More than five months ago, the Federal Reserve and Office of the Comptroller of the Currency told some of the biggest banks to improve underwriting standards for non-investment-grade loans. The market is showing few signs of tightening as lenders chase lucrative fees.
Wall Street’s Class of 2013 is being poached earlier than usual by private-equity and hedge funds, showing it’s going to take more than Saturdays off for the biggest banks to keep their most ambitious employees.
Blackstone Group LP chief Steve Schwarzman received $374.5 million last year in pay and cash dividends, an increase of 76 percent from 2012, as the world’s biggest alternative-asset manager took advantage of rising equity markets to sell shares of companies.
The top 10 dealmakers at publicly traded private-equity firms took home at least $1.7 billion in dividends in 2013 as they seized on rallying stock markets to sell stakes in everything from a Chinese insurer to a U.S. theme-park operator to a French floormaker.
Federal Reserve Chairman Janet Yellen said last week that clarification on how the Volcker Rule treats collateralized loan obligations would be coming “reasonably soon.” Managers of the funds that package junk- rated buyout loans aren’t waiting to find out.