Barclays Capital, the fast growing investment banking arm of the UK’s Barclays group, is looking to recreate the partnership models of Goldman Sachs and Lazard before they became listed companies.
The tactic is part of efforts to build a loyal cadre of senior managers as the bank goes through rapid expansion following the acquisition of Lehman Brothers’ US assets 18 months ago.
BarCap’s annual round of managing director promotions, now called partnership promotions, is the responsibility of a new partnership committee, led by Robert Morrice, Asia boss, comprising a mix of BarCap executive committee members and senior bankers.
“Partners” will have more say in the bank’s future direction and their pay will be more aligned with profitability.
BarCap is going through its biggest phase of home-grown expansion, with plans to take on hundreds of staff in Europe and Asia. It aims to replicate the scale that the Lehman deal gave its US operations.
Executives estimate they have 50-60 percent of their hiring in Asia still to do. In Europe 80-85 percent has been completed.
Senior BarCap bankers believe they have done a good job integrating and retaining Lehman staff in the US, a point conceded by Wall Street rivals, but acknowledge European and Asian expansion is more risky.
One senior executive said: “The real challenge now is the build-out in equities and investment banking. We want to be top three in those businesses globally within three years.”
Some observers question the speed of the European drive, which has involved recruiting several respected Citigroup executives, including Tom King, co-head of BarCap’s corporate finance business.
A former BarCap executive said: “I’m not sure they got the best people in Europe.
“A lot of them were B+ rather than A.”