Home > Uncategorized > Why hedge funds should love @GSElevator

Why hedge funds should love @GSElevator

Hedge funds should love @GSElevator and not just gselevatorfor the funny tweets.  John LeFevre, the man, the myth behind @GSElevator is beginning to comment more broadly on the implications of the culture he ascribes to Wall Street.

First topic up:  women in the workplace.  In a recent article, he dismisses the notion of a pay gap between men and women, but acknowledges a “work environment that is subtly exclusionary.”  Expect LeFevre to publish more commentary about the state of investment banking and it’s sure to make the industry squirm.

From the beginning, what made @GSElevator compelling was its pitch perfect capture of the culture of highest tiers of Wall Street.  To outsiders, it was shocking for its materialism, Machiavellianism and misogyny.  To those on the Street it was a captivating example of how fiction is truer than fact.

Of course, @GSElevator is not the first to examine the world of investment banking.  Bonfire of the Vanities coined the phrase Masters of the Universe.  Wall Street showed us one tried and true way to make it in finance.  What’s different this time around?  Timing.  Things have changed since the 1980s.  Banks are bigger and more interconnected.  Many more Americans are directly invested in the markets.  The health of the stock market and the health of banks contribute to the health of the broader economy.

If banks are more important to our economy and individual prosperity, what are the implications of the Wall Street culture John LeFevre chronicles?  If the culture results in bad outcomes for banks and the economy we are all at risk.  LeFevre realizes this and he will continue to write about the consequences of Wall Street culture.

For hedge funds, the key question is:  If the Master of the Universe culture is rooted in ultra-high compensation, what does that say about the business relationship between banks and their clients (hedge funds and other types of institutions)?  Is everyone a “muppet” getting “their faces ripped off?”  Certainly in fixed income trading, the massive asymmetry of information between sell and buy side is slow to change.  LeFevre should address this, to the delight of hedge funds and all institutional investors.

In many ways, the unmasking of @GSElevator has liberated him to embrace a wider and more important mission in our market: truth telling about what Wall Street mentality means for all of us.

And now for my favorite @GSElevator tweet:

gstweet

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