Tag Archives: Goldman Sachs

Goldman Sachs admits it bought Venezuelan bonds

Goldman Sachs admitted it bought Venezuelan bonds after getting accused by the country’s opposition of trying to “make a quick buck off the suffering of the Venezuelan people.”

The president of Venezuela’s opposition-led Congress blasted Goldman for financing “dictatorship” under President Nicholas Maduro after Goldman bought $2.8 billion in bonds issued by state oil company PDVSA at a steep discount.

Continue reading Goldman Sachs admits it bought Venezuelan bonds


Trump says he’s thinking about breaking up the big banks

President Donald Trump said Monday he was contemplating breaking up the big Wall Street banks.

“I’m looking into that right now,” he told Bloomberg about bringing back the “old system” that separated consumer lending and investment banking.

Continue reading Trump says he’s thinking about breaking up the big banks

Ecuador heralds digital currency to start before year end

Ecuador has announced it plans to start circulating what it calls the world’s first digital currency in December. It also claims it has options for developing its new oil refinery which do not depend on China.

Financial analysts have suggested the introduction of the new electronic currency in Ecuador could be used to increase the money supply and devalue US dollar holdings, a first step to abandoning the US dollar as its currency.

The new currency was approved, and stateless crypto-currencies such as Bitcoin simultaneously banned, by Ecuador’s National Assembly last month.

A young man texts at a market in Quito as government prepares to introduce electronic currency

The electronic currency is to exist in tandem with the US dollar and to be backed by “liquid assets,” according to Deputy Central Bank director Gustavo Solorzano. Officials said it would be geared towards the 2.8 million Ecuadoreans too poor to afford a traditional bank account.

Central Bank officials said on Friday the currency does not have a name and officials would not disclose technical details. The amount of the new currency created would depend on demand, they said. President Rafael Correa has denied there is any plan to replace the US dollar, which Ecuador set as its currency in 2000 after a crippling banking crisis.

Initially payments are to be sent and received on cellphones, Solorzano said. Similar schemes have already been set up by private companies in Paraguay and in Africa – including in Kenya and Tanzania.

Nathalie Reinelt, an emerging payments analyst with the US-based Aite Group, said she does not understand any other motivation for creating such a currency other than to allow Ecuador to increase its money supply and, essentially, devalue its US dollar holdings. But analyst Juan Lorenzo Maldonado of Credit Suisse said “It is far too early to know how they are thinking of making the electronic money work.”

Pacifico Refinery

Ecuador’s minister for strategic sectors (Sectores Estratégicos) Rafael Poveda said he hoped to finalize a $9 billion (6.85 billion-euro) deal with major partner China within the month for a refinery on the Pacific coast to process 200,000 barrels of crude oil a day.

Ecuador is also reported to be asking Beijing about borrowing $1.5 billion more. Including the credit line, total loans from China are equivalent to about 13.6 percent of Ecuador’s GDP as of 2013.

Criticised locally for becoming too dependent on China, Poveda said about the refinery deal, after a week-long visit to southern near-neighbor Chile which ended on Friday: “If for any extraordinary reason, which up to now does not exist, this does not happen, we have an option for this project.” However, he did not elaborate on the options.

A pile of US currency, topped with a mobile phone, reminds us that money talks and can be very persuasive!

China has become Ecuador’s second-largest foreign investor, after the United States, mostly in mining and quarrying sectors. Ecuador has already borrowed over $11 billion from China since 2008, when the Andean country defaulted on $3.2 billion of foreign debt.

Last year, Chinese money helped cover as much as 61 percent of the government’s financing needs. In exchange, China has claimed up to 90 percent of the country’s oil shipments over the next few years. Ecuador has South America’s third-largest oil reserves.

Ecuador recently sold $2 billion in bonds with a 7.95 percent return, as well as obtaining another $400 million from Goldman Sachs in exchange for part of its gold reserves.

Greek debt crisis: Goldman Sachs could be sued for helping hide debts when it joined euro

Goldman Sachs faces the prospect of potential legal action from Greece over the complex financial deals in 2001 that many blame for its subsequent debt crisis.

A leading adviser to debt-riven countries has offered to help Athens recover some of the vast profits made by the investment bank.

