Why Barclays' US bankers are leaving - for UBS and elsewhere
We suggested in early April that there might be trouble afoot in Barclays' US M&A business, and it seems we were right. Since then, at least 10 senior M&A bankers have quit, all for UBS. More exits are thought to be coming.
The Barclays exits so far are all senior people at managing director level. Most had been with Barclays for a decade or more. Six joined when Barclays acquired Lehman Brothers in 2008. The departures that emerged this week include: Laurence Braham, Richard Hardegree, Richard Casavechia, Ozzie Ramos, Jason Williams, Neil Meyer and Ken Tittle. They were preceded by Marco Valla, Jeff Hinton and Kurt Anthony, who left last month.
All those listed have gone to UBS. Valla, Tittle, Meyer, Ramos, Hardegree and Braham are former Lehmanites.
UBS's decision to hire swathes of senior bankers immediately after its forced merger with Credit Suisse looks curious. After all, when the merger was announced, UBS chairman Colm Kelleher said that adding Credit Suisse's US bankers to the UBS franchise would help achieve one of UBS's "strategic goals." Why hire externally now?
Senior sources at Barclays who've been party to the talks say it's because most of the best Credit Suisse bankers have gone already. "The Credit Suisse people in the US are actually not that great," they say. "There are very few good people left at Credit Suisse and UBS knows that." Senior Credit Suisse bankers have been quitting for everywhere from Spanish bank Santander to Truist and Morgan Stanley.
However, the real reason that Barclays' senior M&A bankers are leaving may have less to do with the pull from UBS and more to do with the push from Barclays itself.
In January this year, Barclays appointed Cathal Deasy, who was himself the former global co-head of M&A, and EMEA Co-Head of Investment Banking and Capital Markets at Credit Suisse, as its co-head of investment banking, based out of New York. Deasy, who had only recently been promoted at Credit Suisse and who hadn't previously been based in New York, is now managing Barclays' US M&A bankers. It's a move that doesn't appear to be popular.
"No one can understand what he says," says the Barclays insider of Deasy. "We're Americans and he's English. He's also just not very experienced - he'd only just been promoted at Credit Suisse and has no idea about the US market. He's arrived and is trying to tell the American bankers what to do." Barclays ranked 7th for US M&A in the first quarter. Neither UBS nor Credit Suisse ranked in the top 10.
Among Barclays' US bankers, Deasy is perceived as Paul Crompton's placement. Crompton, who has an operations background, has a reputation for cost-cutting and has run the investment bank since November 2021. Disgruntlement with Crompton appears to have been fanned by the perception that US bankers were short-changed in the challenging (everywhere) 2022 bonus round and claims that alleged verbal bonus guarantees were not honored.
If Deasy isn't popular among Barclays' large contingent of American M&A bankers, who is? The answer seems to be Marco Valla, the ex-Lehman banker who's just joined UBS. It was seemingly hoped that Valla would replace the former US head of Barclays' US investment bank, John Miller, who was displaced in January. "Everyone loved John Miller and everyone loved Marco Valla, who was his heir apparent," says the senior Barclays banker. "Then Deasy arrived."
More Barclays departures are said to be in the offing - and not just for UBS. The exits could simply be a changing of the old Lehman guard, but they could prove problematic for the British bank. Barclays' M&A bankers did unusually well in the first quarter, with a 15% revenue increase, compared to a 57% fall at Credit Suisse and stable revenues at UBS. If MDs keep leaving, this could be harder to repeat in the quarters to come.
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