03 July 2018

Disgruntlement at Barclays as old guard said to resent influx of new staff

Barclays has been doing a lot of hiring. So far this year, the UK bank has added at least nine managing directors to its investment banking division in Europe, the Middle East and Africa. Last year, it recruited 40 managing directors and directors across its investment bank globally. Significant new hires are still being announced on an almost weekly basis as Tim Throsby, CEO of Barclays’ investment bank and Jes Staley, CEO of Barclays group, pursue their strategy of making Barclays’ investment bank great again. 

But amidst all the happy hiring, there are signs of insurgency. Headhunters suggest that Barclays’ staff, particularly in the U.S., are resentful of the newcomers whom they suspect of arriving on inflated packages and of rewarding anyone they themselves recruit in a vein of equal generosity. “The old guard are super-p*ssed,” says one U.S. fixed income headhunter. “It’s not a happy place right now.”

Barclays declined to comment for this article, and it might be argued that headhunters simply like to stir discontent in order to pick-off top staff. However, some Barclays insiders agree with the prognosis. “There’s a different culture at Barclays now,” says one London managing director. “People are coming in on really huge packages and not many seem to be generating the returns that were expected. It’s a bit like being part of the AA [Automobile Association] – if you’re a new member you get a special deal, while everyone who’s been around for a while misses out.”

Who are the new guard? In the U.S. you might want to be in with Chris Leonard, the head of rates trading who joined in June last year after spending around 12 years in self-employment running his own hedge funds. There’s also Eric Childs, the head of U.S. macro swaps trading, who joined in September last year after four years at BlueCrest, and Michael Lubinksy, the former RBS trader who joined last year via hedge fund Brevan Howard. As if to confirm suspicions of Barclays’ generosity, Lubinsky spent $5.5m on a beachfront home shortly after joining the bank. Both Childs and Leonard previously worked for J.P. Morgan, along with Throsby and Staley.

In London, traders say the new turks are a clique of senior people who live in and around St. John’s Wood (“The St. John’s Wood mafia,” says one.). They include Adeel Khan, a long-serving Barclays credit trader who has thrived under Throsby and was appointed global head of credit last September. There’s also Sharut Kalra, who joined from Goldman Sachs last year, and Asita Anche, the head of systematic market making who joined from Goldman Sachs last July. In equities, there’s Stephen Dainton and Nas Al-khudairi, both from Credit Suisse.  “It’s no longer about performance. You have to be in with them – you have to kiss the ring,” complains the disaffected MD.

It probably doesn’t help that there have been layoffs alongside the recruitment. 100 Barclays’ managing directors and directors lost their jobs at the start of the year. There have been subsequent cuts to electronic sales and execution and to credit.  There have also been voluntary exits, such as that of Hamza Hoummady to Goldman Sachs, and those gaps need to be filled – often at a premium to the rest of the market. “We have to pay more to get good people,” complains the MD. “- Everyone can see that the U.S. banks are increasingly dominant. Their home turf pays real money in fees, while in Europe it feels like a race to the bottom.”

Plenty of people at Barclays are happy, however. – When we ran our recent compensation satisfaction survey, people at the British bank were comparatively very contented with their pay, at least. Some insiders point to a refreshing commitment to the investment bank and markets business under Throsby and Staley after years of neglect under Antony Jenkins. Barclays’ first quarter results were good, particularly in equities, suggesting all the investment in new hires has been worthwhile.

Another longserving London MD says claims of disgruntlement are overdone: “You always get some complaints with new hires – it depends who you speak to. In general morale is fine right now and there’s not much grumbling. It helps that we got a fair few expensive people out the door at the start of this year.”

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