The Independent has learnt that a former Goldman banker, who has advised indebted governments on recovering losses made from complex transactions with banks, has written to the Greek government to advise that it has a chance of clawing back some of the hundreds of millions of dollars it paid Goldman to secure its position in the single currency.

The development came as Greece edged towards a last-minute deal with its creditors which will keep it from crashing out of the single currency.

The deal is based on fresh economic reform proposals submitted by Athens which bear a striking similarity to the creditors’ offer rejected by the Greek people in a referendum last Sunday – sparking claims that Prime Minister Alexis Tsipras has effectively executed a huge U-turn in order to avoid a catastrophic “Grexit”.

Greece managed to keep within the strict Maastricht rules for eurozone membership largely because of complex financial deals created by the investment bank which critics say disguised the extent of the country’s outstanding debts.

Goldman Sachs Manhattan headquarters
Goldman Sachs Manhattan headquarters

Goldman Sachs is said to have made as much as $500m from the transactions known as “swaps”. It denies that figure but declines to say what the correct one is.

The banker who stitched it together, Oxford-educated Antigone Loudiadis, was reportedly paid up to $12m in the year of the deal.

Now Jaber George Jabbour, who formerly designed swaps at Goldman, has told the Greek government in a formal letter that it could “right historical wrongs as part of [its] plan to reduce Greece’s debt”.

Mr Jabbour successfully assisted Portugal in renegotiating complex trades naively done with London banks during the financial crisis.

His work helped trigger a parliamentary inquiry and cost many senior officials and politicians their jobs. It also triggered major compensation payments by banks to the Portuguese taxpayer.

Pensioners stand outside a closed branch of the Greek National bank in Thessaloniki on June 29, 2015
Pensioners stand outside a closed branch of the Greek National bank in Thessaloniki on June 29, 2015

Mr Jabbour, who now runs Ethos Capital Advisors, has also helped expose other cases including allegations against Goldman Sachs and Société Générale over their dealings with Libya relating to financial transactions that left the country’s taxpayers billions of dollars out of pocket. Both banks deny wrongdoing.

Antigone (Addy) Loudiadis
Antigone (Addy) Loudiadis

Based on publicly available information, he believes the size of the profit Goldman made on the transactions was unreasonable. Scrutiny and analysis of the documents and email exchanges could give Greece grounds to seek compensation and assess if the deals were executed for the sole purpose of concealing the country’s debts.

Greece’s membership of the euro gave it access to billions of easy credit which it was then incapable of paying back, leading to its current crisis. Lenders took its euro membership as a stamp of creditworthiness, but the true state of its economy was far less healthy.

Under Ms Loudiadis’s guidance, Goldman swapped debt issued by Greece in dollars and yen for euros which were priced at a historical exchange rate that made the debt look smaller than it actually was. The swaps reportedly made about 2 per cent of Greece’s debt disappear from its national accounts.

The size and structure of the deal enabled the bank to charge a far bigger fee than is usual in swap transactions, and Goldman persuaded Greece not to test the transaction with competitors to ensure it was getting good value for money.

Goldman Sachs’ 2nd-most-powerful executive pulled an audacious move to get his 1st job on Wall Street

Gary Cohn

Wall Street titan Gary Cohn, the president and chief operating officer of Goldman Sachs, last week celebrated his 25th anniversary at the bank.

Cohn, 54, actually has an incredibly inspirational backstory, which is detailed in Malcolm Gladwell’s best-seller “David And Goliath.” And because the summer interns have just arrived, we thought we’d share it again.

As a kid growing up in Cleveland, Cohn found out he had dyslexia, a reading disorder. He struggled in school. By the time he was in sixth grade, he had attended four different schools. Teachers and classmates had written him off as an “idiot.” Cohn has even said publicly that he was a “horrible” student.

What’s more is his teachers were unsure of his trajectory in life. One teacher even told his parents if they were really lucky, he might grow up to be a truck driver.

Cohn graduated from high school. He also graduated from American University in 1982.

After college, though, Cohn didn’t immediately have a job or any interviews lined up. He did have “passion for financial markets,” but that was pretty much it.

By July he took a job “to appease” his father selling window frames and aluminum siding for the home-products division of United States Steel in Cleveland.

Around Thanksgiving, he went on a work trip to the company’s offices in Long Island. Cohn persuaded his manager to give him Friday off to visit New York City for the first time.

