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There is no other investment bank quite like Barclays Capital. But then you’d expect us to say that. Most of our competitors have probably said the same, so how are we really different?. Barclays Capital is the investment banking division of Barclays Group. Barclays Capital. Our focus today.
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There is no other investment bank quite like Barclays Capital But then you’d expect us to say that. Most of our competitors have probably said the same, so how are we really different?
Barclays Capital is the investment banking division of Barclays Group Barclays Capital Our focus today Corporate and Investment Banking Global Retail Banking (GRB) Barclays Corporate Wealth Management UK Retail Banking Western Europe Cards and Consumer Finance
Why BarCap is different Global businesses with resilient models Maintaining strategic momentum in challenging market conditions Focus on talent and culture Emphasis on developing talent
The investment banking landscape has changed Bear Stearns/ WAMU JPMorgan Chase Merrill Lynch/ Countrywide Bank of America HBOS Lloyds TSB Wachovia Wells Fargo Freddie Mac and Fannie Mae Nationalised by US Government Goldman Sachs & Morgan Stanley Bank Holding Companies AIG, RBS, Lloyds/ HBOS, Citi, UBS Significant Gov’t shareholding Industry Consolidation Industry Restructuring Industry Retrenchment Several large universal banks pulled back from international markets
The market dislocation provided Barclays Capital with a unique opportunity to acquire Lehman Brothers Total Market Cap of all global exchanges Lehman Market Cap Market Cap, September 2007 = 100 $ terms Govt permits GS & MS to became bank holding companies Northern Rock nationalised US Govt bails out AIG, Freddie Mac & Fannie Mae JPMorgan buys Bear Stearns Lehman files for bankruptcy US subprime mortgage crisis Jul 07 BoA buys Merrill WaMu fails & sold to JPM Wells Fargo buy Wachovia
The Lehman acquisition accelerated our existing strategy by greatly expanding our US footprint Top tier global ambition requires significant presence in the Americas Americas accounts for highest portion of global IB revenues US represents the largest capital market globally Strong relative performance through market dislocation and universal banking model positioned Barclays to accelerate organic build through acquisition of Lehman Brothers’ North American businesses Barclays Capital well positioned to emerge from market dislocation as one of the new global bulge bracket of investment banks
Barclays Capital’s new mission statement “To be the Premier Global Investment Bank”
An overview of investment and corporate banking Primary Markets Secondary Markets Clients issue& borrow capital Investment Banking Clients invest& hedge risks Financing & Risk Solutions Sales Trading IBD / Corp Fin ECM Equities Distribution • Financing • Equities • Bonds • Loans • Risk Mgmt • Treasury • M&A • Event driven • Advisory • Banks • - Commercial • -Investment • -Central • Real Money • Pension • -Mutual • Insurance • Asset managers • Leveraged • -Hedge funds M&A DCM Credit BARX Global Loans Interest Rates Research Lev Fin Foreign Exchange Risk Solutions Commodities Research - Sector - Region Emerging Mkts Prime Services Private Equity Private Equity
How we are set up to meet Italian clients’ needs BarCap Italian franchise is organized in three major groups • Organised in a matrix structure to focus on productand industry expertise, the Distribution Team totals 31 sales people (split between London and Milan) • Clientscovered are • Banks and Bank Foundations, • Insurance Companies, • Asset Managers, Pension Funds and other real money accounts, • Private Banks • Growth of Equities franchise expected to outperform market with addition of Lehmans’ cash equties and research; • Overall, a leading foreign player in the market– top 3 together with Deutsche Bank and JPM Distribution • Organised in Client Coverage (3 people) of Financial Institutions clients such as Banks, Insurance Companies, Banking Foundations and State-controlled financial institutions • Mission – Senior client coverage: identify strategic client needs and position solution-driven products in conjunction with product specialists mainly from the Distribution team IBD FIG • Organised in Client Coverage (14 people mainly based in Milan) and Products Coverage (17 people split between Milan and London). Recent hiring of ex-Lehman resources with M&A, Real Estate and Capital Markets expertise • Current client base is composed of c. 100 entities. Classified as Corporates (60%) and Public Sector related entities (40%) according to their ownership structure, as Diamond (5%), Platinum (5%) and Gold (90%) according to their overall wallet size across all the products • Currently in top 5 position. IBD Corporate and Public Sector 1
BarCap positioning in Italy Barclays Capital vs. Premier Italian Competitors1 2008 Estimate of ranking by revenue Ranking Product Top 3 • Public Sector Finance • IRD Vanilla & Exotic / FX • Commodities • Equity Derivs Strategic • Primary Bonds / Secondary Credit Cash • Flow Credit Derivatives • Fund-linked Derivatives • Futures and Options 5-10 • Equity Derivatives Flow • EM (inc FX and Corp Bonds, excl Equities) • Credit Derivatives Structured • Global Loans Not in Top 10 (Yet!!) • DCM / Converts / Rights • M&A • Real Estate 3
