Marsh move reverses ill tide for Barclays in Asia

The decision to relocate Reid Marsh, one of its most senior investment bankers, to Hong Kong forms part of its effort to restore confidence at the British bank.
Reid Marsh
Reid Marsh

Barclays' decision to relocate one of its most senior investment bankers, Reid Marsh, to Hong Kong is a tried and tested effort to restore confidence after a torrid time in Asia for the British bank.

Marsh, currently based in London, has been appointed co-head of investment banking Asia-Pacific and will arrive in the region in mid-August. But his move is effective immediately.

As vice-chairman of investment banking and chairman of the industrials group he has worked on some big-ticket deals, which include providing advice to Volkswagen on its €4.5 billion merger with Porsche and to India's Tata Motors on its $2.3 billion acquisition of Jaguar Land Rover from Ford Motor.

Marsh reports to Richard Taylor and Joe McGrath -- co-heads of global investment banking -- and he replaces Matthew Ginsburg, who quit in May. 

Andrew Jones has been running the investment banking operations on a temporary basis while maintaining his responsibilities as co-chief executive of Asia-Pacific.

Barclays is thought to be close to appointing a second co-head imminently, who is expected to be  hired from within Asia. Barclays declined to comment except that the person would have extensive Asia experience.

Marsh joined Barclays in 2010 from Citi, where he was co-head of its global industrials group. He could not be reached for comment.

“Reid Marsh is one of our most senior and respected bankers and his appointment demonstrates Barclays’ continued commitment to Asia-Pacific and its importance to our global investment banking franchise,” a Barclays spokesperson told FinanceAsia.

Other deals Marsh worked on for Barclays in London include advising on the €1.1 billion sale of Avis Europe to Avis Budget Group, advising Italy's Fiat Group on the unwinding of its joint venture with GM and on its demerger into Fiat SpA and Fiat Industrial SpA. He also advised Ford on its $1.8 billion sale of Volvo Cars to Chinese carmaker Geely.

Committed to Asia

Marsh’s move will be at least the third top-level banker relocation to Hong Kong in a month, following Mark Slaughter’s move from New York to Hong Kong at Citi and Martin Haythorne’s move from London to Hong Kong with HSBC.

Slaughter, a former Goldman Sachs veteran, is Citi’s second most senior investment banker and was appointed last month as head of investment and commercial banking for the region. He replaced Farhan Faruqui, who left for ANZ.

Haythorne, meanwhile, left his position of HSBC’s deputy global head of banking and global head of credit and lending in London to be co-head of banking for Asia-Pacific.

There are obvious merits to bringing in such seasoned talent from headquarters.

“This again shows global banks' continued commitment to the region. By bringing over a heavy-hitter from HQ it does more than plug a gap; it spreads confidence throughout the business,” Nick Green, managing director at GreenGroup Executive, an Asian financial services headhunter, told FinanceAsia.

Marsh’s appointment should therefore go some way to boosting morale at Barclays regionally, where it has had a difficult time of late.

Unlike other investment banks such as Nomura and Royal Bank of Scotland, it avoided cutting back on its activities in the region after the financial crisis even as mergers and acquisitions business slowed.

Job cuts, challenges

However, May was a bad month for Barclays, which not only saw the departure of Ginsburg but also the retirement of Robert Morrice, chairman and chief executive for the region, after 17 years at the bank.

Furthermore, Jason Rynbeck, vice-chairman of M&A, left the bank for HSBC in the same month as its regional head of M&A.

Losing such a large slate of experience and expertise was soon compounded by a round of job cuts across the region. Barclays said in June that it would cut 100 jobs across investment banking and markets, representing about 5% of its investment bank in the region.

Those jobs are a small fraction of the headcount to be cut globally as the bank seeks to exit its most capital-intensive businesses. In May, it said it would cut 7,000 jobs from its investment bank globally by 2016, bringing the total number of jobs to be cut across the bank over the next 3 years to about 19,000.

Ginsburg, meanwhile, will be a tough act to follow.

Barclays hired him from Morgan Stanley in 2009 as part of a drive to bulk up in equities and M&A. Among the high-profile M&A mandates he landed was helping Smithfield on its sale to China’s WH Group.

According to Dealogic data, in 2009 Barclays ranked 33rd in terms of M&A advisory for Asia ex-Japan, with a total deal value of $3.6 billion. In 2013, it ranked 8th with a deal value of $26 billion. For 2014 year-to-date, it ranks 26th with a deal value of $5.4 billion.

In equity capital markets, Barclays was ranked 42nd in 2009 by deal value ($683 million) and in 2013 it was 56th ($494 million), according to Dealogic. So far in 2014 it is in 30th place ($728 million).

Marsh's appointment is part of a raft of senior moves announced by the bank late Tuesday. Barclays said that Gary Posternack had been appointed global head of M&A, replacing Paul Parker, who left the bank in May.

Posternack, who will remain in New York, joined Lehman Brothers in 1995 and moved to the UK bank when Barclays bought the US remnants of the failed financial group in 2008. His most recent position at Barclays was head of M&A for the Americas.

The bank also announced that Mark Warham would leave his position as head of M&A for Europe, the Middle East and Africa. He will be replaced by Matthew Ponsonby, who will also continue his role as co-chief operating officer of investment banking.

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