Wall Street invasion gathers pace in Europe
All is not well in the cosmopolitan corridors of global investment banks. American candidates have been imported to fill senior positions in Europe. Are Wall Street bankers strengthening their grip on this side of the Atlantic?
The notion that banks favour US employees is contentious. In investment banking, performance is supposed to be everything: the best person gets the job, whether they are from the US, Japan or Peru.
But the reality may not be that simple. In the past few months there has been a rash of job moves involving senior US staff in Europe. Lehman Brothers beefed up its European M&A leadership by moving Perry Hoffmeister and Carlos Fierro from New York. Goldman Sachs imported Rob Gheewalla to head European mezzanine finance.
European banks have also bolstered the presence of US bankers. Last month, David Fass and Michel Cohrs were promoted to co-heads of corporate and investment banking at Deutsche Bank.
In May, UBS appointed Americans Rick Leaman and Jimmy Neissa as co-heads of global M&A, and John Costas, also American, became deputy group chief executive.
Is this indicative of a swing in favour of Wall Street? Some think so, although there is a reluctance to confirm this on the record. "US banks like to have their own people on the ground to keep an eye on what's happening," said a senior headhunter in London. A UK banker said European staff had become less important in US-owned businesses: "We have moved down the pecking order."
US bankers occupy plenty of senior positions in Europe. American Gordon Dyal is co-head of European investment banking at Goldman Sachs; Peter Weinberg is co-chief executive of Goldman Sachs International; Harry Lengsfield, a former strips trader at Merrill Lynch in New York, is head of debt markets for Europe, Middle East and Africa at Merrill in London and American Michael Uva is head of European investment banking at Morgan Stanley.
If US banks favour their own, they are not alone. Nomura's European office is run by Hiromi Yamaji and Yugo Ishida. The Japanese bank recently brought in Naoki Matsuba to head its US equities division. ABN Amro has an assortment of Dutch bankers in strategic roles. At the corporate and investment banking unit of BNP Paribas in London, nearly half the senior positions are held by French nationals.
For conspiracy theorists, the recent swathe of senior US appointments is a continuation of a trend established in 1986, when Security Pacific, a US bank, acquired Hoare Govett, a UK broking firm.
Other purchases followed, including Citigroup's acquisition of Schroders in 2000, culminating in JP Morgan's proposed acquisition of a 50% stake in Cazenove.
In 2001, Sir Win Bischoff, former chairman of Schroders and now chairman of European investment banking at Citigroup in Europe, spoke of the Americanisation of the financial system.
In his book, Death of Gentlemanly Capitalism, Philip Augar, former head of broking at Schroders, wrote that international banking was moving to a hub and spoke model, with New York as the hub and London occupying a diminished position on the rim.
However, the notion that US banks are filling senior European shoes with US-centric bankers is debatable. John Moore moved from New York in August as head of fixed-income sales and trading at Bear Stearns. He said his nationality is immaterial: "Global banking is seamless and indifferent to national borders. To work in the industry you need to mirror that state of affairs. I am a banker first and a US citizen second."
Aiden Kennedy, partner at search firm Armstrong International in London, said US banks pulled out many American staff 10 years ago: "Firms opened with a high proportion of US bankers but quickly realised you need local staff."
There are many Europeans in top positions. Italians Claudio Costamagna, co-head of European investment banking at Goldman Sachs, Andrea Orcel, global head of the financial institutions group at Merrill Lynch, and Dante Roscini, head of the bank's capital markets and financing for Europe, the Middle East and Africa are examples.
Klaus Diederichs, the long-established German head of European investment banking at JP Morgan, and Philip Yates, the UK banker sent last month to be co-head of M&A at Merrill Lynch in New York, are not from the US.
There are also advantages to having senior US staff on this side of the Atlantic. Simon Hall, partner at headhunter Heidrick & Struggles in London, said American bankers raised the profile of European offices: "It helps to have someone with the ear of the US management team as a significant sponsor and driver of the business." Come the next downturn, the security of European banking jobs may be higher if there are more senior US bankers on the continent, not fewer.