The former CEO of Credit Suisse wanted to realize his dream and shake up investment banking. His plan does not seem to be working out with Exos Financial seemingly in big trouble.
On Friday morning, January 13, the employees of Exos Financial discovered that a large part of the expected salary payments was missing from their bank accounts, which is how the «Forbes» article begins. At 10:30 a.m. on that January day, Brady Dougan, Chief Executive Officer of the US company, informed about 50 employees via Zoom that Exos would not pay their salaries.
The illustrious investment banker is best known in Switzerland as the former CEO of Credit Suisse, who earned hundreds of millions of dollars.
In Reverse Gear
In February the company reportedly laid off at least a dozen employees, with those affected said to have been given a week's notice without severance or other benefits. In addition to the layoffs, the investment boutique is now shrinking its operations, it says.
Nearly six months later, employees still have not received their full pay for January, although regular paychecks have resumed.
Dougan, one of Wall Street's most successful investment bankers, founded Manhattan-based Exos Financial in 2018. An insider said the 63-year-old executive believed his new digital-first bank would one day challenge established firms like Goldman Sachs. But his dream now appears to be turning into a nightmare.
Profiting from Loose Monetary Policy
Exos initially had plenty of tailwinds. Despite the pandemic, the stock market and everything related to technology boomed thanks to an accommodative Federal Reserve. Exos raised an estimated $175 million by mid-2021, including about $80 million from its founding partners. The company jumped into the spac boom almost immediately, participating in numerous IPOs.
But since the rise in interest rates last year and the stagnation of the IPO market, the company has had increasing difficulty building a sustainable business, according to the story. With the spac market all but dead, Exos' two exchange-traded investment funds focused on spacs were a flop, with one closing, and the other managing to attract a mere $8 million.
High Turnover, Low Morale
The company's strategy of experimenting with many businesses and acquisitions involving real estate lending, a mergers and acquisitions advisory firm, fixed income trading, crypto mining, artificial intelligence, and wealth management proved insufficient to reliably meet obligations like payroll, according to Forbes.
Even before Exos' recent salary shortfalls, employee turnover was high and morale low, current and former employees say. Since 2018, three different people have taken the helm of the company.
According to the business magazine, it spoke with numerous people close to the company for this article, including several current and former Exos employees. Exos declined to make Dougan available for an interview or to answer emailed questions.