There he headed for Wall Street and the commodities exchange at Four World Trade Center. From the observation gallery, he watched the action in the trading pits with other Wall Street hopefuls.

Gary Cohn

That’s when he came up with a clever plan to make an introduction to one of the brokers. He left the visitors’ gallery and waited by the security entrance to the trading floor for a few hours. Nothing happened. He was about to give up.

“And then literally right after the market’s (sic) closed, I see this pretty well-dressed guy running off the floor, yelling to his clerk, ‘I’ve got to go, I’m running to LaGuardia, I’m late, I’ll call you when I get to the airport,'” Cohn told Gladwell in the book. “I jump in the elevator, and say, ‘I hear you’re going to LaGuardia.’ He says, ‘Yeah,’ I say, ‘Can we share a cab?’ He says, ‘Sure.’ I think this is awesome. With Friday afternoon traffic, I can spend the next hour in the taxi getting a job.”

It was truly a brilliant move, one most people wouldn’t have the guts to make.

It turned out the man Cohn was sharing the cab with was also running the options business for one of the big brokerage firms. Cohn didn’t know what an option was, but he pretended as if he did.

“I lied to him all the way to the airport,” Cohn told Gladwell. “When he said, ‘Do you know what an option is?’ I said, ‘Of course I do, I know everything, I can do anything for you.’ Basically by the time we got out of the taxi, I had his number. He said, ‘Call me Monday.’ I called him Monday, flew back to New York Tuesday or Wednesday, had an interview, and started working the next Monday. In that period of time, I read McMillan’s “Options as a Strategic Investment” book. It’s like the Bible of options trading.”

(By the way, Gladwell notes, it still takes Cohn about six hours to read 22 pages.)

After a few years working on the floor of the commodities exchange, Cohn was contacted by Goldman Sachs. In 1990 he accepted a position in Goldman’s commodities trading unit, J. Aron. In 1994 he was made partner — one of the most coveted titles on Wall Street.

Now he holds one of the top spots at the Wall Street investment-banking giant. He has even said he wouldn’t be there without his dyslexia.

“The one trait in a lot of dyslexic people I know is that by the time we got out of college, our ability to deal with failure was very highly developed,” Cohn told Gladwell. “And so we look at most situations and see much more of the upside than the downside. It doesn’t faze us. I’ve thought about it many times, I really have, because it defined who I am. I wouldn’t be where I am today without my dyslexia. I never would have taken that first chance.”

Bottom line: You have to take risks.

Goldman’s New Cop Is FBI Agent Who Put Away Madoff, Rajaratnam

Patrick Carroll (left) and David Chaves head white collar crime and securities fraud units at the FBI’s New York office. Their team pursued insider trading with some of the same tactics used on organized crime and drug cartels.

The FBI agent who oversaw the Bernard Madoff investigation and helped pioneer the use of wiretaps that yielded dozens of insider-trading convictions is now working for Goldman Sachs Group Inc.

Patrick Carroll, 50, joined the bank after almost a quarter century with the Federal Bureau of Investigation, the latest in a line of former feds who’ve moved to Wall Street firms. He is a vice president in Goldman Sachs’s compliance, surveillance and strategy group, part of a division overseen by Alan Cohen, global head of compliance.

Raj Rajaratnam, center, billionaire co-founder of Galleon Group, is surrounded by photographers as leaves Manhattan federal court May 11 after being convicted of insider trading charges. (AP)

While Carroll’s FBI career spanned bank robberies and organized crime, he’s best known for being at the investigative center of securities-fraud cases ranging from Madoff and billionaire fund manager Raj Rajaratnam to a $550 million Ponzi scheme used to buy expensive teddy bears.

His appointment comes as regulators and prosecutors are tightening scrutiny of financial institutions, sometimes charging banks as corporate defendants and imposing billions of dollars in fines following guilty pleas.

“It’s really about how Goldman is reacting to the tidal wave of litigation that now seems to be part of the ongoing government toolkit for regulating banks,” said Roy Smith, a professor of finance at New York University’s Stern School of Business and a former Goldman Sachs partner.

“It can help to have some people who know how government prosecutors and investigators think, some guy who has the mindset of an alligator.”

