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Opinion

22nd June: Jon Anda's return to Morgan Stanley

For me, this story has it all: the human element (man takes decision and then very publicly repents) as well as the corporate element (a battle to the death for talent between Morgan Stanley and Perella Weinberg).

Is new better? What do you think? In today’s brash, brassy world, it sometimes seems as if newness is all that counts. We scribes have known this for a long time. Ezra Pound wrote in his epic poem The Cantos: “make it new”. Fashion editors exhort their readers with diktats such as “Mushroom is the new black. Wear only mushroom this season.”


The lifestyle trend of “reinvention” is lauded: we chuckle approvingly about Madonna’s transformation from sluttish sex kitten to demure wife and mother (who writes children’s books in her spare time). Innovation is in, restoration is out: youth is terrific, age is tolerated. How often have you heard: “50 is the new 40”?  It was Henry VIII who perhaps took this obsession with the new to its ultimate conclusion by beheading old paramours. The words “going back” certainly didn’t apply to him.


Weigh the words carefully. Don’t they have different connotations to you? I’m moving forward: frothy, exhilarating, purposeful. I’m going back: leaden, depressed and, worst of all, boring. But the familiar can be compelling. Change is challenging. Fresh pastures are not always juicier, (if you’re a cow that is).


Where does this leave Jon Anda, who recently announced that he was going back to Morgan Stanley as a vice-chairman in the institutional securities division? In January, Anda resigned from Morgan to join the advisory boutique that Joe Perella, a former Morgan Stanley colleague, was establishing. For me, this story has it all: the human element (man takes decision and then very publicly repents) as well as the corporate element (a battle to the death for talent between Morgan Stanley and Perella Weinberg). There’s also the underlying theme of which model is the future: the full-service investment bank or the focused boutique?


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So why has Jon decided to nestle back into the bosom of mother Morgan? Is it a failure of the Perella outfit – which has taken forever to emerge from the womb. Or is it a success for John Mack’s Morgan Stanley? Remember, Mack is a man who went back too.


An impeccable source told me: “Mack had to regain momentum and get some high-profile hires under his belt.” But what motivated Anda’s change of heart, I asked? Doesn’t such skittish behaviour undermine his credibility? The source shrugged its shoulders: “Could it be CASH – that obscene four-letter word? Most people allow themselves to do compromising things for a lot of money.”


A corporate financier had a different view: “Anda’s expertise is really equity capital markets. And I’m not sure that will fit with the new Perella firm.” A colleague was more cynical: “Another vice-chairman of Morgan Stanley, Abigail. How many are there, [a reference to the firm’s recruitment in May of Chris Carter as vice-chairman]? I know the markets are worried about inflation but surely this is title inflation gone wild.”


What is important, however, is will Anda be happy in his new role or is he a pawn in a much bigger game? Perella said he wishes Anda well. And so do I. But in my experience, going back is normally the beginning of a long good-bye.

What do you think?

Chief executives love to drone on about two things: execution and succession. Monarchs are similarly obsessed – which supports my theory that today’s CEO is equivalent to the princeling in a former era – excessive rewards, overweening dominance and bizarre behaviour: think about the current stock option scandal in the US. Bill Gates, a paragon for our age, has shown how it should be done: signposting his withdrawal in an orderly fashion and giving all his money away.

Because of all the kerfuffle when Martin Taylor abruptly left his post in 1998, Barclays’ senior management were fixated on a smooth succession plan the next time. Matt Barrett, Barclays’ debonair beanpole of a chief executive, was due to retire in 2004. Who should inherit his mantle?  Many names were proffered in the press but the only two real contenders were John Varley, group finance director and Bob Diamond, chief executive of Barclays Capital.

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“Did Bob want that job?” I asked my mole. “Surely it’s more about paper-pushing than power-broking?”  “He certainly campaigned for it,” came the reply. And it was an interesting contest – the languid, patrician Varley frequently photographed in a three-piece suit (where’s the monocle I ask myself), versus the emollient American (with the baseball bat hidden beneath his baby blue Ralph Lauren sweater). Varley won but, in a Faustian pact, Bob got more power: he was given the wealth management division and then became president of the whole Barclays group.

My editor summoned me to his office. “Abigail,” he decreed. ‘Readers are bored with Bob. Let’s wind it up. Where’s he coming from?  Where’s he going to? The end.”  My carefully crafted four-part documentary reduced to two sentences. Crestfallen, I slunk back to my desk.

But it is an interesting question. Where is Mr Diamond going? Originally, I had thought a political career beckoned for him. He would reappear on the American stage and do the Senate (Jon Corzine) or public service (Hank Paulson) thing? But my mole disagreed: “He’s a Republican from Massachusetts. The timing’s all wrong.”

Another source believes that Bob still aspires to the top job at Barclays: “He may do a Gordon Brown to Varley’s Tony Blair. Get the board to agree that Varley will become chairman in two years and Diamond will take over as chief executive. If you look at where the money’s being made – it’s all Bob’s world. And that allows him to flex his muscles.” This analysis is persuasive. And it may explain the senior personnel roundabout in the other underperforming businesses (UK business  banking, Barclaycard, and UK retail banking) which are Varley’s responsibility. It makes me rather giddy but as far as I can work out there have been three different board members for UK retail banking in the last seven months. Ironically, today it is Varley who has something to prove.

Whatever he does next, Bob has achieved a tremendous amount in the last decade at Barclays. One of his peers told me: “When he started there, we all thought he was a bit of a dweeb. Yet look at what he’s accomplished. And from a non-existent platform.”

What worries me, however, is what will Diamond’s legacy be? Can it work without him? And that brings us back to succession. There are currently two co-presidents of the investment bank, Barclays Capital: Jerry del Missier and Grant Kvalheim. Bob retains board responsibility for investment banking.

Jerry and Grant both have fans but neither would win a Mr Personality contest. I don’t believe in co-anythings. It’s a way of postponing a decision. Bob needs to get off the fence. He should appoint a successor at Barclays Capital to shore up his legacy and reassure shareholders that what he has built is greater than one man. If he has to bring someone in from the outside, so be it. Inevitably, blood will be spilt. But that’s investment banking isn’t it?

My favourite author, F Scott Fitzgerald, wrote: “Let me tell you about the very rich. They are different from you and me. They possess and enjoy early and it does something to them.”  For me the difference lies not with the big-ticket items – the mansions, the planes, the yachts – but in the small things.

Last week, I visited a chief executive of a top investment bank. We spent a delightful hour discussing many topics. As I was leaving, I explained to him how to access my column on-line. The chief gazed at me quizzically. For a moment, I wondered if I had developed horns or, worse, an ulcerating rash on my face. Then the corporate communications charmer stepped in: “Oh no, Abigail. He doesn’t need to access your column on the internet. We always print it out for him.” As I said, it’s about the small things!

Next week, who did what at the Euromoney Global Borrowers and Investors Forum, and does size matter?

See more from Abigail Hofman

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