There is no other investment bank quite like Barclays Capital

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  • Business – Introductions
  • BUSINESS: As you sit in this room you will have many expectations of what you want from your career and what you think of banking and Barclays Capital. The banking industry has been through so much change over the course of the year, banks who were previously major players are no longer in existence and other firms have been through mergers, acquisitions and restructures. As I stand here in front of you I want to explain why we still believe it is a great industry to start your career and equally why we believe that we are different to other investment banks and although you may have heard it all before we hope that by the end of the presentation you will understand why we believe it is an excellent choice for you to start your career here.
  • Barclays is one of the world’s leading universal banks Has a proud history in banking for over 300 years, starting as a private banking business in the late 17th century Has grown tremendously since and now operates in over 50 countries and employs close to 150,000 people Barclays has two main operating units: Global Retail and Commercial Banking which consists of UK Banking, Barclaycard and international retail and commercial banking Investment Banking and Investment Management which includes investment banking, wealth and asset management The focus of today’s presentation is our investment banking operation, Barclays Capital
  • The diversity of Barclays businesses is a strength in challenging times – the universal banking model allows us to best serve our clients The stated goals of management going into the crisis were: To stay profitable – and we were profitable every reporting period Maintain strategic momentum – it would have been easy to take a defensive approach – we did not – going to speak in more detail on how we maintained momentum by staying committed to our client focused model and executing on the Lehman North America opportunity Talent and culture are our core differentiators There is no substitute for having the best people But you also need a culture which enables people to operate at their peak So what are the defining attributes of BarCap’s culture? Meritocracy: pay for performance culture Client centric in all that we do Risk management throughout the organisation Developing talent is critically important to Barclays ambitions Attracting and retaining the brightest and best is a commitment of Barclays senior management Deep bench of talented juniors to be developed into future leaders for the firm through (1) Structured training programs (2) Professional development and (3) Mentoring The graduate programme is an ideal start: opportunities for immediate responsibility, swift recognition, strong career progression Many opportunities in a growing firm
  • Now to talk a bit about what we’ve witnessed in the financial sector over the past 2 years – and how this has impacted Barclays Market turmoil led to Opportunities never imagined available First Bear Stearns acquired by JP Morgan, driven by regulators Merrill Lynch, another Wall Street icon with global brand and wide retail network, became available and acquired by Bank of America Collapse of broker-dealer model of Lehman Brothers and its 158 years of history Yet, less than 2 years before, these entities were titans in the global financial markets. Amazing given that at end of 2006, market caps were: Bear Stearns: US$25bn Lehman Brothers: US$40bn Merrill Lynch: US$80bn Only a few players able to take advantage of consolidation opportunities – BarCap was one of these
  • This slide illustrates how quickly the consolidation played out Dislocation accelerated a necessary consolidation in the sector And this fundamentally changed the industry competitive landscape Key to capitalising on this was being prepared to move when opportunities arose Barclays was well positioned to acquire Lehman We were very interested in a combination with Lehman even before the bankruptcy – there was a clear strategic fit with our business Following the bankruptcy there was a tremendous opportunity for us to acquire a great US franchise
  • So let’s take a quick look at what the Lehman opportunity really meant for BarCap Our mission statement at the time was: To be the Premier Global Investment Bank in Risk Management and Financing Lehman acquisition was a “generational opportunity” and massively accelerated our progress towards that goal by giving us a top tier US franchise Two of the crown jewels of Lehman were the M&A and cash equity platforms we had been lacking We had looked at entering M&A and cash equities before but always deemed it too costly to build organically in the US - the Lehman transaction gave us a strong position in these markets overnight Similarly, Lehman trading businesses were complementary to ours Could never have dreamt an opportunity like this to accelerate our existing strategy would arise We are now well positioned to emerge from this financial markets crisis as one of the few true Global Bulge Bracket Banks with top businesses across virtually all products
  • In summary, let’s step back to see how we got to this point – because it is a good story which illustrates what a dynamic place BarCap is Original 1997 mission statement: To be the Premier European Investment Bank in Risk Management and Financing At the time BarCap was finding its feet and this was a bold statement But many viewed this as a misguided focus given that this was the height of the dot com and equities boom As it turned out our focus on fixed income and risk management gave us a strong platform for growth going into the new millennium 2003 Alpha Plan Though our progress had been impressive we still had a long way to go to catch our top European peers Revised goal: Double size of our business and achieve top tier in Europe Delivered targets one year early (2006) Late 2006 Redefined Mission: To be the Premier Global Investment Bank in Risk Management and Financing Ambitious goal – focus was extending our product strengths to a global client base (including the US) Acquisition of Lehman NA allowed us to redefine this mission again because we are now positioned to compete in the top tier in all major products globally
  • GRADUATE: Introduction – who you are, where you came from, what you have done? Mention: Can read about some of my graduate colleagues in the brochure and on the website but I am now going to talk through my own experiences... From your perspective: How is Barclays Capital different from other investment banks? Is it different from what you imagined? What different challenges have you faced? How does the firm manage different aspirations?
  • There is no other investment bank quite like Barclays Capital

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

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