Bloomberg reports that Merrill Lynch is said to be cutting bonuses on average 50% on last year. The news agency quotes two 'people with knowledge of the situation' who did not want to be identified as the plans haven't yet been revealed to staff.
With revenues under pressure and cost containment the name of the game, Merrill, like most firms, will need to exercise restraint this bonus time. Having also received US government bailout money, politically it would have been difficult to have pushed the bonus boat out anyway. In the scheme of things, a 50% bonus reduction in this market doesn't, however, look too bad - although some Merrill staff, notably front office and M&A professionals, are likely to see far greater reductions.
And staying with the cost-cutting theme, Cityfile reports that Citigroup has put two of its corporate jets up for sale in recent weeks. Both are Dassult Falcon 900s, which sell at around $35m a piece if new. The firm is said to have several other jets in its fleet which are not (yet) on the market.
The Financial Times reports that, according to Thomson Reuters data, the value of cancelled M&A deals this quarter ($322bn) is now close to the total figure for deals that have actually closed ($362bn). This perhaps helps to explain why so many corporate finance types have been laid-off.
The Wall Street Journal reports that activist hedge fund Ramius Capital is to close four funds with a combined asset value of some $550m. The funds are said to have focused on convertible bonds, distressed credit and securities in merging companies.
Finally, CNBC reports that sovereign wealth fund China Investment Corp. has said that it is 'not brave enough' to invest any more money in US financial firms, after incurring paper losses of some $6bn in Blackstone Group and Morgan Stanley.
1. 'Don't you think that the headline should have read 'Ex-Top Firm' ? They screwed up in a bigger way than most, almost went bankrupt, and soon won't exist anymore (not that I'm bitter).
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