Lehman bankers look to Barclays as interest in Asia builds

Barclays Capital provided a small glimmer of hope for the thousands of Lehman Brothers staff in Asia this morning, with the news that it may acquire some of the bankrupt firm’s Asian operations. But some warned that Lehman’s Asian capital markets business may not be Barcap’s number one priority.

  • 18 Sep 2008
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Barclays, which on Tuesday agreed to purchase Lehman’s US investment banking assets for $1.7bn, is also considering the acquisition of certain Lehman units overseas, including some of its Asian operations.

The news raises hopes among Lehman’s over 3,000 Asian employees, who are facing sudden unemployment following the firm’s bankruptcy filing.

“The guys in the US have been told they will all be re-employed, so we are obviously hoping for something similar in Asia,” one Lehman banker told EuroWeek on Thursday.

Barclays declined to comment, but bankers said that some parts of Lehman’s Asian investment banking business would be a natural fit.

“The Asian equities guys can be feeling pretty confident, as that’s not a business that Barclays already has. They are very strong in loans and have a big debt team, so that is a less obvious fit, but at Lehman the two platforms are combined so they may have to buy the whole unit and then re-evaluate,” said the Lehman employee.

Lehman’s debt and equity capital markets businesses are run together in a group called “global finance”, headed in Asia by Joon Kee Hong, who joined in April 2005 from Merrill Lynch. While Barclays is understood to be more interested in the equity platform, the difficulties in splitting the two businesses may complicate any acquisition.

Barclays has also been linked with an offer for Lehman’s 280-strong Asian investment banking team, headed by Glenn Schiffman. Such a purchase would allow Barclays to add Lehman’s respected Chinese investment banking group to its own growing Asian franchise. Barclays has already this year recruited a team of 19 Asian M&A bankers from the former ABN Amro, in a sign of its ambitions in the region.

Barclays stressed it could give no guarantee it would acquire Lehman’s international businesses, but should a deal fail to materialise Lehman bankers may find themselves in demand from a number of other houses.

Several rival banks told EuroWeek they were in negotiations with Lehman employees.

“There will be no shortage of bidders,” said one capital markets banker, based in Singapore. “If you have room to add headcount, then you can get some really good people right now. We are interviewing people from Lehman and Merrill who would never have thought of leaving a year ago.”

Though Barclays has no formal right to first refusal, many Lehman bankers are waiting to see if they will be re-employed before committing their future elsewhere. Lehman told its Asian staff of Tuesday that they would receive September salaries despite the bankruptcy filing, asking them to continue to report to work as usual.

Barclays on Tuesday agreed to pay $250m for Lehman’s US investment banking, fixed income and equities sales, trading and research operations, including around 10,000 employees. It is also paying $1.45bn to acquire three Lehman US office buildings and has pledged to provide $500m of debtor-in-possession (DIP) financing to the bankrupt firm.

Read EuroWeek on Friday for more reaction to Lehman's collapse.

  • 18 Sep 2008

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
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1 JPMorgan 301,362.40 1365 8.53%
2 Citi 271,449.38 1152 7.69%
3 Bank of America Merrill Lynch 235,978.47 965 6.68%
4 Barclays 216,691.99 880 6.14%
5 Goldman Sachs 173,920.50 728 4.92%

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1 BNP Paribas 33,643.72 149 7.28%
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3 JPMorgan 25,483.12 69 5.52%
4 Bank of America Merrill Lynch 23,368.44 65 5.06%
5 SG Corporate & Investment Banking 22,643.54 106 4.90%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 JPMorgan 9,438.24 58 10.23%
2 Morgan Stanley 8,636.03 42 9.36%
3 Goldman Sachs 7,738.32 41 8.39%
4 Citi 6,445.29 48 6.98%
5 Credit Suisse 5,197.34 30 5.63%