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Why Wall Street talent is moving to Silicon Valley

Less than a decade ago, top talent was flocking to Wall Street — not just for the high salaries and lucrative bonuses, but also for the opportunity to work in a dynamic and fast-growing environment. But now the tech industry, with its double digit growth, is setting a new standard on what the ultimate dream […]

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Less than a decade ago, top talent was flocking to Wall Street — not just for the high salaries and lucrative bonuses, but also for the opportunity to work in a dynamic and fast-growing environment.

But now the tech industry, with its double digit growth, is setting a new standard on what the ultimate dream job looks like, with its tales of young entrepreneurs-turned-millionaires overnight — and of game rooms and lounges alongside brainstorming corners and innovation workshops.

Tech companies have become the new desirable destination, not only for top programmers but for leading Wall Street executives, too. And with successful IPOs from the likes of Twitter, Facebook, and LinkedIn, Silicon Valley has created giant companies with the resources to pursue and retain top Wall Street talent.

Headline Hires in M&A Land

When Marissa Mayer became Yahoo’s chief executive in 2012, she hired Jacqueline D. Reses, a former Goldman banker, as the company’s chief development officer. Since then, the brain drain from finance has become apparent. Examples abound:

  • Ruth Porat, CFO at Morgan Stanley has recently been snatched by Google.
  • Former Goldman banker Anthony Noto moved to Twitter.
  • Credit Suisse lost tech banker Imram Khan to Snapchat.
  • Former Morgan Stanley securities analyst Mary Meeker is now an analyst at leading Silicon Valley venture capital firm Kleiner Perkins Caufield and Byers.
  • Laurence Tosi left Blackstone Group for Airbnb.
  • Goldman Sachs’ Sarah Friar moved to Salesforce.com, and then to Square.
  • David Wehner of Allen & Co joined Zynga, and then Facebook.

The investment in these hires makes sense from the tech giants’ perspective, since acquiring other companies and expanding into new geographies has become their core growth strategy. And we’re seeing an acqui-hire trend in tech, where giants acquire startups for the sake of raiding their talent. As these complex executions (along with post-merger integration and constant sourcing of deal flow for potential acquisitions) become inherent to their business, tech giants require the expertise of high caliber in-house financial professionals.

Since these companies are all public companies, and all eyes are on them, reporting and compliance become increasingly important — yet another reason to hire in-house bankers.

The active M&A scene in tech creates an ongoing appeal for financial sector professionals to take part in this ecosystem instead of working on deals in more traditional industries. As the tech giants branch out to other geographies such as Europe and Asia, establishing R&D centers in key locations, their visibility into other markets and opportunities expands significantly.

Additionally, the scale of acquisitions has been increasing to multibillion-dollar deals. Consider the $12.5 billion acquisition of Motorola Mobility by Google (which later kept the IP and sold the company to Lenovo for $2.91 billion), among other billion-dollar acquisitions of companies like Waze and Oculus. The famous $19 billion acquisition of WhatsApp by Facebook set another record in tech giant acquisition history. Since then we have seen the $19 billion acquisition of Sandisk by Western Digital and the largest merger in history when Dell acquired EMC for $67 billion. These deals feed into the infatuation with all things tech, creating the right content for talent to migrate from finance.

mba talent migration

MBAs Vote Tech

With Wall Street compensation shrinking, recent business school graduates are having difficulty justifying the intense 100-hour banking work week and lack of a work-life balance. Instead, they are choosing the casual work environment and flexibility of tech firms, trading in the Wall Street suit and tie for jeans and a tee shirt.

MBAs are fighting over internships at Google so they can breathe some innovation air as they stroll on campus among smart cars, in-office Segways, and dog-friendly work settings.

Companies like Amazon and Apple are highly ranked employers among MBAs. Last year, only 10 percent of MIT graduates went into finance, compared with the 31 percent in 2006. According to WSJ research, in 2011, 36 percent of Stanford graduates were recruited to finance jobs. This number is comparable to other top finance focused universities, including Harvard, Yale, University of Pennsylvania, and University of Chicago. By 2013, that number had shrunk to 26 percent (a decrease of almost 30 percent). During those years, the tech industry grew dramatically, and in 2013, 32 percent of Stanford graduates took tech jobs compared to only 13 percent in 2011. Although not all of the attrition in finance can be attributed to tech, research by The Economist shows that tech is quite the migration destination.

In the shift to tech companies, Stanford graduates are willing to accept a compensation composed of a lower salary and an equity component in return for a positive work culture and mission. A median tech salary for a Stanford MBA graduate averaged ~$160,000, including signing bonuses and other guaranteed compensation, compared to $285,000 in finance jobs. The delta between offerings is not dramatic, as it is offset by the equity or options component employees receive in the tech sector. Bonuses in the financial sector are nowhere near the millions of dollars pre-crisis, making it harder for MBAs to go for the banking lifestyle and culture for just another $100k a year before taxes. The upside of those tech equity options have the potential of becoming more lucrative and making the overall compensation package worth a whole lot more.

