The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Asset management: Barclays disposes of a regulatory headache

Selling BGI removes restrictions on Barclays Capital; The firm can now deal with US mutual and pension funds

When Barclays announced last month that it had agreed to sell its investment manager, BGI, to BlackRock, the net gain on the sale of £5.3 billion closed an intense debate over whether the bank was adequately capitalized. So strong does Barclays now look that some analysts on the call to announce the deal even began to ask whether it is being too cautious and is too strongly capitalized.

You really could not make it up.

So the first words Barclays Capital chief executive Bob Diamond uses to describe the deal to Euromoney come as something of a surprise. "This deal was not about the capital," he says, "although it does benefit our capital."

What drove it then? Diamond says it was increasingly worries about related-party regulations that were restricting Barclays Capital, as the investment banking division of a bank that also owns an investment manager, from dealing with Erisa pension funds and 40 Act-regulated mutual funds in the US managed by BGI. "That was becoming a nuisance even when we were not big in the US. Once we bought Lehman it became a serious business issue for both Barcap and BGI."

BGI Institutional AUM

Total $2.2

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree