Despite being staffed by some of the best in their business, it seems Lehman’s European fixed income units may be shunned by the bank’s buyers.
At the moment, it looks like Nomura will soon be the new owner of Lehman’s European investment banking and equities units. Failing this, Barclays Capital is also said to be waiting in the wings, with a view to bolting on Lehman’s equities arm.
Lehman employs/employed around 5,000 people in London. According to the Financial Times, a maximum of 2,300 are likely to be included in any sale. Most of those left out come from the bank’s large fixed income business, including credit, rates, FX and prop trading.
“Lehman had some of the best people in the market,” says one former Lehman recruiter. “But this is a funny time – I’ve seen some very good credit people who’ve been out on the street for the last six months, so there’s no certainty they’ll get rehired.”
A fixed income headhunter says Lehman’s best salespeople and traders expect to be cherry picked by Barclays Capital. Shaun Springer, chief exec of search firm Napier Scott, says there’s still demand for fixed income professionals with experience of the Middle East and Russia, but that “unfortunately, the same can’t be said for the European market.”
Lehman’s middle and back office staff are also likely to suffer following any deal.
Mike Hartwell, managing director of search firm Hartwell Buck, says the new owner will only need to add operational staff if its trading volume increases significantly following the purchase, but even this is no guarantee that jobs will be saved: “It’s more about systems scalability than headcount scalability – if you go from settling three million to 10 million trades, you won’t need to increase your headcount proportionately.”
Lehman’s client services and prime brokerage-focused support staff should find themselves rehoused elsewhere, says Hartwell. Securities settlements specialists might be better off migrating to Singapore or Mumbai.