Bob Diamond returns to banking
Bob Diamond is making a dramatic return to banking, launching a vehicle with Africa's youngest billionaire that hopes to raise millions of dollars to invest in African banking.
Mr Diamond is partnering with Ashish Thakkar, chief executive of Mara Group, a $1bn conglomerate with business in 19 African countries.
The two financiers have approached investors hoping to raise $250m and aim to list the cash shell on the London Stock Exchange before the end of the year, according to people familiar with the initial public offer.
The vehicle, known as Atlas Mara, plans to buy a stake in an African bank. "They plan to take control of an African bank and grow around it", one person with knowledge of the deal said. "It will be a multi-country operation, but not pan-African," the person added.
Atlas Mara plans to list its shares on the London Stock Exchange in about 10-15 days if the roadshow and the capital raising goes as planned. The vehicle has yet to secure any funds, but its backers are confident of reaching the $250m target. Mr Diamond, through a spokesperson, declined to comment and Mr Thakkar could not be reached.
Mr Diamond left Barclays last year after the bank was fined for manipulating the Libor interbank lending rate. The American banker had transformed the British bank, spending billions of dollars building an investment banking operation which he oversaw for years. Since his departure in 2012, he has kept a relatively low profile.
(CNBC Explains: Libor)
Mr Diamond quietly set up Atlas Merchant Capital in New York several months ago. He sees the vehicle as akin to an old-style merchant bank that will engage in a series of deals in collaboration with partners.
Although Mr Diamond has been involved in a couple of recent US deals, including a personal investment in asset management business Incapture, Atlas Mara is his first merchant bank deal.
He has made no secret of his desire to focus his investment strategy on Africa, already the location for much of his family foundation's work. He recently met senior officials in Nigeria, fuelling suggestions he may be seeking to buy one of the country's troubled banks.
The Atlas Mara acquisition vehicle resembles similar cash shell companies launched in 2010 and 2011 by financier Nathaniel Rothschild to buy mining and oil assets. Vallar and Vallares, as they were known, attracted $1bn and $2.2bn in their IPOs in London. But since then Vallar has been hit by controversy after it invested in Bumi, the Indonesia-based coal mining group. Vallares, on the other hand, has performed better with its bet in Iraq's Kurdistan oil sector.
More from the Financial Times:
Sub-Saharan Africa is attracting banks because most of the region's 1bn population does not use banking services – only a quarter of the population holds a formal bank account. Fewer than five per cent of Africans have a credit card, according to industry estimates.
Africa is largely dominated by a few regional groups – including South Africa's Standard Bank, Ecobank, a Togo-based pan-African bank with business across the continent, and Nigeria's United Bank for Africa, which is expanding outside its home base.
International banks including Standard Chartered and Barclays have also invested heavily in the region, and Africa has also attracted the investment arms of the likes of JPMorgan, Deutsche Bank, Credit Suisse and Citigroup.
Sub-Saharan Africa is experiencing its strongest economic growth in decades, supported by higher-than-historical commodities prices, political stability, strong foreign direct investment flows and better governance.
The International Monetary Fund estimates the region will grow next year at a rate of 6 per cent, second only to developing Asia's growth rate of 6.5 per cent, and well above the global rate of 3.6 per cent.
Mr Diamond, who lives is New York, still has a home in London's Belgravia district and is a frequent visitor to the city. Last week it emerged that he would be appearing in court to give evidence in a case brought against Barclays by Guardian Care Homes following the Libor interest rate scandal.
Additional reporting by Patrick Jenkins