Michael DuVally, a spokesman for Goldman Sachs, declined to comment on the scope of Carroll’s work.

Joe Friday

A native New Yorker with a Joe Friday “just the facts” style, Carroll became an agent in 1991, after stints at Lehman Brothers and Merrill Lynch, in a bureau push to hire people with financial backgrounds following the savings-and-loan crisis. He got Series 7 and Series 63 licenses soon after graduating from Fordham University.

He rose to become supervisor of one of the New York FBI’s two squads investigating white-collar crimes, eventually overseeing as many as 25 agents.

In 2003 the FBI unveiled Carroll’s 18-month undercover securities-fraud case called “Operation Wooden Nickel.” It borrowed law enforcement techniques commonly used against drug cartels and mobsters.

To unearth fraud in the foreign currency markets, he sent an undercover agent posing as a corrupt trader to work in an exchange and used cooperating witnesses to record brokers in boiler rooms, banks and interbank forex brokerages. Almost 50 traders were arrested for cheating thousands of investors in rigged trades. At least 40 were convicted.

Hedge Funds

“Here you have professional criminals operating at major, well-respected financial institutions,” Carroll said in an interview. “That was kind of an ‘aha’ moment, that we could do it, that these allegations are correct and that we were also capable of getting to it.”

The strategy would later be applied to hedge funds, which proved tough to infiltrate as rogue traders committed crimes with friends or business school classmates, he said.

Small-time traders “would always complain to us, ‘Why aren’t you doing anything about the bigger guys?’” said Carroll.

The prosecution of Galleon Group LLC co-founder Rajaratnam was the first significant use of wiretaps in a securities-fraud case. The evidence was essential, said Richard Holwell, the former judge who presided over the trial and upheld the legality of the intercepts.

Controversial Wiretaps

“They provide a chance for the jury to hear it as it happens,” said Holwell, of Holwell Shuster & Goldberg LLP. “And there is something else — maybe if there is someone out there intent on breaking the law, they will now be more careful in light of the fact that their phone may be tapped.”

To date, more than 80 people have been convicted as part of the insider-trading initiative carried out by the Manhattan U.S. Attorney, the FBI and regulators. Wiretaps played a role in many, and helped persuade at least a dozen people to plead guilty and cooperate after they were confronted with their recorded conversations.

The wiretaps have been controversial. While a federal appeals court rejected Rajaratnam’s argument that the intercepts weren’t properly authorized, two federal judges criticized their use.

One said he was troubled by the FBI’s failure to stop listening to unrelated calls between a trader and his wife. The couple’s suit against 16 agents was dismissed May 15 by an appeals court.

Madoff Scheme

Carroll’s squad also had to deal with Ponzi schemes exposed in the wake of the 2008 financial crisis, including Madoff’s.

When prosecutors needed to question and arrest Madoff, they called Carroll, said former prosecutor Bill Johnson. Madoff, who ran the biggest Ponzi scheme in history, is serving a 150-year prison term and 14 others were convicted.

Carroll, who started in April, isn’t the first FBI agent from New York to join Goldman Sachs, said Peter Grupe, his former FBI supervisor.

Joseph Demarest, currently the FBI’s assistant director of cyber-investigations and a former head of the New York office’s international terrorism branch, also did a stint at Goldman Sachs in its Global Security unit before returning to the bureau, Grupe said.

Demarest didn’t respond to e-mail or voice-mail messages sent through an intermediary.

Carroll says he already knew many people at Goldman Sachs, having worked with “their compliance for many years.” His leaving was motivated by a desire for a new challenge after 25 years at the FBI, he said.

Given the fate of former employers Lehman Brothers and Merrill Lynch, he added with a wry smile,

“I haven’t told the FBI this, but every place I’ve left has crumbled.”

Interview: M&A advisers Michael and Yoel Zaoui

Michael and Yoel Zaoui

Brothers Michael and Yoel have advised on takeovers worth $152bn in two years and changed the fate of business empires

Michael and Yoel Zaoui, collectively Zaoui & Co, are sitting in their swanky Mayfair office discussing 12th-century philosophy. The deal-doing brothers may have advised on takeovers worth more than $152bn in the two years they’ve worked together but today their focus is on the Sephardic thinker Maimonides and his observation that “duality is not possible in a thing that exists of necessity”. It could have been tailor-made for them.

