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U.S. banks may get to spend some excess cash on loans or lines of business that European banks will seek to dump. Still, a cloud hangs over the outlook for bank M&A next year.
November 16 -
Business moves under his leadership contributed to the investment firm's struggles, and his dealmaking skills will be needed to make up ground on rivals like Sandler.
October 28
The last few months have been a coming out party for Barclays Capital Inc.'s recently overhauled bank M&A team in the U.S.
The outfit, which Barclays picked up when it
The deals are broad in scope — from a high-profile merger to an under-the-radar recap of a small Wisconsin bank. Wall Street rivals that handle big and small deals should view them as a warning shot, Barclays executives say.
"We hear every week from competitors and clients that Barclays is showing up globally in places we haven't been," says Jeff Weiss, Barclays' managing director and head of global financial institutions. "Barclays today is fishing in a different pond than we traditionally did, and we are seeing success globally."
Weiss had been with Lehman since 1983 and ran its global financials group when Barclays bought most of the firm's North American operations out of bankruptcy in 2008. Whereas his old team focused almost exclusively on the top 40 stateside banks, Barclays aims to woo those giants as well as super-community banks with as little as $3 billion of assets.
It has practical and competitive reasons for going smaller. There are very few large deals happening. Barclays also sees an opening to take share from regional bank M&A specialists such as Sandler O'Neill & Partners LP and
Small shops tend to be more vulnerable to the downturn in M&A and trading activity. They also lack what Brad Whitman, a co-head of Barclays financial institutions M&A, describes as the back-office "horsepower" of a giant bank with a global reach. The dearth of straight-ahead bank mergers plays to Barclays' strengths, Whitman says.
"Everything is a little harder to do these days. You can't just try business as usual.
Lehman was one of the inventors of some of the methods for valuing and securitizing troubled loans. That expertise won Barclays a lot of work from the government during the downturn. Most notably: it advised the Federal Deposit Insurance Corp. in its sale of the failed mortgage giant IndyMac in 2009. A knack for pricing questionable loans has been valuable in recent deals, too. Barclays helped Capital One Financial Corp. establish the $1.7 billion markdown on the mortgages it is to assume in its $9 billion
It came into play on the smaller end of the M&A spectrum, too. The family that owns Johnson Financial Group, of Racine, Wis., had considered using an asset valuation specialist to determine its capital needs. Instead, Barclays won the right to be its financial advisor and sole placement agent in part because it said it could handle all that work in-house. The family decided
Barclays Capital has been involved in three other notable deals since late summer that are more complicated than classic bank mergers: It advised Sterling Financial Group Inc., of Spokane, Wash.,
Barclays has been gearing up for the same. Among its recent hires: Tod Perkins, a former president and chief operating officer of Chapdelaine & Co., who joined as a managing director in July; Kevin Stein, who joined as a managing director in June from FBR & Co.'s capital markets division, where he was a managing director in charge of depositories; and Jon Bernstein, who joined as a director in June from Credit Suisse. Bruce Harting, a well-known Barclays banking analysts, moved over to the investment banking team in August.
"We brought on team players," Weiss says.
The team's executives says it is counting on Barclays' global reach for an edge over domestic rivals in
Greg Kennedy, head of depository institutions in the Americas, says that every Monday it holds a video conference with its global colleagues.
"We can take that first-hand color out to our clients," he says.