�Laura J. Keller and Dakin Camp­bell Bid/ask

▶ ▶ In the Ecuadorean city of Cuenca, lo­cals blame ex­pats for push­ing up prop­erty prices ▶ ▶ “The wave of mi­grants has▶…▶be­gun to gen­er­ate fric­tion”

Bloomberg Businessweek (North America) - - Markets/Finance -

Cor­bat said Citi was fo­cus­ing more on “tar­get clients.”

At Deutsche Bank, CO-CEO John Cryan said late last year that the bank will cull its client list by half in cer­tain busi­ness lines. Bank ex­ec­u­tives have also spo­ken of tar­get clients in the divi­sion that han­dles trad­ing, where some 500 cus­tomers gen­er­ate 80 per­cent of rev­enue.

Gold­man Sachs Group’s equity re­search team has also di­rected its re­sources to­ward heavy-vol­ume hedge fund shops, ac­cord­ing to some­one fa­mil­iar with the bank’s poli­cies. Rep­re­sen­ta­tives of Gold­man Sachs and Deutsche Bank de­clined to com­ment.

Even smaller re­gional banks have lists, with Stifel Fi­nan­cial dub­bing a ros­ter of 21 tar­get clients its “Black­jack” list, ac­cord­ing to a per­son fa­mil­iar with the mat­ter. CEO Ron­ald Kruszewski says he’d be “sur­prised at any firm that is try­ing to sell a prod­uct that didn’t have a list.”

This chase for a few prized clients has been spurred by dwin­dling rev­enue in some bank busi­ness lines. Post- cri­sis reg­u­la­tions have made it harder for banks to make money by forc­ing them to hold more cap­i­tal against risky as­sets. In this en­vi­ron­ment, “ev­ery­one is talk­ing” about how to boost prof­itabil­ity, says Greg Braca, head of U.S. cor­po­rate and spe­cialty bank­ing at TD Bank.

To make the cut for Cit­i­group’s fa­vored list, firms typ­i­cally must gen­er­ate $2 mil­lion an­nu­ally in trad­ing rev­enue with the bank. Each of the Fo­cus Five firms trade mul­ti­ple times that amount. Rep­re­sen­ta­tives of all five de­clined to com­ment.

“It’s a dog-eat-dog world,” says Kevin Kelly, the chief in­vest­ment of­fi­cer for Re­con Cap­i­tal Part­ners in New York. “Its tough, but that’s just how it works.” Some say the odds of suc­cess on Wall Street are tilted more and more to­ward those with the deep­est pock­ets. Says Jeff Sica of Cir­cle Squared Al­ter­na­tive In­vest­ments in Mor­ris­town, N. J.: If you’re not a big client, it’s be­come “a ma­jor dis­ad­van­tage.”

The bot­tom line Cit­i­group and oth­ers on Wall Street have fo­cused their busi­nesses on the care and feed­ing of a smaller num­ber of top clients.

Edited by Pat Regnier Bloomberg.com

Su­san Lamy and her hus­band, Jean Pierre, owned a suc­cess­ful in­te­ri­orde­sign busi­ness in West­port, Conn., but they still wor­ried about how they would make ends meet in re­tire­ment. “Just pay­ing for the ba­sic ne­ces­si­ties was killing us, and we could see that there was no way that we would ever be able to stop work­ing,” says Lamy.

The search for an af­ford­able re­tire­ment spot led the cou­ple to Cuenca, a Unesco World Her­itage site in Ecuador’s south­ern An­des. They set­tled there in 2013 and now live in a spa­cious apart­ment with a ter­race over­look­ing the Ya­nun­cay River. Lamy says she and her hus­band en­joy a high stan­dard of liv­ing in Cuenca for around $2,500 a month, paid for by their So­cial Se­cu­rity checks: “This seemed to be the best pos­si­bil­ity for hav­ing a re­ally ter­rific life on a fixed in­come.”

The com­bi­na­tion of a sub­trop­i­cal cli­mate, well-pre­served colo­nial ar­chi­tec­ture, and low cost of liv­ing has made Cuenca a mag­net for North Amer­i­can and Euro­pean re­tirees—an es­ti­mated 5,000 now call the city of 500,000 home. Se­nior cit­i­zens also ben­e­fit from sub­si­dized health care and medicine, dis­counted trans­porta­tion, and a busy cal­en­dar of free cul­tural events spon­sored by the city.

While some re­tirees have opened cafes and small stores, Ana Paulina Cre­spo, di­rec­tor of ex­ter­nal re­la­tions for the city’s mu­nic­i­pal govern­ment, says the new ar­rivals haven’t made sig­nif­i­cant con­tri­bu­tions to the lo­cal econ­omy. One sore point is that many rely on Ecuador’s health-care sys­tem, where the tab for heart by­pass surgery is about $10,000, or less than one­tenth the cost in the U.S. “The wave of mi­grants has been grow­ing, and it’s be­gun to gen­er­ate fric­tion,” she says. “Our big­gest chal­lenge right now is to find ways to ben­e­fit from all the for­eign­ers.” The mu­nic­i­pal­ity is de­vel­op­ing poli­cies to bet­ter in­te­grate the im­mi­grants, in­clud­ing pair­ing re­tirees who have ex­per­tise or spe­cial­iza­tions with lo­cal univer­si­ties and cre­at­ing op­por­tu­ni­ties for them to vol­un­teer in the com­mu­nity.

When the swell of in­ter­na­tional pen­sion­ers be­gan about six years ago, lo­cal real es­tate de­vel­op­ers ini­tially thought the new ar­rivals would be wealth­ier Amer­i­cans in­ter­ested in buy­ing prop­er­ties, says real es­tate agent Mari­bel Cre­spo, a dis­tant re­la­tion to the mayor’s aide. In­stead, most turned out to be middle-class re­tirees from the U.S. who live on about $1,500 to $2,000 a month and choose to rent in­stead of buy homes. A two-bed­room condo goes for about $700 a month, Cre­spo says.

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