Spend any time with the Zaouis and you sense both a blurring of the borders of individuality and that the formation of their firm always had a certain inevitability.

Yoel and Michael puncture the cultural barriers that can otherwise impede international transactions. They were raised in Morocco and Italy, educated in France and have worked in New York and London. Their roots are north African Jewish.

Their suits are Italian. Their panache is French. Yoel supports Chelsea and Michael Juventus.

“It’s not just a matter of speaking different languages,” says Yoel, who, at 54, is the younger of the two. “It’s understanding how people think.” Once you can do this, mega deals are less likely to founder on nuances.

Businesses such as Zaoui & Co are sometimes referred to as “mergers and acquisitions boutiques”, as if an industrialist could pop out at lunchtime and return with a $20bn corporation in a box with a pretty bow on top. The term is both accurate and misleading.

The advice of these bankers costs millions and the customers who come to their Mayfair offices could as easily drop into nearby luxury goods shops. But their counsel has a wider impact than a diamond necklace or an Old Master painting: they change the fates of business empires.

Michael and Yoel Zaoui

Independent mergers and acquisitions advisers, long a feature of world banking, are enjoying a golden age. Multinationals are swallowing one another, notionally in order to raise returns to shareholders. In reality, the ambitions of chief executives also drive these power grabs and small but influential businesses such as Zaoui & Co advise these attackers and defenders on their battle tactics.

Michael is, for example, credited with rescuing the €41bn merger of France’s Lafarge company, a building materials giant, and Switzerland’s Holcim, encouraging the Lafarge boss, his old friend Bruno Lafont, to become co-chairman rather than hold out for the job of chief executive.

“Yoel is the boy scout and Michael is the professor,” says the boss of one City securities firm when asked about the pair. “Yoel’s style is more transparent and approachable. Michael’s is more mercurial. I wouldn’t call him Machiavellian but he does tend to approach everything tactically.”

“It’s the return of the consiglieri in high-stakes M&A,” says Yoel.

Old-fashioned merchant bankers, superseded in the 1990s by rivals at big Wall Street investment banks, are back in fashion. Their tight-lipped services are in demand at a time when proliferating gossip networks, such as Twitter, increase the chances of deal news leaking.

The boutiquiers, typically seasoned financiers with good contacts, only sell advice. They do not earn fees for supplying capital or managing cash as senior bankers at bigger rivals often do.

This enhances their objectivity in the eyes of some chief executives and business owners. In the case of the Zaouis, these include the Bettencourt family, which controls French cosmetics group L’Oréal, and Sir Andrew Witty, boss of GSK, the UK’s largest pharmaceuticals group.

“The clients are comfortable with us in the room during a deal because we are so involved and hands-on,” says Michael, whose relationship with the Bettencourt family won Zaoui & Co its mandate to advise L’Oréal on buying back €6.5bn of its shares from Nestlé in February 2014. “They can rely on our presence. That isn’t always possible with senior bankers from big investment banks.”

 . . .

The brothers were born in Morocco — Michael in Fez, Yoel in Casablanca — but left as boys in 1964. Their father Charles, a former chef de cabinet of the Moroccan government, had taken a job with the UN in Rome. They lived on the Aventine Hill close to the Coliseum.

“We had the privilege of growing up in two sunny countries,” says Michael. When Charles moved to Unesco in Paris a few years later, the family followed.

The desire to succeed was instilled in them by both parents. According to Michael, their father was “very, very smart.

He had a long-term vision of a kind I’ve never seen anywhere else. But he was not a business person at all.”

He adds: “The drive for performance came from Mother. She was very focused on grades and would ask, ‘Have you done your homework?’ and ‘Why did you come out only second in this exam?’”

After Charles’s death in 2006, the brothers returned to Morocco. “It was important to go back to our roots,” Michael said.

They located the spot in the Mellah, Fez’s Jewish Quarter, where their grandfather’s small jewellery workshop had been. The poverty of the place shocked them and brought home why “the struggle for education” had been a central feature of family life.

“When you lose someone, you pause and reflect on his life. I realised then the journey he had travelled,” says Yoel. The Mellah was “a different world” to the one they now inhabit, jetting between London, New York and continental European capitals.

