November 30, 2023

Investment Banking

Let Your Investment Banking Do The Walking

Goldman Sachs isn’t the only bank adding staff in Milan

Goldman Sachs is shifting some of its Euro swaps traders from London to Milan. Bloomberg reports that the team are relocating early next year and that one or two extra people will be hired locally. Goldman isn’t commenting, but people tell us the move will impact four or five people, most of whom will have migrated by the end of January.

They are likely to be more than happy to move. As we’ve reported here before, Milan is now one of the most cost-effective places to be based in Europe from a tax perspective. “Most of us are thinking of going to Milan,” one senior Italian trader in London told us in October. “The tax advantage is huge. If I move there, I’ll pay 15% taxes. Here, I pay 49%.”

The Milanese approach to income tax is unusually generous. While France’s inpatriates regime allows French-based banks to nominate 30% of expat employees’ pay as a so-called tax-deductible “inpatriation bonus,” that bonus is contingent on its recipients remaining in the same job. When you change jobs in Paris, your tax perks disappear. In Milan, 70% of your pay can be tax-deductible and this remains the case when you change employers.  

The upshot is that offering the option to work in Milan has become a benefit that can help attract new employees. Elena Agosti, Nomura’s Milan-based head of sovereign supranational and agency (SSA) trading in Europe, said being able to stay in Italy was a major factor attracting her to the Japanese bank after she moved from JPMorgan in London to work for Unicredit in October 2020. Nomura is building out a trading desk there under her supervision.

Other banks are allegedly contemplating something similar. There are rumours, for example, that Citi might move some of its London rates traders to Italy too.

At the same time, there are signs that investment banking teams in Milan are being built out with staff moved from London. JPMorgan recently added Nicola Giffoni, an analyst it found working for Goldman Sachs in the UK. In August, Barclays added Matteo Barbero, a former associate in TMT M&A at Citi in London, who joined as a VP. Traders who moved to Milan previously are finding new roles in a deepening employment market – Paolo Buscaglia, the former head of peripheral EGB trading at Barclays in London, just joined Unicredit after moving to Milan in 2020. Hedge funds are hiring there too: Eisler Capital is in Milan these days.

Milan has its own source of homegrown banking talent: Bocconi. The city’s university runs a Masters in Finance program whose students have historically gone to jobs in London, but can increasingly stay at home. They’re not the only ones chasing local jobs. “Everyone wants to go to Milan,” says the London trader. “Not just the Italians.” 

An MD who moved to the Italian city a few years ago says the living is also superior. “It’s not just about the taxes for expats, it’s cheaper to live here than in Paris or Frankfurt and your quality of life is better.”

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