The Challenger - Barclays Capital
Not afraid to be different
Barclays Capital proves that not always following the crowd can be a successful ploy. Alistair Dawber reports.
If you go to London's imposing Canary Wharf you realise that Barclays Capital doesn't mind being a little bit different. It is not housed in a big gleaming tower with numerous empty floors, but in a building that could have been transplanted from the Square Mile. And when you take a closer look at their structure, it is also a break from the norm.
Many banks say that their greatest asset is the flexibility with which they approach the market, with individual bankers ready to help with a colleague's trade.
Not so Barclays. "We have a very clear split in terms of who does which deal," says Geert Vinken, the bank's global head of syndicate in London. "Because of this clarity we have built a strong track record with issuers and our debt capital markets (DCM) colleagues. It helps to give us much greater consistency."
The main protagonists on the syndicate desk are Wayne Hiley and Marco Baldini, as well as Vinken. They all have a lots of experience of the Barclays model.
"The structure and the individuals have been in place for five or six years now," says Hiley. "Very few of the top banks have had their corporate bond guys in place since 2000 as we have. Everywhere people have moved around on the syndicate desk, but with us, clients can guarantee consistency."
On the origination side Chris van Niekirk leads the DCM business, which according to the bank fits hand in glove the syndicate desk.
In the UK Jeremy Froud, Charlotte Weir, Mark Lewellen and Matt Thomas cover British corporates, while Jonathan Segel and Dominik Huhle handle German and Austrian clients. French coverage is led by Virginie Rabaey and Alexander Mimoun. Iberian DCM is led by Nacho Moreno, while in Italy origination is managed by Mariadele Gilardi. Lars Fischer handles Nordic and Dutch clients.
It is not just the bank's rigid structure that has helped them meet the challenge of the other big players in the market. According to Baldini, the secret of Barclays' success in the past 18 months is the experience they have gained, brought about by the breadth of their expertise.
"We do benchmark trades for the well known issuers," he says. "But we also do trades right across the spectrum, from short dated floating rate notes to the 50 year inflation-linked deals. We are active for whole business securitisations issuers and within the monoline wrapped arena. We have depth in terms of currencies and are in the top one or two for euros and sterling deals in the last six months. We are also the leading European bank in the US dollar corporate market."
The bankers argue that this longevity in the market, and the experience they have gained by doing a variety of business, helps them when other opportunities develop.
"Three years ago issuers like CIT and SLM Corp were looking at debuts in euros and sterling," says Vinken. "We opened these markets up for many in this sector and in the last 18 months we have dominated the market."
The bank has also been involved in some high profile deals in the last 18 months. On Telefónica's Eu5.5bn trade in January, the biggest deal of 2006 so far, Barclays was the only bookrunner on both the euro and sterling tranches.
Hiley also points to BAA. "Before the change of control issue surfaced, this was one of the best deals of the year," he says. "When the Ferrovial speculation surfaced, it all needed handling sensitively and in a very short period of time. We achieved a compromise for everyone."
|Key staff: Geert Vinken (global head of syndicate), Chris van Niekerk (head of corporate DCM), Wayne Hiley (corporate syndicate), Marco Baldini (corporate syndicate)
Best deals: Rentokil Initial (£300m 10 year), Telefónica (Eu2.25bn five year, Eu1.75bn 10 year, £750m 12 year and £500m 20 year) – both 2006; Telstra Corp (Eu500m five year and Eu500m 10 year), Westfield Group (Eu600m seven year and £600m 12 year) – both 2005
Front office headcount: 15
League table position (2001-05): 11, 2, 2, 1, 7