Morning Coffee: Barclays' habit of hiring-not promoting top bankers continues. Citadel Securities is coming for these trading jobs first

Investment bankers have always known the wisdom of the old Hollywood proverb attributed to Sam Goldwyn – “we’re overpaying him, but he’s worth it”. If you want a strong M&A franchise, you need strong talent. Barclays, accordingly, seems to have come to the conclusion that it needed Andrew Woeber, its new global head of M&A, whose arrival was announced yesterday.

Woeber had been chilling out for a few years. He was once a partner at boutique firm Centerview, but left there in 2022. He represents the latest in a line of senior bankers that Barclays has hired-in, instead of promoted-up. 

The problem seems to be Barclays' banker pipeline. Less than five years ago, Barclays was still engaged in a battle with activist investors over whether it ought to have an investment bank at all.  A lot of senior bankers subsequently left in 2023 during a bout of internal politics surrounding the appointment of Cathal Deasy from Credit Suisse to the position of co-head of global banking. The kind of person that Barclays would have wanted to be the successor to Ihsan Essaid, its previous global head of M&A, who left in May 2024, would be exactly the sort of person who would not have been likely to hang around during that time.

This seems to have left Barclays without a strong bench to promote from. The bank's head of EMEA M&A is Stephen Pick, who is in his late 30s, was hired from Credit Suisse in 2023 and is probably still too green for a global role.  Dan Grabos has more years in the industry, but was only promoted to head of Americas M&A in 2023 and hasn’t given up his co-headship of global Industrials M&A.  There are a few “Chairman” figures like Larry Hamdan, but there’s nobody obviously able to step up into managing the franchise globally. 

Obviously, the best way to avoid paying up to hire people externally is to develop them internally.  But that’s much easier said than done.  In order to have a solid internal candidate for a job like global head of M&A, you need to have had a level of stable career development and low turnover of personnel that’s rarely seen outside the bulge bracket. 

Banking shares this characteristic with professional football – a winning team can either be built by consistency over more than a decade, or by having very deep pockets. Heads of investment banking Cathal Deasy and Taylor Wright were put into their jobs with an ambitious mandate to help Barclays climb up the league tables, but with limited resources to do so.  So they’ve been left trying to spend their budgets wisely and to pick up undervalued talent. 

The danger, though, is that a Citi-style phenomenon emerges, where incumbents are vying for top roles only to be displaced by an outsider. That's not good for morale, but as at Citi it seems to happen a lot at Barclays - just ask Deasy himself.  

Elsewhere, although the virtues of having a trading business have become very apparent in 2025, the industry still suffers from the problem that the fixed cost investments are huge, and get bigger every year, while the revenues tend to be concentrated on the top two or three players.  This means it’s very difficult to be a second-tier player, particularly in fixed income trading.

Citadel Securities is now offering some of them a way out.  If you install some software from a third-party provider called TransFICC, then you can effectively outsource your trading desk, letting your clients place their orders as normal, and then sending them on in anonymized form to Citadel for execution.  It’s not dissimilar to the standard model for equity market making, and in principle it allows the banks to concentrate on client relationships while offering better pricing and global capabilities.  But anyone employed in the trading business is likely to see it as the beginning of the end. Citadel Securities is focused on a few markets above others - 'US Treasuries, dollar, euro and sterling interest-rate swaps and US investment-grade corporate bonds.' Traders at second tier banks in these markets may want to watch out. 

Meanwhile …

Stifel has been expanding globally, most recently with the acquisition of Bryan Garnier in Paris this year.  But equity research is a tough business, and even though they included some well-ranked analysts, it has decided it can no longer justify maintaining teams in Zurich and Frankfurt. (Financial News)

It must be an extremely frustrating time to be a market strategist or economist, as last week’s forecasts quickly become historical documents as the policy environment changes. Goldman Sachs’ team have had to do a quick about-face on their call for a recession in 2025. (Bloomberg)

Consultancy firms do not give up fee income easily – the proposals that many firms submitted in response to a US government call to “recompete” and switch to success-based pricing were apparently regarded as “insulting”.  (FT)

An absolutely classic co-head structure which will be familiar to anyone who has worked for a Japanese bank.  Richard Volpe, who left last year, has been replaced as leader of the global rates trading team by Tetsuya Hiraoka, the head of Japanese rates trading, and Nat Tyce, head of EMEA rates trading. (Financial News)

“We are a pay-for-performance firm”, say Perella Weinberg, and given that CEO Andrew Bednar has received a $22.9m cash bonus, $3.6m stock awards and total comp of $27m, they are very much prepared to put their money where their mouth is.  The pay is a long way from market comparables in the super-boutique sector, but it reflects an extremely strong revenue year for the bank in 2024.  (Bloomberg)

Some assets are genuinely uncorrelated, and surprisingly resistant to macro uncertainty.  The latest round of Wimbledon Court No.1 debentures are pricing at £73,000, up 59% from the last issue, and could quite possibly trade at a premium to that on the secondary market. (FT)

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