UK
Independently of whether Nomura is, or isn’t paying two-year guarantees to the senior Lehman bankers who join it, the real question may be whether it’s such a good idea for Lehman bankers to join Nomura in the first place.
Although Nomura says it’s closing the deal to buy Lehman’s European equities and investment banking businesses on 13 October and that most senior Lehman bankers have agreed to move across, there are still questions about how the business will operate in the absence of the equity trading systems which ran out of the US and are now owned by BarCap.
Senior Lehman bankers such as co-CEO Riccardo Banchetti, co-head of investment banking Alexis de Rosnay, and head of UK investment banking Michael Tory, are not joining Nomura. In Asia, senior Lehman people are joining Merrill and UBS instead.
Nomura’s push into equities is nothing new. The Japanese bank has been trying to build its European equities business since 2004, but hasn’t worked on a single European IPO this year according to Dealogic. Headhunters also say that some of those who’ve joined Nomura in the past have been frustrated by the weakness of the Japanese bank’s platform – of 15 equity derivatives specialists hired in 2004, only half remain.
If Nomura gets it right, however, it could push into ECM in particular at a time when many of the leading players in Europe are compromised by a lack of capital. The real question is whether Lehman’s sales and trading operations can operate successfully elsewhere – and whether Lehman bankers with a choice in the matter should stick around to find out.
Should they stay? Should they go? Let us/them know.
Equipped with all the expertise that’s come out of Lehman, Nomura has the makings of becoming a truly major player in European investment banking. Good luck to them, I say.
Go Nomura! Gambatte!!!*
*good luck/do your best!
Although bits of the Equity Trading systems were internally developed, a large part of the Equity Trading system at Lehman’s was Fidessa, which is a bought in system.
They’re probably missing a few things for Prime Brokerage, and the core reference data system, but the reference data can probably switch over to Nomura’s own one anyway, leaving “just” the prime brokerage and swaps system missing. (and Nomura has a swaps system too.)
reputation of Jap banks outside their homeland is signified by ex-Lehman heads decided to sign up with firms elsewhere, notwithstanding the 1 or 2-yr guaranteed package.
In the short term, this is a fortuante lifeline for stranded Lehman bankers. In medium term, it will end in tears for both Nomura and former Lehman staff, as the two cultures are completely incompatible and the Geijin ceiling will eventually drive out most talent.