Leaky Lehman

Lehman's European M&A team is proving more permeable than a kitchen sieve. Is the bank about to come a cropper?

Not according to headhunters, who say it's just a little localised dispute caused by the appointment of a new and assertive boss - and that Lehman's team wasn't up to much anyway.

Despite vigorous hiring, league tables suggest things haven't gone particularly well for Lehman in European M&A. Last year it ranked 15th for deals announced in the UK; in 2005 it ranked 10th, according to Thomson Financial.

But headhunters say the departure of three senior bankers in the past few weeks is down to the arrival of a new boss rather than to disillusionment at the failure to make any progress.

At the end of last year, Lehman appointed former Morgan Stanley banker Michael Tory to run the business. At the same time, Anthony Fry, the head of UK M&A who was hired two years previously from Credit Suisse, stepped down.

"This always happens when there's an overhaul at the senior level - it puts a few noses out of joint," says one corporate finance headhunter.

Fry is said to be scouring Morgan Stanley for replacement hires, while the likes of Stuart Upcraft, who was hired by Fry, are making a swift exit back to Credit Suisse.

Another headhunter says those who've gone won't be missed: "People have either been asked to leave or have been paid in a way that suggests they shouldn't stay. Lehman has a mixed quality bench and they're eager to upgrade it."