It is hard to imagine any investment bank executive coming to the sudden realization that what their business really needs is more chairmen. But over recent years it has become fashionable to approach senior client relationships in a more organized way than the traditional and haphazard sideways shift of experienced bankers into chairman roles when they have outlived their usefulness as business line managers.
Barclays is the latest to try this out. In June it unveiled a new initiative for some of its senior investment banking folk, with the creation of a global chairman’s group that sees eight of the bank’s top relationship bankers work together to drive client business.
If Barclays’ plan sounds sort of familiar, it should. In February 2020, JPMorgan announced a new executive committee of global chairs, headed by Carlos Hernandez. That move was variously seen as a way to counter the talent threat from boutiques, to promote a new generation of managers in their place without having to push experienced executives out of the firm, and to put an explicit and dedicated focus on client relationships at the most senior levels.
Gone was the old idea of a chairman role being simply a reward for long service and a quiet way to park someone without the hassle of paying them off.
It isn’t the first time that Barclays under chief executive Jes Staley – a former JPMorgan banker – has been inspired by his old shop, and it doubtless won’t be the last. But in the context of what Barclays has already done and still needs to do in its investment bank, it makes sense.
Staley knows that his investment bank, which proved its worth as a diversifier during the pandemic year, can’t rely on outsized trading revenues to keep delivering the goods. What it needs to do is up its game in strategic business, and that means a lot more emphasis on client relationships at the highest level. Fail to get that right, and the bank will never have the clout it is looking for in the vital areas of M&A and ECM, where it still most obviously lags its peers.
Nearly everything it has been doing in hiring in recent months is geared to that – including in Europe, where it has been notably underweight in some areas of client coverage. Lucy Demery has come in from Standard Chartered to run EMEA fintech coverage; Anthony Samengo-Turner has joined from Greenhill to run M&A in Germany, Austria and Switzerland; Bronson Albery has joined from JPMorgan Cazenove to run real estate in EMEA.
In the US, David MacGown and Tim Devine both jumped from Credit Suisse to add heft to FIG coverage and M&A, respectively, while in Asia, Ee-Ching Tay has joined from JPMorgan to run southeast Asia banking.
As the industry reshapes for a post-pandemic environment, senior hiring is on the increase across the Street
At the top of the tree now sits the new chairman’s group. It is in fact a more formal expansion of something that had already started: when Alex Lynch, who chairs the new group, was appointed as chairman of banking by former banking head Joe McGrath in May last year, he was only the second in that type of role, alongside Grant Porter, who has a background in natural resources.
Now six more have joined Porter under Lynch, spanning a clutch of industries where Barclays thinks it can make an impact. Richard Casavechia’s expertise is in M&A structuring, Kurt Kohlmeyer has been running investment banking for the US midwest, Brett Pickett hails from consumer and retail, Richard Siegel from building materials and distribution, Iain Smedley from power and infrastructure, and Mark Zanoli from technology.
Speaking to me in May, Staley described how he sees client relationships as a pyramid, with M&A at the pointy end, but how the tricky bit is elevating the dialogue to capture that from the top, so that the rest of the business can flow down from it.
“What is so difficult about the advisory business is that you need to find a banker who can walk into a boardroom and doesn’t talk about banking but can talk about the company’s business, be it a pharmaceutical or semiconductor company,” he said. “We have to build that, banker by banker.”
His problem is that this is not exactly news to any of his peers, who are all trying to do the same thing. As the industry reshapes for a post-pandemic environment, senior hiring is on the increase across the Street.
Even Deutsche Bank is getting stuck in again, its recent ability to pull the likes of Daniel Ross to run investment banking coverage in the UK and Ireland (from Barclays, as it happens), or Stephane Gruffat to co-head equity capital markets in EMEA (from Credit Suisse) giving some evidence of how far fears around the viability of the German bank’s investment bank have settled down.
It adds up to a great climate for the best coverage bankers. Whether there are enough of those to meet everyone’s ambitions – and at an acceptable cost to shareholders – is a different question.
