John LeFevre, creator of the infamous @GSElevator Twitter feed, has now got round to writing a book – and the former Hong Kong resident paints a dubious picture of expat bankers in the territory.
Expats we spoke to in Hong Kong, however, say the book,Straight to Hell: True Tales of Deviance, Debauchery, and Billion-Dollar Deals, appears more historical than current. LeFevre worked at Citi in Hong Kong in a bygone era – 2004 to 2008 – when Western bankers were more in demand and enjoyed lavisher lifestyles than they do today.
In a recent Wall Street Journal interview LeFevre says that “Asia is still crazy” as a place to work compared to New York and London, while his book includes tales of bankers allegedly meeting in Hong Kong hotel rooms to set client fees. “Expat culture is different,” he told the WSJ. “[Expats’] bosses are in New York and in London. I think there’s less oversight. Hong Kong was a tropical island masquerading as a legitimate city…It feels like you’re on vacation. That contributes to the slightly detached sense of reality.”
LeFevre’s take on Hong Kong was forged by having worked there during the Asian banking boom of the mid-2000s. “Back then traders in Hong Kong felt like they had the Midas touch – structured-products specialists were selling high-margin products to underdeveloped clients, propping up global P&L for management in London and New York,” says Nick Wells, director of search firm Webber Chase. “Given their growing contribution to global books, Asian bonuses just got bigger and bigger.”
Ten years ago expat bankers were also more numerous in Hong Kong than they are now – many were parachuted into management roles because of skill shortages locally, says Moncef Heddad, a former investment banker at J.P. Morgan in Hong Kong who now runs boutique advisory firm MCM Partners. “Back when LeFevre and I were working in IB in Hong Kong, expats here were more removed from head office – ‘if we don’t like him, send him out to Hong Kong’ was the attitude,” says Heddad.
No more abalone and champagne
What of LeFevre’s claim that expats are detached from reality and live like they are on vacation? Again, this attitude was more common in his day than now. Most Westerners working in mid-2000s Hong Kong received “expat packages” – extra money to cover housing and schooling costs – which meant they could use their salaries and bonuses to splash out on luxuries, not necessities.
“In LeFevre’s day, young bankers would go to Hong Kong and party hard – everyone was eating abalone and drinking champagne,” says Heddad. Despite obvious expectations (most recently Rurik Jutting), Heddad believes most expats who’ve landed in the last five years have had to ditch their “party lifestyles”. “This is purely an economic shift. Because they’re not on big expat packages, they’re not making crazy money like before. But LeFevre is wrong to say that Hong Kong was ever ‘crazier’ than New York or London – there are good and bad apples everywhere.”
Not so isolated
LeFevre’s belief that Hong Kong bankers enjoy “less oversight” because their bosses are based abroad doesn’t hold water today either, says a Hong Kong expatriate and former HSBC risk manager. “Every global bank has had to pay a massive fine recently to some regulator or another for the activities of its satellite offices, so no central team can afford that risk anymore,” he adds. “Headquarters can no longer simply send over an expat to get the job done – the local teams are driving the hiring requests, and as a result most expat bankers are now accountable to a locally-based manager.”
“It seems like LeFevre doesn’t realise the reality now because since his day more local people have been promoted to senior managers. The banks are encouraging this and so are regulators and the government,” says Heddad. “Plus the skill set required in investment banking is different – banks want people who speak Mandarin and know the mainland market. It’s a lot more difficult to move to Hong Kong than it was in his time and the expats who are here already are typically now more entrenched in the local market and are staying for longer.”
One former Hong Kong banker turned-headhunter suggests that LeFevre is playing up the expatriate bad behaviour that he witnessed during his stint at Citi. “He’s extrapolated and exaggerated some of the things he saw here before the Lehman collapse. There are always a few extremes and he’s highlighted them in his book to sell more copies.”
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