So we had Barclays appoint a group COO for the first time last year, in the shape of Jonathan Moulds (who was bumped by one of Jes Staley’s former JP Morgan colleagues, Paul Compton, after declining to follow Tom King as head of the investment bank). Former macro boss Mike Bagguley became COO of the IB.
Over at Deutsche, the move has been the other way, with former CIB COO Rashid Zuberi becoming head of EMEA and Asia Pac DCM for the firm's financing and solutions group (FSG).
Just in case you’re not up on your Deutsche Bank org chart, that’s NOT the same as head of DCM (a group which combines leveraged finance and the financing and solutions group). It’s the cash bonds and financing part of the FSG, which itself is a fusion of investment grade DCM and private side derivatives, essentially a rebranding of the old capital markets and treasury solutions unit.
Some banks with simpler org charts might just call it “head of IG DCM”, if that helps at all.
Anyway, in western Europe, the FSG was managed jointly by Niels Ackerman and Lorenzo Frontini, with the cash bond part handled (at first) by global debt origination co-heads Vinod Vasan and Nigel Cree. Vasan has now started his new gig, co-heading DCM and client solutions at UBS, while Cree is focused on managing the SSA business.
Frontini now becomes sole head, while Ackerman will become co-head of CIB coverage strategy and client accountability for EMEA. That sounds like a role that will partly be about making sure Deutsche’s corporate finance business works as a unified whole, taking a more systematic approach to coverage, and linking it to Ackerman’s former FSG colleagues.
Before the Deutsche reorganisation, which saw his departure, that was the idea behind Miles Millard’s dual role as co-head of EMEA corporate finance and head of CMTS (which was converted into FSG). It will be followed with the creation of a “client strategy co-ordination group”, to be chaired by Rainer Bender, head of corporate banking and coverage for Germany and Austria.
It’s also one of the first senior appointments made by Alisdair Warren, the bank’s new CIB head for EMEA, who came over from Goldman Sachs, and started at Deutsche recently.
Conduct... again
Unfortunately for Deutsche, it continues to be haunted by the ghost of conduct past. The bank is now said to be investigating a structured credit trade in 2009, where Colin Fan, head of the securities business, and several other senior employees coinvested in the junior risk alongside a Monaco hedge fund. Deutsche is said to have given them 30:1 leverage — and they’ve made out like bandits.
It doesn’t smell great, and it certainly doesn’t sound like something that would be signed off in the po-faced Cryan era Deutsche Bank, but there’s nothing necessarily wrong with it. Regulators, in fact, seem to want traders and bankers to have as much “skin in the game” as possible. They may not, however, be quite as keen if the traders get to put together the deals they invest their personal resources in.
Deutsche has also been named in a lawsuit (alongside Bank of America Merrill Lynch, Credit Suisse, Crédit Agricole, and Nomura) over the manipulation of the SSA market. GlobalCapital has also been named, as has some other yellow-covered magazine, as the major sources for the facts alleged in the lawsuit.
The argument is that the plantiff, Boston Retirement System, and anyone else who joins the class action, lost money because SSAs consistently traded on a wider bid-offer than their sovereigns, which were of “similar liquidity and risk characteristics”.
This was, the lawsuit alleges, thanks to market manipulation. There is even an “expert” cited who has studied the bid-offers, and who makes an assertion that an SSA “should” have the same liquidity characteristics as its sovereign.
When the Department of Justice and FCA conclude their work on looking into what happened (and release a trove of trader chat transcripts, grubbiest parts highlighted for convenience), perhaps charges and damages claims might stick, but this suit is unusual preceding, as it does, the findings of official probes.
But banks cannot afford to be cavalier. A whole swathe of firms — GlobalCaptial spoke to 12 top investment banks are declining to speak out against Brexit for fear of legal trouble, based on an overly conservative reading of the UK’s Electoral Commission guidelines. Clients who ask will receive a barrage of considered thought, economic scenario planning, and political possibilities, but the big banks are shy of putting anyone forward to give comment to the media.
Naturally, we think this is nonsense. As a media organisation ourselves, we’d like sources, so we’re talking our book a bit, but the wider Brexit debate is playing out in newspapers and on TV. The big banks are the biggest repository of financial and economic analysis ability going — and they’re not willing to give the public access to it, despite donations of up to £500k each to the Remain campaign earlier this year.
Last week we noted that Sarwat Faruqui heading to Mitsubishi UFJ to run syndicate, joining the other Citi alumni running the show there.
There can still be weird snobbery about Japanese firms, especially if making a move from a top flight shop like Citi, now, according to EMEA corporate finance head Manolo Falco, trying to lock up a permanent spot in the top three for DCM, ECM and M&A. But with all banks cutting staff, even the bulge bracket ones, a solid seat at a growing firm looks like a strong move.
GlobalCapital got the chance to sit down with Mizuho in New York, and talk about exactly that issue.
The firm is now top 10 in US investment grade — the top US banks, RBC, and the trio of firms going through extensive restructuring, Barclays, Credit Suisse and Deutsche, are ahead of it, but it has vaulted ahead of Europe’s top bond banks, on the back of its acquisition of RBS’s US loan book.
The rapid progress is helping to break down the old stereotypes, but the firm is still trying to get traction in ECM and advisory so it can strut its stuff as a full service shop, not just a bond bank.