Barclays Capital

My understanding is that they outsource M&A advisory

they took a lot of the M&A bankers from ABN Amro to build out their platform in the UK. they are a global bank, but domestically (US), I acknowledge them as financiers in transactions not advisors.

They may have done advisory work in the US that I am not aware of..

But I know more and more they are expanding their platform to do the advisory work by poaching bankers from troubled US banks.

they are adding m&a bankers (lateral hires)

Barclays = Ticking time bomb

So if there adding/poaching M&A bankers, do they have an M&A division, or perhaps there looking to start one soon?

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"The future belongs to those who prepare for it today" - Malcolm X

ticking time bomb??? what do you mean?

they are looking to start one soon. hiring senior bankers from ML/UBS/BCS left and right. for now, their IBD is mostly debt capital market and capital structure advisory stuff.

i'm actually interning there in London and can tell you that they hired about 40 m&A bankers from ABN Amro who are starting on Monday and transferred about 10 bankers of various ranks into the M&A team. It will focus primarily on Emerging Markets since they do not want to try competing with the BB's or Boutiques in traditional M&A. However Barclay IBanking has primarily been focused on the Debt Side where they are one of the Top 5 in the world in nearly every debt product out there (based on Thompson League Tables).

They are truely just financers in the US, but I can see one of the large UK banks buying up one of the large independent brokers and building out their global investment banking platform. The economics work out easily, it's all about raising the capital to complete the transaction.

http://brontecapital.blogspot.com/2008/06/barclays-strange-stranger-and-...

Long post but it sums it up well. Some of the groups within the bank might be great, but just be mindful of the exposure the bank has. As the blogger notes...

Barclays may be “too big to fail” but it is also probably “too big to bail out”.

Key passages:

Barclays decided to become a debt trading investment house. About half of its profits now come from the sort of activity that Lehman does. This market is hostile to pure debt trading investment houses.

Barclays did not buy an investment bank. There were persistent rumors that they would buy Lehman – but it never happened. The way that they built the bank was to steal whole teams from lots of investment banks – offering what investment bankers respond best to – lots of filthy lucre.

One year they put on a thousand staff at over 250 thousand pounds average salary. That seemed like an aggressive hiring spree to me. The next year they doubled it and I think (but cannot confirm) they continued to expand on this pace. This is a lot of cost base to add to a retail bank with declining margins.[Many have guaranteed bonuses so the costs don't go away as the market slows]

[Their] total [2007] gross derivative exposure is 29 trillion pounds. The gross credit swaps are 2.4 trillion pounds – but mysteriously the fair values (both assets and liabilities) are low.

In four years derivative exposure (total face) has gone from 5.9 trillion pounds to 29.2 trillion pounds. Credit derivative exposures have gone from 43 billion pounds to 2.4 trillion pounds. (I keep needing to watch myself when I type this. I am not use to this many zeros – and I deal in Japanese banks which account in yen.) Anyway this is about 50% annualized growth - reflective of the great Barcap hiring spree.

You have 3.8 billion pounds of “trading income” and only 42 million pounds of “value at risk”. The balance sheet however – and this is ON BALANCE SHEET exposure is a mere 840 billion pounds. That is about the same size as the whole of Citigroup! In the income statement they took a net 795 million pounds of charges against US subprime exposure. That is 19 times their value at risk.

Barclays held - and continues to hold lots of nasty stuff. Their marks on the super-senior CDOs are implying only a fraction of the problems at Ambac or AIG. How do I put it? When is it mark to model and when is it mark to myth?

They got the true subprime thing happening here. They own Equifirst - a true subprime lender. Or at least it was a true subprime lender - it now does FHA loans and the like. They purchased in March 2007 when it was early in distress. They got a few billion pounds of loans with the acqusition that they meant to securitise if the market reopened. Oops.

Appreciate the replies guys.

So I just read the BarCap press releases in this month, and in June they have included an energy investment banking team in Houston and built a healthcare investment banking team in New York.

Still unsure what these industry sector teams do? Do they work on raising Debt for specific transactions within the industry.. e.g. there natural resources investment banking team will help Xstrata raise debt for the Lonmin takeover?

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"The future belongs to those who prepare for it today" - Malcolm X

Wingman, that link is interesting but it doesn't take into account the bank's most recent earnings report.

This Thread is meaningless, use the damn search function.
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