Tech giants are also increasing their East Coast presence, with Google and Facebook growing their New York offices and recruiting an increasing number of MBA graduates.

In 2011, only 5.5 percent of Columbia University graduates went for a job in tech. In 2013, that number grew by 112 percent to 11.7 percent. Giants like Amazon, AppNexus, Facebook, Spotify, eBay, ZocDoc, LinkedIn, and Yahoo have added the most New York City jobs in Q2 2014.

A Growing Trend

The migration of top executives and young talent to the tech scene is a worrying trend for Wall Street. It is possible that the demand for finance will rebound if compensation packages return to pre-2008 standards. However, the shift to tech is much more than just a monetary issue. It has become obvious that lifestyle, autonomy, and the opportunity to work in a high growth industry that is changing the world are important factors. Wall Street and other traditional industries will have to continuously adapt in order to compete with the ever-growing tech industry.

This article originally appeared on Venturebeat

Source: https://www.iangels.com/2015/11/why-wall-street-talent-is-moving-to-silicon-valley/

Private Equity

Alternative Investments: Accelerate’s Alt ETFs Now On RBC Dominion Securities A+ Platform

Accelerate Financial Technologies Inc announced this week that its alternative ETFs have been added to the RBC Dominion Securities A+ platform. RBC Dominion Securities describes the A+ as the next level of wealth management.

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Alternative Investments: Accelerate’s Alt ETFs Now On RBC Dominion Securities A+ Platform

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The A+ is for you if “you require serious investment management for your serious money.”

Accelerate Financial Technologies Inc announced this week that its alternative ETFs have been added to the RBC Dominion Securities A+ platform.

RBC Dominion Securities describes the A+ as the next level of wealth management.

For select clients with serious money, the platform provides greater convenience, customization, RBC’s Unified Managed Account technology, access to elite money managers worldwide, and tax efficiency.

Accelerate’s Alt ETFs on RBC A+

The range of alternative ETFs from Accelerate allows investors to diversify beyond stocks and bonds by including alternative asset classes in their portfolios.

The firm is known as a pioneer in institutional caliber alternative ETFs including hedge fund and private equity ETFs. It claims it is “disrupting the asset management industry by offering performance-oriented alternative investment strategies previously reserved for wealthy investors at a fee significantly lower than competitors.”

“We are pleased to be chosen by RBC Dominion Securities, a global leader in wealth management, as one of the select group of high-quality investment managers on the exclusive A+ platform for RBC Dominion Securities advisors and their clients,” said Accelerate CEO Julian Klymochko. “In an era of rock-bottom interest rates and record-high stock market volatility, we are pleased to provide investors with diversification, alternative yield, and alpha generation solutions through alternative investment strategies including absolute return, arbitrage, enhanced equity, and private equity replication.”

Selected ETFs

The alternative ETFs on the RBC Dominion Securities A+ platform include:

  • Accelerate Absolute Return Hedge Fund (TSX: HDGE) – a diversified, liquid, and performance-oriented long-short equity hedge fund
  • Accelerate Arbitrage Fund (TSX: ARB) – provides exposure to SPAC arbitrage and merger arbitrage investment strategies
  • Accelerate Enhanced Canadian Benchmark Alternative Fund (TSX: ATSX) – combines exposure to the S&P/TSX 60 plus a long-short Canadian equity overlay
  • Accelerate Private Equity Alpha Fund (TSX: ALFA) – designed to provide investors with private equity-like investment returns

Related Story:  Liquid Alt ETF Provider Accelerate Offers Ready-Made Alternative Investment Strategy                                                

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Source: https://dailyalts.com/accelerates-alt-etfs-now-on-rbc-dominion-securities-a-platform/

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Private Equity

Venture Capital: AgTech Startup Benson Hill Lands $150M

Benson Hill, an agtech startup based in St. Louis, announced Thursday its close of a $150 million Series D round led by Wheatsheaf and GV (formerly Google Ventures). It uses biotechnology and data science to enhance the nutritional qualities and sustainability of crops.

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Venture Capital: AgTech Startup Benson Hill Lands $150M

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Benson Hill uses biotechnology and data science to enhance the nutritional qualities and sustainability of crops.

Benson Hill, an agtech startup based in St. Louis, announced Thursday its close of a $150 million Series D round led by Wheatsheaf and GV (formerly Google Ventures).

