revolut, Storonsky says he’s trying to build something much more solid and much less risky. Most notably, while most banks lend 100% of their deposits, Revolut is only lending 6%. It doesn’t plan to lend more than 10-20%, says Storonsky. And when Revolut does lend these amounts, the loans will be sold on outright or displaced through securitisations.
Storonsky is an ex-trader who doesn’t like risk. He does like kite-surfing, which he says is like meditation. He doesn’t dress like a surfer so much now. If he wanted, he could buy a lot of shoe polish.
Separately, now that adult children can’t afford to live without parental assistance, managing directors in banks are hanging around and failing to retire.
The WSJ says top law firms have the same problem and are filling up with partners in their late 50s, and older.
However, the WSJ says there is also a way to persuade these people to cede their positions to the next generation. Law firms have been hiring consultants to help nudge people out the door, and these consultants are asking questions like, “How many healthy years do you have left in your life, and what do you plan to do with them, thinking two years at a time?”
In this way, the WSJ says it’s been possible to persuade partners to leave and do things like work on a revival of the Rocky Horror Show instead.
Meanwhile…
Warren Buffett’s son has been made chairman of Berkshire Hathaway. This doesn’t seem right. He was previously a farmer, a member of local government and a director of Berkshire and some other public companies. (FT)
OpenAI is hiring 200 people in Singapore. Anthropic is opening an office there. DeepMind and Mistral each plan to have 100 people there by the end of the year. Databricks has 250 people and is expanding. (FT)
Shares in Goldman Sachs fell 7% last week. (FT)
Citadel Securities has a 24-hour US equities trading service and now has about 10 people in Hong Kong focused on sales and servicing these clients, and about 50 in the US. (Bloomberg)
The Bank of England and the Fed are scrutinising trading firms after Jane Street lost $15bn in July. (FT)
Jonathan Raiff was running fixed income for Schonfeld. Now he’s going to Verition. (Bloomberg)
Andy Burnham might increase UK capital gains tax to 45% in order to raise the income tax threshold to £16k. (Telegraph)
When students ask broadly for information about a career, female students receive substantially more information on work/life balance than male students. (NBER)
A drill rig that was solidifying the foundation of Citadel’s new Miami office fell onto three cars. Four people went to hospital. Work has stopped. (WSJ)
Hilton (hotels) received 4,000 applications for 20 places on its early careers program. (Fortune)
“Adverse workplace developments” such as “organizational restructuring, worsening management practice, performance pressures, heightened workload, or internal conflict,” are bad for your mental health long before you’re actually fired. (Rob Henderson)
“I want that job at Goldman. I will take it for any title, any role, and any pay. I will work in the mail room. But first, I want to interview at all those other banks you mentioned. Those will be my practice rounds. By the time I get to Goldman, I will be an expert witness up there on the stand.” (NoRebates)
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