Barclays Capital's surprise attack on Deutsche

When its audacious bid to hire 40 debt markets bankers from CSFB failed, Barclays Capital quickly turned its attention to Deutsche Bank. In an effort to build up its US and global debt businesses, it has been quietly hiring for months. Now the big name new recruits from Deutsche must ensure this investment bears fruit.

Email a Friend

All fields are compulsory

Your name:
Your email:

To include more than one recipient, please separate each email address with a semi-colon ';'

Recipient email(s):

Email yourself a copy?
Comments:

Add Your Comment

All comments are subject to editorial review.
All fields are compulsory

Your name:
Your email:
(will not appear)

You may email your comment to a friend
To include more than one recipient, please separate each email address with a semi-colon ';'

Recipient email(s):

Publish your name?
Receive email notification of new comments posted by other users?
Email yourself a copy?

Comments:

I have read and agree to the Terms and Conditions







Bob Diamond

Andy Schaeffer suddenly found himself in a precarious situation. He'd just been hired to head the US syndicate desk at Barclays Capital, but as his appointment was about to be announced news broke that his new firm was trying to hire 40 or more debt markets bankers from CSFB, including its US syndicate head Don Devine.
Not only would this have deprived him of his new post, but it would also have meant him falling victim to the same people once again.
Schaeffer had been head of US syndicate at DLJ for three years, and lost that position to Devine when CSFB bought DLJ last year.
Luckily for Schaeffer, the CSFB bankers decided to stay put. Despite having approached Barclays Capital's chief executive Bob Diamond themselves, and promising not to consider any counter offers, they did just that.

And that suddenly put Barclays Capital on the map in the US. Its small operation there had played second fiddle to Diamond's plans to build and consolidate the firm's position in the European capital markets for several years. But it now appeared that Diamond not only wanted to expand the North American operation, but was also prepared to pay to do so. The reported sum of $300 million over three years for 40 bankers in a mature business such as US high-grade bonds is hardly chicken feed. But he did show restraint in not entering into a bidding war.
It was this failed raid which ultimately lured Grant Kvalheim to join last month as Barclays Capital's global head of credit products. "Frankly, I only thought about moving here as a result of the CSFB episode," says the former head of global debt origination for Deutsche Bank and one of the driving forces behind the German bank's stellar rise up the international bond market league tables over the past six years.
A month or so after the CSFB story broke in late February, Kvalheim picked up the phone to call Diamond, a man he knew only by reputation, to see if he might be interested in his services. Diamond was, and Kvalheim brought his US and European heads of debt capital markets with him, Peter Goettler and John Winter, as well as seven other bankers based around Europe. Deutsche apparently managed to persuade more than 20 others in the US to stay.
There is a lot of movement right now among debt capital markets bankers. But these two raids by Barclays Capital on bigger operations, and its ability to snare, or nearly snare, such high-profile names as Kvalheim, or Jack Dimaio, John Walsh and Don Devine at CSFB have captivated the market.
Not all approve. The impression that Diamond has suddenly decided to spend a fortune on the US, raises the ugly prospect of yet another European bank spending its way to oblivion in the US.
It's not certain how the CSFB team might have fitted in, nor whether Kvalheim can expand the US business for Barclays, a task with which he had partial success at Deutsche.
But the fact is, as the hiring of Schaeffer demonstrates, that Barclays has been quietly hiring since the middle of last year, when it appointed Robert Griffin as its first head of investment banking for the Americas. The attempted raid on CSFB - although it was really more of an acceptance of a request for asylum - simply put Barclays' plans firmly on the radar screen.
The reason for the expansion, and the timing of it, is pretty simple, explains Barclays Capital's chief executive officer for the Americas, Tom Kalaris. "We have always wanted to be a full-scale European global investment bank, and for that we need to have a strong US and Asian franchise. But as we invested our resources after selling BZW in 1997 we concentrated on getting our European footprint right. Now that investment is maturing, so we're turning our attention more fully to the US and Asia."
Since last summer that has meant hiring selectively, going for individuals rather than big teams - the CSFB attempt and, to a lesser extent, Deutsche raid aside - and concentrating especially on hiring front office executives.
The reason for that, says Griffin, is because the bank already has a formidable sales and trading operation. "We're very good at trading different asset classes, which has allowed us to build a solid sales franchise and thus develop a robust distribution system here in the US. We have good products and good relationships, but we need to have more relationships and more people on the front end."
Recent hires include Richard Simonson as a managing director in the telecom/media sector who joined in May from Banc of America Securities, Robert McKillip in April, also from Banc of America Securities, as a managing director in the diversified industries investment banking group, Alok Singh from Deutsche Bank in April, who joined the financial sponsors group and Christopher Kinney, also in April, who joined the power sector investment-banking group from JP Morgan. The firm also hired a head of par loan trading, a head of prime brokerage, and a head of high-yield and mezzanine financing.
The distribution system punches above its weight, according to Diamond. "Our US distribution system does fluster our competitors. We've never been out-executed on a US deal where we've been joint leads on."







Grant Kvalheim

That's some claim, and might ring somewhat hollow to those banks which underwrite dozens of deals, compared to the four Barclays US has been involved in so far this year.
But Barclays can at least point to an increase in business over the past 12 to 18 months to justify its expansion, and lend some weight to its claims. "We've been involved in twice as many deals in the first quarter this year as the first quarter of 2000," says Griffin. The number of lead managed deals only increased by one to four mandates but, continues Griffin, "we raised $6 billion as opposed to just $1 billion. And it's the same in the asset-backed market, where we've done three times the volume over the same period last year."
Page 1 of 3 Next | Single Page

No. 6: If you don’t give it to me you’ll only lend it to someone else and look where that got us

Abigail Hofman:

Barclays Capital's surprise attack on Deutsche

Email a Friend

Add Your Comment

US treasury market reaches breaking point

Top 10 financial definitions that are funnier since the credit crunch

Top 10 reasons to tell your boss you deserve a bonus this year

Nomura’s great leap forward: Will Lehman takeover help fulfil its global ambitions?

Eksportfinans turns to government for funding

Why Hank Paulson has failed as Treasury secretary

Middle East real estate debate: Middle East real estate holds its own in unsteady global markets

Plans Look To The New Frontier

Country risk September 2008: Money talks in a world of risk

US treasury market reaches breaking point

Nomura Eyeing Lehman Bonus Renegotiation

Nomura’s great leap forward: Will Lehman takeover help fulfil its global ambitions?

Corporate defaults: The LBO zombies set to stalk the market

Real estate: Global volumes slump in 2008, hangover predicted for 2009

Latest Issue