But they are always aware of it as a starting point, a source of perspective as well as identity.

The loneliness factor is very real. I can’t begin to tell you how many late night calls I get from some clients – Michael Zaoui

The alliance of the brothers within a boutique — a common exit vehicle from big investment banks for senior bankers aged in their forties and fifties — was long predicted within the gossipy M&A business.

“Everybody talked about it more than we did,” says Michael, drily.

But for almost two decades they competed for clients as senior bankers at rival US investment banks. Yoel ended up as head of global M&A at Goldman Sachs while Michael was chairman of European M&A at Morgan Stanley.

They even advised opposing camps. Yoel backed up India’s Mittal Steel on its €27bn bid for Arcelor in 2006. Michael helped defend the Luxembourg-based steelmaker, which capitulated. Win some, lose some. Michael had assisted Canadian metals group Alcan in grabbing Pechiney, a French rival counselled by Yoel, for €4bn in 2003.

Then, in 2013, they joined forces. The business plan of Zaoui & Co was essentially a Post-it note with the words “Allons-y!” scribbled on it. “We didn’t want a strategy,” Michael shrugs.

At the start of our interview, their PA issues each brother with a tiny cup of espresso, a weeny packet of French ginger biscuits and a small bottle of Evian. They slide their BlackBerrys back and forth across the boardroom table, reading each other’s messages and pinging new ones to clients.

Both men rest their chins on their right hands and hold those water bottles with their left. When I glance away, they have adopted a new, identical pose by the time I eyeball them again.

Both are voluble on pet topics: Yoel on deal tactics; Michael on the arts. Michael is a governor of the Southbank Centre and adores classical music, observing that a well-lived life passes from Beethoven to Mozart to Bach (from passion to harmony and, then, acceptance).

But vault doors clang shut in response to questions about their families. They both now live in Kensington and Chelsea, an enclave for the super-rich. Both are married and both have a couple of children but that is as far as they will go. Secrecy is reflexive for deal advisers for whom discretion is a vital professional qualification.

Yoel is scandalised when asked who referred US engineering group Dresser-Rand to them for advice on a $7.6bn bid from Siemens. That’s confidential, he says. I tell them that being a journalist I am not strictly a gentleman, and so may ask intrusive questions.

Michael and Yoel Zaoui

Later, I read the pair this quote from a senior Wall Street banker:

“The Zaouis have a very good reputation. The bulge bracket houses have nothing to lose sleep over. But if I was at Rothschilds [a relatively large, long-established independent bank] I might be worried.”

“Who said that?” Yoel demands. Mind your own business, I say. “So now I’m a journalist too?” asks Yoel.

They fall about laughing. You can see them thinking: imagine it! Yoel Zaoui working as a journalist! The idea!

They dissolve into laughter a second time when describing Yoel’s baby steps as an investment banker in the late 1980s. Having completed a French finance degree and a Stanford MBA he was hoping to convert a summer placement at Goldman Sachs into a full-time job.

“I was thinking, ‘What if they don’t offer me the job?’” he says. They roll around chortling, struck, presumably, by this thought: Yoel Zaoui, of all people, worried Goldman would give him the bum’s rush!

In the event, both Goldman and Morgan Stanley wanted Yoel. Michael, a Harvard MBA with a French law degree, was already at Morgan Stanley. So Yoel stuck with Goldman, thinking it was best to make his way in a workplace where he wasn’t a colleague’s kid brother.

The Zaouis can be just a bit full of themselves. A graphic from a financial weekly portraying the pair as the strikers in a fantasy football team of London M&A bankers adorns their boardroom.

They answer with an incredulous “No” when asked if it had been nerve-racking making their first calls to old clients when they no longer had big banks behind them. Why wouldn’t Europe’s top industrialists want their advice?

However, the pair do not take themselves entirely seriously. Michael’s parting shot at the end of one of our meetings, triggered by a mention of photographs for this article, is:

“If there is an opportunity to make us look like rock stars or fashion icons, we’ll happily oblige.”

The reference may be to breathless articles in the press, including a profile in French Vanity Fair. The photographs that illustrated that piece shamed balder, rounder rivals in baggier suits. Michael is described as having “la voix d’Al Pacino” and the “physique de Ben Stiller”.

