Abigail Hofman: April
Goldman Sachs has a problem but so does Bank of America. In late March, the chairman of banking and markets, Andrea Orcel, departed abruptly to take up a post as co-head of UBS’s investment bank. Commentators were surprised. Orcel had been at Merrill Lynch for two decades. Hailed as one of the top rainmakers of his generation, he had recently concluded the important UniCredit rights issue, on which Merrill acted as the global coordinator.
Clients love Andrea. Some colleagues are more cautious. His reputation is that of a deal-doer not a manager. A cynic would say that his career at Merrill had stalled, while Christian Meissner’s star was in the ascendancy. Meissner, recently promoted to global head of the corporate and investment banking division, joined BAML only two years ago. So Meissner’s elevation must have been bruising for Orcel, the Merrill veteran. Maybe Orcel wanted greater recognition within the firm, as befitted his strong roster of client relationships. Instead, Orcel had a ragbag of titles and roles that didn’t quite gel. He was chairman of banking and markets and president of emerging markets (ex Asia).
Orcel’s departure from BAML is a loss. However, for a while it has been whispered that he was not happy at the firm and was flirting with other suitors. A number of sources had suggested he was in the frame for a senior investment banking role at Deutsche Bank, for example.
His new role at UBS gives him the heavyweight status that he was seeking. But we should not forget that UBS is a bank teetering on the edge of the second division. There have been so many heads of its investment bank, and indeed the group itself, that I have difficulty remembering all their names.
Of course, Orcel is an FOE – as in a "Friend of Ermotti", the UBS chief executive. The two men worked together at Merrill Lynch for many years before Ermotti quit to go to UniCredit in 2005. Orcel needs to prove that he is more than a producer and that he can run his area of the investment bank effectively. Overall, the investment bank needs a period of stability. It remains to be seen if Carsten Kengeter, who has to take some of the blame for the Kweku Adoboli unauthorized trading loss, will stay the course.
As for Bank of America’s investment bank, it needs to hire and hire quickly. Yet another nail in the coffin for that ‘deep bench of talent’ theory. According to an internal memo seen by Euromoney, the likeable Jonathan Moulds, president of Europe and Canada, will retire at the end of the second quarter to pursue philanthropic projects and Meissner will be interim president of the firm in Europe and emerging markets (ex Asia). This appointment is still subject to regulatory approval and is in addition to Meissner’s role as head of corporate and investment banking.
This looks bad and is bad. A mole put it more endearingly: "We look like muppets," he moaned. Meissner is highly capable, charming and good with clients but his in-box overflows. He was promoted to his current role only in February. I simply cannot believe that in a firm as large as Bank of America, where more than 250,000 people work, chief executive Brian Moynihan and Tom Montag, head of the investment bank, could not have found a talented individual to step into Moulds’ role. I understand that Orcel’s unexpected and hasty departure caught the US firm off-guard. But this shooting from the hip solution is misjudged.
And talking of the senior management roundabout, Dick Parsons is stepping down as chairman of Citi this April. I was stunned to learn that his replacement is rumoured to be Citi board member Michael O’Neill. I do not know O’Neill although I once met him briefly. He is hardly an energetic injection of new blood. In 1999 he was appointed chief executive of Barclays plc. The day he was meant to take up the post, it was announced he had to step down because of a recently discovered heart problem. The following year, he took up the role as chairman and chief executive of the Bank of Hawaii, which he left in 2004. O’Neill resurfaced in 2009 as a main board director of Citi where he has obviously impressed. The medical profession can work wonders these days, but it is intriguing that a man who was deemed unfit to take on the stresses of executive life 13 years ago might soon be chairman of one of the world’s largest global banks.
And while we are on the subject of resurrection, a mole reports an interesting tale from the depths of Florida. Apparently Mole arrived at a tawdry resort on the ocean misguidedly selected by his wife, to find the place swarming with fat businessmen sporting large name tabs. Mole, a former Lehman investment banker, thought he spotted a familiar figure. In the lift that evening, confronted by a gaggle of the besuited businessmen, Mole tentatively enquired: "Was that Joe Gregory I saw with you earlier?" Joe Gregory was the former president of Lehman Brothers who was heavily implicated in the rash expansion of the firm’s balance sheet. "Oh yes," came the response. "Indeed that was Mr Gregory; he is our motivational speaker." The following morning, Mole checked out of the hotel and went in search of alternative accommodation.
And it would appear that Tina Jennings, the comely wife of the mega-successful, New Zealand-born, Moscow-based banker Steve Jennings, has also gone in search of alternative accommodation. Steve Jennings is the chief executive of Russian investment bank Renaissance Capital and is separated from his wife. Mrs Jennings, who is in her mid-40s, has started stepping out with Lord Lawson, the 80-year-old politician who was the UK’s chancellor of the exchequer under Margaret Thatcher. I am bemused as to what Tina, an Oxford academic, sees in the wizened peer but photographs show them beaming and ostensibly blissfully happy. I doubt I will ever meet Mrs Jennings but I hope to spot the rather hunky Mr Jennings when I attend the sixteenth annual Renaissance Capital investor conference in Moscow this June.