Barclays’ Structured Capital Markets business is no more. Yesterday, chief executive Antony Jenkins said the bank will be closing the Structured Capital Markets (SCM) business, which specialises in tax arbitrage and tax mitigation and has been a significant generator of revenues for the bank. In doing so, Jenkins hammered the final nail into a coffin which has been under construction ever since last September, when Barclays first announced plans to close SCM.
The demise of the structured capital markets business won’t be immediate. Barclays said it will take ten years to wind the business down completely. In the meantime, some senior staff like Nick Brand – a managing director in Barclays’ SCM business who joined from Lehman in 2006 – are still in place. However, the big names who made the biggest money from tax structuring left Barclays a while ago.
The best known is Roger Jenkins, the former head of the tax structuring group. Jenkins is said to have earned £40m a year in the role of Barclays, making him better paid than Bob Diamond – then head of the investment bank. Jenkins left Barclays in 2009, coincidentally or not after the Guardian wrote a series of articles about him and the structured capital markets group. Jenkins initially set up Elkstone Capital, a Dublin-based private equity fund to capitalise on investment opportunities in Ireland. And then in October 2011, he joined Brazilian Bank BTG Pactual as a partner, where he’s been ever since. Jenkins, reputedly worth £300m, was at one point said to be dating Elle Macpherson although that relationship is now reputedly over.
Jenkins is the name most frequently associated with Barclays’ structured capital markets business. However, people close to SCM in its heyday from the mid-90s to 2009, say it was more of a triumvirate. “Roger ran the business, but the real brains behind it were from Iain Abrahams,” said one source. “And then Jonathan Zenios helped run the business and took over when Roger left.”
Abrahams, a former partner at Ernst & Young and then Slaughter & May, resigned from Barclays in October 2012 and has yet to resurface. According to the FSA Register, he is still employed by Barclays even now.
Zenios left Barclays in December 2011 and now runs Z Investment Partners, a hedge fund based in North London. Working with Zenios is Gerald Brawn, former COO of structured capital markets at Barclays. Brawn is now COO and CFO at Z Investment Partners.
Other senior ex-structured capital markets professionals resurfaced at Walbrook Capital Investments, a hedge fund set up by ex-Barclays bankers. Walbrook is run by Michael Keeley, at one time said to be Jenkins’ right hand man in SCM. Keeley left initially left Barclays to run Protium the Cayman Islands company which Barclays used to absorb $12.3bn of toxic assets from its balance sheet. Barclays dissolved Protium and brought these assets back onto its balance sheet in 2011.
While the most senior SCM staff have already left Barclays, various other more junior people remain in place alongside Brand. According to profiles on LinkedIn, they include Simon Phipps, an analyst in SCM who joined the bank from Ernst & Young in 2010, or Abhinav Uttam, a vice president in ECM who joined from Lehman’s strategic transaction group in 2007.
For Antony Jenkins, who’s seeking to change the culture at Barclays, the historical culture in the SCM business is like to be a particular anathema. In an article in 2009, the Guardian said the unit was known as an aggressive place to work, where poker tables would be set up at night and cigars and champagne handed out. One secretary was reportedly fired for booking a SCM executive a Volvo rather than an S Class Mercedes.