In theory, M&A bankers should be comparatively safe from Brexit. When Boston Consulting Group concocted a chart of London jobs that were and were not immune to its effects in 2016, M&A jobs were in the super safe zone. The implication was that most M&A jobs would stay in London. Why, then, has Bank of America Merrill Lynch just shifted Luigi Rizzo, its EMEA head of investment banking, to Paris?
The simple answer is that Rizzo will deal with BAML's European Union-based clients after Brexit. Henceforth, he will be known as 'head of EU Corporate and Investment Banking' and will be part of BAML's Europe leadership team under Bruce Thompson, who's leading the bank's post-Brexit European business out of Dublin. Just as Goldman Sachs has been moving some senior Europe-facing investment bankers to Milan, Madrid, Frankfurt and Paris in preparation for Brexit, so BAML is simply doing the same.
Even so, eyebrows are being raised. 2018 has been a bad year for Bank of America's investment banking business. M&A revenues at the bank fell 33% year-on-year in the first nine months. Along with Christian Meissner's ejection as head of the corporate and investment bank in September, the decline has fostered a sense of instability - not least among the cohort of former Goldman Sachs bankers who flooded to Bank of America Merrill Lynch after the financial crisis and whose authority is now being challenged.
Rizzo is part of the cohort, having joined BAML from Goldman Sachs in 2013. The deposed Meissner was ex-Goldman too. So is Diego De Giorgi, BAML's London-based co-head of investment banking, whom Bloomberg recently claimed (seemingly incorrectly) has been rarely seen at BAML for 18 months. Rightly or wrongly, the FT attributed Meissner's exit to he and De Giorgi's "tribal management style," in which ex-Goldman bankers were favoured over Bank of America Merrill Lynch loyalists.
Although De Giorgi remains in London, the disappearance of Meissner into the sunset and of Rizzo to Paris is therefore perceived in some quarters as a weakening of the influence of the ex-Goldman bankers at BAML London in a year when their performance has left much to be desired. Meanwhile, Paris is emerging as a potentially new sphere of influence for ex-Goldmanites. It's not just Rizzo, the Paris markets business will be run by Sanaz Zaimi, whom BofA hired from Goldman in 2009.
Bank of America declined to comment for this article. Rizzo is unlikely to the only BofA banker moving to France. BofA's fancy new Paris office, which is due to open in early 2019, is expected to accommodate around 400 people in total, of whom 200 are likely to be in the front office (across investment banking and sales and trading). Recent big-name French-speaking hires at BofA in London like Severin Brizay and Laurent Dhome may get the nudge too. The bank already hired Jerome Renard from Credit Suisse as head of EU equity capital markets, based out of Paris, starting from November.
The good news for any BAML bankers moving to Paris is that the existing French team already has momentum. While the rest of Bank of America's M&A business has floundered this year, France has thrived: BofA went from 21st to 10th in the French league tables in the first nine months of 2018.
The bad news is that the real power base for BAML's European investment banking division (IBD) will stay in London. - Rizzo will report to De Giorgi and to Jim O'Neill, the BAML lifer who heads EMEA corporate and investment banking. De Giorgi and O'Neill will both remain in the City. BofA's prospective Paris moves are already said to be causing political infighting in the global markets division. They have the potential to do the same in IBD, particularly as long-serving Bank of America and Merrill Lynch staff try reasserting their authority against the ex-Goldman incomers. 2019 could be an interesting year.
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