The company said other strategic and ESG focused investors also participated. These included Argonautic Ventures, Caisse de dépôt et placement du Québec (CDPQ), Emart, GS Group, Louis Dreyfus Company, iSelect Fund, Fall Line Capital, Mercury Fund, Prelude Ventures, Prolog Ventures, S2G Ventures, and additional strategic and family office investors.  (FOOD navigator-USA.com)

Benson Hill technology

Benson Hill uses biotechnology, data science, and AI to enhance the nutritional qualities, flavor, and sustainability of crops and vegetables.

The firm’s “Cloud Biology” is the fusion of data, machine learning, and AI techniques with biology. Its “CropOS” is a proprietary platform that facilitates the accessibility and actionability of Cloud Biology.

The CropOs platform uses plant phenotyping, predictive breeding, and environmental modeling algorithms to better control the plant breeding process and realize these advantages:

  • Produces plants that are highly productive, highly nutritious, and better tasting
  • Better texture
  • Reduce the number of processing steps
  • Reduce the need for additives
  • Grow plants that “do more with less,” thus boosting sustainability

The company’s work so far has been concentrated around soybeans.

Its new, ultra-high-protein (UHP) soy products spiked the interest of investors. They come from a highly productive non-GMO soybean that is rich in oleic oil content.

Use of funds

Benson Hill plans the commercial launch of the first Ultra-High Protein soybean varieties in 2021, among other product launches.

It also plans to expand its team by adding top talent and continue the development of Cloud Biology and CropOS.

“As a society, we’re at a crossroads made more evident as the pandemic has revealed strengths and vulnerabilities in our food system,” said Matt Crisp, Benson Hill CEO. “Food choices that create enjoyment, make us stronger, and help preserve our environment need to be accessible to everyone, and the power of plant diversity and technology innovation can help fuel that evolution.

Related Story:   Smart Farm Technology To Take The Drudge Out of Plant Breeding

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Source: https://dailyalts.com/agtech-startup-benson-hill-lands-150m/

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Private Equity

FinTech: Alliance Data Buys BNPL Fintech Bread For $450M

Alliance Data Systems (NYSE: ADS) said Thursday that it will acquire Bread and its digital platform for $450 million of which $100 will be paid through Alliance stock. The transaction would expand Alliance Data’s own digital offerings by including buy-now-pay-later (BNPL) products.

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FinTech: Alliance Data Buys BNPL Fintech Bread For $450M

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Alliance Data will pay in cash and stock for the acquisition.

Alliance Data Systems (NYSE: ADS) said Thursday that it will acquire Bread and its digital buy-now-pay-later (BNPL) platform for $450 million of which $100 will be paid through Alliance stock.

The transaction would expand Alliance Data’s own digital offerings by including BNPL products. BNPL is a major trend now that consumers have embraced the interest-free, zero-fee facility to pay in installments. Alliance is a provider of data-driven marketing, loyalty, and payment solutions. (Alliance)

Digital BNPL is particularly popular with millennials and the younger set. They prefer not to run up credit card debt and like the speed and convenience. The technology and products acquired from Bread will address this segment of the population.

Bread already has tie-ups with merchants such as online jewelry seller Noémie, the luxury watch seller Hublot and Newton Baby, the crib mattress provider.

BNPL customer experience

“Bread’s flexible, easily-integrated payment solutions, coupled with Alliance Data’s Enhanced Digital Suite, will improve the digital customer experience and support increased acquisition and checkout rates, offering the best payment product to the right consumer at pivotal moments in the customer’s online shopping journey,” Alliance said in a statement.

Alliance intends to leverage Bread’s solutions along with its own existing private label, general-purpose and commercial products.

COVID-19

Its brand partners will therefore get another advantage in the eCommerce channel, with online businesses already getting a boost from COVID-19.

“With the timing of the holiday season upon us, the COVID-19 pandemic has accelerated the adoption of digital technologies, and perhaps nowhere as significantly as in financial services and payments,” said Val Greer, chief commercial officer, Alliance Data.

BNPL is now crowded with cash-rich players

Payments giant PayPal (NASDAQ: PYPL) announced in August that it would begin offering BNPL services, recognizing that COVID-19 had triggered a dramatic increase in their popularity.

Other players in the BNPL field include Klarna, Affirm, Afterpay, and Quadpay.

In a recent study, Tech Crunch found that PayPal had the highest retailer coverage with a presence of 65% retailers. Afterpay was a distant second at 10%, then Affirm 6%, Klarna 5%, and QuadPay 2%.

The study concluded that PayPal was primed to dominate the BNPL wars.

Related Story:   PayPal Challenges Klarna In U.K. BNPL Tussle                                                

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Source: https://dailyalts.com/alliance-data-buys-bnpl-fintech-bread-for-450m/

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