Wall Street’s salesmen and dealmakers, whose expense accounts help fill downtown chophouses and box seats at ballparks, are now treating clients to a different kind of entertainment: high-end workouts.
Pre-dawn and afternoon classes at Manhattan fitness studios SoulCycle, Barry’s Bootcamp and Flywheel Sports are growing popular with bankers who want to bond without loading up on liquor and fatty foods, according to traders and salesmen. John Abularrage, head of Tullett Prebon Plc’s Americas unit, takes clients to 5 a.m. sessions at Barry’s Bootcamp in Tribeca, where they run on treadmills and lift weights to thumping dance music.
“Some of them are more eager than you would imagine to trade a heavy dinner or drinks for a workout,” said Abularrage, 35. “When there’s a lot of entertaining to do for your job, you can get out of shape pretty quickly.”
Bankers who sell stocks or bonds have long plied mutual-fund traders and hedge-fund managers with tickets, meals and drinks in the hopes that friendship -- or at least familiarity - - will lead to more trades. Health-conscious clients increasingly view steak dinners as “three-hour ordeals,” said Chelsea Kocis, a 26-year-old former equity saleswoman.
“‘Let’s meet at 5 for a workout,’” she said, describing the way she’d invite out traders. “‘You can be home before your kids go to bed.’ That’s an enticing thing for a lot of people.”
Another equity salesman, who asked for anonymity because his company doesn’t let staff speak with reporters, said he e-mails clients a weekly invitation listing classes he will attend. The 5 a.m. sessions at SoulCycle in Tribeca, a block from Goldman Sachs Group Inc. headquarters, are the most popular with brokers and portfolio managers, he said.
Kocis quit her job at Bank of America Corp. last month to start a cycling studio in the Flatiron district called Swerve Fitness, which will cater to banker outings by letting people form teams and compete on stationary bikes. Eric Posner, one of her partners and a former HSBC Holdings Plc salesman, said some of the more than $1 million they raised to start the business came from traders they used to take to other classes weekly.
“There’s a bond you can form with someone through fitness that you can’t at a bar,” Posner said.
The boom in fitness studios on which Posner and Kocis are trying to capitalize dates to at least 2006, when SoulCycle opened and found New Yorkers willing to pay a premium for a 45-minute spinning class in a dance-club atmosphere with motivational instructors. While the sessions go for $34 apiece, customers can pay about twice that to reserve popular times early -- as much as the monthly membership dues at some gyms.
About 35 pay-per-class studios have opened in Manhattan since March 2012, according to Anita Mirchandani, co-founder of Fitmapped, an app that helps users find workouts in New York and Los Angeles. SoulCycle, bought by Equinox Holdings Inc. in 2011, now has nine locations in New York.
The sessions fit entertainment budgets that banks have shrunk during the past decade to cut costs and after scandals at firms including Jefferies Group LLC.
That brokerage paid almost $10 million in sanctions in 2006 to settle regulatory claims that a salesman used his $1.5 million travel and entertainment budget to improperly woo mutual-fund employees. He allegedly spent $75,000 on a trader’s bachelor party in Miami, where the Wall Street Journal said someone hired a dwarf to let guests toss him. Jefferies, which didn’t admit or deny wrongdoing, promised to overhaul its policies.
Turney Duff, a former hedge-fund trader, wrote in his book “The Buy Side” that some brokers around that time used to buy him cocaine and offer him prostitutes. A salesman’s job is to keep traders happy, since they determine who gets paid to buy and sell stocks for their funds, he said in a phone interview.
“If I wanted, I could have gone out every single night and not paid for a thing,” said Duff, who said he hadn’t heard of brokers taking traders to fitness classes. “You’re doing business with 50 or 100 people.”
Some bond salesmen, who requested anonymity because of company policies, said that the old way of entertaining is more effective. One said he suspects a co-worker uses client workouts as an excuse to leave the office early for triathlon training. A saleswoman, when told of the trend by a reporter, cursed and put down the phone to express her disbelief to colleagues. She said she prefers to take traders to Yankees games and then Sin City, a nearby strip club.
Steve Starker, co-founder of BTIG LLC, says he spins four or five times a week at SoulCycle in Greenwich, Connecticut, the Upper East Side and in the Hamptons, sometimes with clients. The brokerage also sponsored a charity spinning class for clients earlier this year at Flywheel, Starker said in an e-mail.
“All it is is bonding,” said Starker, who’s also a founding investor in Cyc Fitness, a chain of less expensive spinning studios geared toward college students and young professionals.
“You’re saying let’s go spin this morning, get a sweat and grab a juice after,” said Starker, whose company has studios in Austin, Texas, and Madison, Wisconsin. “There’s still the ones that love to be entertained with a good bottle of wine, steak and quiet conversation, but so many people are more health-conscious these days.”
Justin Sliney, 38, head of currency and rates trading for the Americas at Utrecht, Netherlands-based Rabobank Groep, said in a phone interview last week that he planned to take his former boss to an early morning Barry’s Boot Camp class in Tribeca. It’s fun to meet colleagues there because they can get competitive, he said.
“A lot of people who work on Wall Street, every hour of free time they have is precious and they want to maximize it,” Sliney said. “It’s a nice alternative to dinners or drinks. It’s a 6 a.m. alternative.”