Italian Distribution: Organisational Chart • The Italian Distribution Team is organised in a matrix structure to focus on product and industry expertise • The Italian Team totals more than 30 sales people of which around 50% in Solutions Sales (Structured Products) and 50% in so called “flow” business. • In terms of Global Distribution organisational structure we differentiate from our competitors through integrated Fixed Income & Equity Division. This structure allows us to be more effective in approaching clients and work with a solution approach Country/RegionalHead Structured Products/Solutions Sales Global Product Heads Equity Deriv Private Banking Commodities Equity Cash Rates Credit FX Banks Insurances AMs / Pensions Multiasset / Client-Industry Driven Single Asset / Product Specific 5
Client sectors – trends and strategies Trends BarCap approach • Educate on full BarCap product range: • Highlighting integrated approach • Leading with inflation and equity linked • Leverage Commodities leadership to support shift to alternatives • Build out flow capabilities in targeted fashion (e.g., enhancing FX coverage) • Capitalise on Private Banking growth potential by meeting demand for Total Return Product and Strategic Business • At same time, consider providing access to Certificates to cater to investors outside traditional private banking channels • Respond to need, by focusing on: • Alternative products / strategies • Structured credit solutions for life portfolios • Behaving differently depending on the client - but generally continue to invest across asset classes • Collapse of AUM in traditional/bench-mark strategies • Active in widening range of alternative & flow products – e.g., equity derivatives (TRS & iShares) • Several bank mergers as well as mergers between banks & asset managers = fewer players / trades but bigger deals • Significant growth potential in Private Banking: only 65% of €820b HNWI AUM managed in private banks to date • All under pressure & in need for yield on life portfolios as well as new premiums • Business volume increasingly balance sheet dependent Pension Funds Asset Managers Banks / Private Banks Insurance 7
What do Equity sales do? INVESTORS FUNDS $ FUNDS $ BANKS PROMOTERS $ $ SGR “XYZ” $ FUND MANAGER Info, seminars, meetings with companies & analysts, training, access to Stock Exchanges $ ANALYSTS SALES COMPANIES Orders Execution TRADERS NYSE/NASDAQ/BORSA
More on investment styles The fund manager’s investment approach influences both the stock selection and the variables he/she chooses to focus on. • Top down vs bottom up • Value vs Growth • Momentum vs contrarian
Taking the investment decision Once a portfolio manager has collected as many as possible information on the macro, sector and micro levels he/she can formulate his/her growth hypothesis and build his/her own model, run a DCF, find a target price and arrive to the…. BEST POSSIBLE investment decision!!!! There are infect many variables he/she cannot consider which could influence the performance of the selected stock: Sector rotation, shocks, macro changes, unexpected news, market expectations....
Where do Equity sales get the supporting info? • Internal research • Ufficial Government web sites • Company websites • Trade shows • Books • Company visits • Newspapers • Relationships
Ongoing training and development Initial Training Programme Continuous Professional Education Mentoring Professional qualifications On the desk
Internships at Barclays Capital Your perspective: Getting to know the firm and deciding if it is right for you Our perspective: Ultimately we feel this is the best way to hire a graduate and therefore want to get to know you as well as possible Internship experience: Training Meet the Managing Director and Director initiative Buddy programme Desk experience and appraisals A "real life" internship experience as close as possible to that of a newly-hired graduate
Hiring levels Analysts Hold a Bachelor or Masters degree or equivalent with work experience limited to internships Associates Significant previous work experience plus studying for a Business School MBA Typically hired into areas such as: Investment Banking, Research, Sales, Strategy & Planning, Structuring, Trading Quantitative Associates Hold a PhD or similar in a highly quantitative subject, and hired into highly quantitative roles Typically hired into areas such as: Quantitative Analytics, Trading, Structuring & Research
Hiring areas for analysts Investment Banking Prime Services Research Sales Structuring Trading Infrastructure Compliance, Corporate Communications, Finance, Global Financial Risk Management, Global Marketing, Human Resources, Legal, Operations, Technology
Next steps Application and selection process All applications must be made online Online numerical and verbal reasoning tests First round interviews Final round assessment events Application deadlines Full time positions: 15 November 2009 Internships: 31 December 2009 Spring Session: 31 January 2010 • www.barcap.com/expectexcellence
"This publication has been prepared by Barclays Capital, the investment banking division of Barclays Bank PLC, for information purposes only. This publication is confidential, and no part of it may be reproduced, distributed or transmitted without the prior written permission of Barclays Capital. Barclays Capital, its officers, directors, partners and employees do not accept any liability whatsoever for any losses whatsoever (whether direct, indirect or consequential) arising from reliance on the information contained in this publication. This publication is the property of Barclays Capital only and Barclays Capital does not waive any intellectual property rights in the contents of this publication. Barclays Capital is the investment banking division of Barclays Bank PLC, which is authorised and regulated by the UK Financial Services Authority and a member of the London Stock Exchange. Barclays Bank PLC is registered in England (No. 1026167) with its registered office at 1 Churchill Place, London E14 5HP."