Barclays CEO in bid to stem US talent flight

Credit Suisse AG

02/06/2023 14:07

(Adds previous Astier role, more background on dealmaking)
    By Milana Vinn, Abigail Summerville and David  Carnevali
       NEW YORK, June 2 (Reuters) - Barclays Chief Executive
C.S. Venkatakrishnan held a virtual town hall this week to
address management changes that have led to about two dozen U.S.
investment bankers fleeing in the last few weeks, people
familiar with the matter said.
    The bankers have left for rivals including Citigroup Inc
 C.N , UBS Group AG  UBSG.S  and Jefferies Financial Group Inc
 JEF.N , Reuters has reported. Venkatakrishnan's intervention
underscores the pressure that the British bank is under to
protect its U.S. investment banking franchise.
    Barclays slipped to 14th place in Refinitiv's Americas
mergers and acquisitions league table in the first quarter of
2023 from sixth a year earlier, even as it jumped from ninth to
fifth in the Europe, Middle East and Africa league table, as its
U.S. dealmakers struggled to preserve market share amid a
slowdown in transactions.
    Venkatakrishnan promised during the meeting to invest in the
investment banking business to boost morale, the sources said.
    While he did not name bankers by name, Venkatakrishnan
addressed management changes that led to former Credit Suisse
Group AG  CSGN.S  investment banking and capital markets co-head
Cathal Deasy and former Morgan Stanley  MS.N  global capital
markets co-head Taylor Wright taking over in January as Barclays
global co-heads of investment banking.
    The elevation of these newcomers to the bank bypassed
tenured Barclays bankers that had been seen as possible
successors, including those popular with their colleagues such
as Marco Valla, who subsequently joined UBS, the sources said.
    Barclays in January had said it was in talks with Deasy and
Wright's predecessors, John Miller and Jean-Francois Astier,
about new roles. Miller left Barclays to join Jefferies last
month, while Barclays announced a new role for Astier this week,
naming him global head of financial sponsors. In February,
Astier had been appointed global chair of the investment bank.
    Venkatakrishnan said the changes were part of a succession
plan and reflected the bank's strategic focus on covering big
clients and the smart use of its balance sheet when it comes to
financing the deals of private equity firms.
    Responding to a question from one of the attendees at the
meeting about compensation, Venkatakrishnan said this would
reflect each employee's value and performance.
    Barclays declined to comment on the meeting. 
    It was the second such meeting that Venkatakrishnan has held
with bankers in recent weeks. The first was a shorter 10-minute
call last month where he did not take any questions, according
to one of the sources. 
    To be sure, Barclays has also been seeking to replenish
talent, hiring five managing directors in the United States and
another five around the world this year. Last year, the bank
brought in Jim Rossman as global head of shareholder advisory
from Lazard Ltd  LAZ.N  and this year it hired Christopher
Ludwig from Credit Suisse to work on shareholder advisory.
    Still, the exodus that Venkatakrishnan and other Barclays
executives have been trying to stem has continued apace. In
recent days, information services head Pete Contrucci left to
join UBS, while U.S. financial sponsors co-head Evan Rothenberg
and head of strategic finance Daniel Kerstein also exited, said
people familiar with the matter.
    Contrucci and Rothenberg did not respond to requests for
comment, while Kerstein declined to comment.
    Overall, the United States has been a bright spot for
Barclays, helping it score a 16% pre-tax profit jump in the
first quarter that beat analysts expectations. But it was its
consumer, cards and payments division, rather than investment
banking, that led the charge. Fees from advising on corporate
mergers and fundraising were down 7%.
    Mergers and acquisitions activity shrank to its lowest in
more than a decade in the first quarter of 2023, as rising
interest rates and high inflation reduced appetite for
dealmaking.

 (Reporting by Milana Vinn, Abigail Summerville and David
Carnevali in New York; Additional reporting by Svea
Herbst-Bayliss in Rhode Island; Writing by Anirban Sen; Editing
by Greg Roumeliotis and Christopher Cushing)
 ((Anirban.Sen@thomsonreuters.com; Twitter: @asenjourno; Reuters
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