Jesse Bhattal, the former Lehman banker who went on to run Nomura’s global investment bank, has joined Lazard as a senior adviser based in Singapore.
The financial advisory and asset management firm said last night that Bhattal will “advise senior management regarding clients and strategic initiatives internationally, with a focus on the Asia-Pacific region”.
Bhattal was Lehman’s Asia-Pacific chief executive from 2000 until its bankruptcy in 2008, and joined the bank in Asia in 1993 — just before Lehman’s initial public offering and spin-off from American Express.
“Jesse Bhattal is one of the most respected and accomplished dealmakers in the Asia-Pacific region,” said Kenneth Jacobs, chairman and chief executive of Lazard, in a statement. “We are confident that his experience and relationships will benefit our clients in Lazard’s core businesses globally.”
Perhaps his most celebrated deal is the one he secured with Nomura for the acquisition of Lehman’s operations in Asia — after the failed bank’s US-based management cut their own deal with Barclays, leaving colleagues in Asia high and dry.
“That’s when Jesse shone,” said one Lehman insider at the time.
Bhattal’s colleagues had good reason to lionise him. They were among the best-paid bankers on the street in 2008 and 2009, thanks to the generous deal he struck with the Japanese. While their peers were struggling with some of the toughest conditions in the history of financial markets, ex-Lehman bankers were getting guaranteed bonuses at pre-crisis levels.
But the high-fives did not last long, as the realities of working within a Japanese financial institution frustrated bankers used to the more “entrepreneurial” culture at Lehman.
Those frustrations extended to the top. Bhattal, who joined the Japanese bank as chairman of Nomura Asia, first threatened to quit in July 2009, before securing a more influential role as head of Nomura’s global wholesale business and becoming the first non-Japanese to join Nomura’s executive management board in March 2010. But he eventually left for real in January 2012.
Lazard manages $160 billion of assets, as of September 2012, and earned $1 billion in revenues from financial advisory during the previous 12 months, putting it on a par with Bank of America Merrill Lynch and Credit Suisse, according to its own analysis.
However, all comparisons to the big banks end there — as Lazard likes to point out.
“No other publicly traded financial service firms have the same mix of businesses as Lazard,” it said in its latest shareholder letter. “Large integrated banks rely on their capital intensive businesses to support their financial advisory practices, have cost structures that are very different from ours and disclose only limited financial information regarding their advisory businesses on a stand-alone basis.”
Even so, Lazard has still faced pressure to cut costs and allocate resources to higher growth markets such as Asia, where it sees greater potential. It is aiming to achieve an operating margin of 25% by 2014 and to reduce its compensation expenses to below 60%.
Strategic M&A advice is the core of the advisory business, accounting for three-quarters of revenues, while restructuring advice makes up most of the rest.