 . . .

There are no prizes for self-effacement in investment banking, an arena where people with big egos do big deals for big rewards. It can be an aggressive, backbiting business. Yet it is hard to find rivals with a bad word to say about the Zaouis.

Some, however, question Michael’s decision to quit Morgan Stanley and go into business as a one-man band. Would it not have been braver to hang on and help the bank weather the credit crunch?

Michael says: “I was 50 and figured either I stay on and bow out gracefully later — which is not always possible — or I had the energy and ambition to do another lap on a different track.” A former colleague, now a senior executive at a different investment bank, says: “There was never any suggestion that Michael had a duty to stick around. It would be wrong to describe him as a sole trader. But he wasn’t institutional in any sense. He didn’t share his client relationships with anyone.”

After the deal has been announced, you feel a sense of relief. Then you miss the deal. You miss the adrenalin – Yoel Zaoui

Yoel left Goldman Sachs in June 2012. “You have to recognise that working for a big bank is a young person’s game. You don’t want to be viewed as this guy who’s just hanging around,” he says.

The most trenchant criticisms you can make of Zaoui & Co apply to all M&A bankers. When they join Wall Street banks in an advisory panel, it means extra cost for shareholders. Meanwhile, the fees paid for a successful deal may give these consiglieri an incentive to engineer one, even at a bad price.

Nevertheless, boutiques have an established place in the financial ecosystem. They are manifestations of the relationships a shrewd banker can build up during a career. The chief executive of one vast company says:

“You should not underestimate how lonely this job can be. Some transactions might require you to fire your immediate colleagues. If you have stayed close to an adviser through both your careers, you can tell him things you might not tell your wife.”

Michael says: “The loneliness factor is very real. I can’t begin to tell you how many late night calls I get from some clients.”

Isolation can nag at the adviser as well as the advised. Yoel calls me in April just after Nokia of Finland announces it has agreed to take over Alcatel-Lucent of France for €15.6bn. Being sole adviser to the French telecoms group is a big feather in the firm’s cap.

But he sounds deflated. He says: “When you’re working on the deal, you’re in a bubble and you’re anxious to see how people will take it. After it has been announced, you feel a sense of relief. Then you miss the deal. You miss the adrenalin.”

He says he misses the deal team too: the Alcatel-Lucent people, the lawyers, the accountants. After working long hours together for weeks, they all go their separate ways.

Until the next time. London has “endless possibilities”, Michael says. It is a great place for businesses, he adds, because politicians are friendly to wealth creators.

British bankers, many of whom feel vilified by politicians and press, would scoff at that notion but the British capital is a popular destination for French expatriates, including entrepreneurs and bankers fed up with high taxes and restrictive employment laws.

Asked whether he and Yoel are “non-doms” — beneficiaries of a favourable UK tax status for wealthy foreigners — Michael arches his eyebrows and declines to answer.

London he says, seeking safer ground, “is lively and full of interesting people who are here for good or passing through for some period of their life”. The brothers may have passed through Rabat, Rome, Paris and New York. But London feels like home.

Jonathan Guthrie is the FT’s City editor

Michael Zaoui

Born Fez, Morocco, 1956

Education Masters in Law from Université de Paris, doctorate from Université Panthéon-Sorbonne, Harvard MBA

Career Joined Banque Rothschild in Paris 1978 and Morgan Stanley in New York in 1986. Moved to London in 1990. Promoted to head of European M&A. Steps down to become independent adviser in 2008

Family Married to Anna, who he met in Paris 20 years ago. Has a son, 18, and daughter, 17

Interests Music lover. Governor of Southbank arts centre in London. Member of board of advisers to dean of Harvard Business School

Yoel Zaoui

Born Casablanca, Morocco, 1961

Education Doctoral degree in finance from Université Paris-Dauphine, Stanford MBA

Career Joined M&A department of Goldman Sachs in New York in 1988. Moved to London in 1989 and became partner in 1998. Promoted to head of global M&A and membership of Goldman’s management committee. Stepped down in 2012 to set up Zaoui & Co with brother Michael

Family Married, with a daughter, 17, and son, 15.

Interests Member of Stanford’s business advisory council. Chelsea fan. Voracious reader. Enjoys visiting islands

Portraits by Dan Burn-Forti