Deutsche Bank's U.S. investment banking business didn't have a great start to 2019. - Sixteen managing directors have left since January, including two of the bank's biggest hitters. Deutsche has, however, been rehiring.
The German bank adopted a new strategy for its corporate and investment bank in July, when it closed its global equities sales and trading operation as CEO Christian Sewing cut costs and took DB back to its roots as a German and European focused bank with a U.S. operation that serves European clients.
Deutsche's corporate finance business was less affected by the changes, but the division has nonetheless lost more staff than large U.S rivals.
The two biggest hitters to quit were Mark Hantho and John Eydenberg. Hantho, who was chairman of global investment banking and capital markets coverage, and Eydenberg both jumped ship to Citi, where they assumed the role of vice-chairmen in July. Both are big misses for Deutsche. Hantho is a much-respected capital markets banker while Eydenberg, who was co- global head of financial sponsors, previoulsy looked after the bank’s relationships with Softbank’s $100bn Vision fund which in less than three years has become the world’s biggest investor in technology companies. That relationship is now managed by Sandeep Kamat, who was hired 18 months ago.
Other departures include Tommaso Zanobini , who resigned as head of the bank’s fintech practice and has decamped to Moelis with a five-strong team.
While the bank has suffered departures, some have seen the restructuring as an opportunity to dig and fill the gaps left by those who have departed. They include Celeste Guth, the bank’s highly-respected co-global head of financial institutions who has now been promoted to global head of M&A, a slot that was vacant since the departure of her predecessor, Paris-based Thomas Piquemal last year. With Guth moving roles, her global FIG responsibilities have passed to Stephen Valentino, who co-heads the business with London-based veteran Hubert Vannier.
Meanwhile Drew Goldman has moved up from head of investment banking coverage (IBC) for the Americas to take the role on a global basis.
At the same time, Deutsche has brought in fresh blood, with a dozen managing directors joining since the start of the year.
“We continue to invest in the business where it makes economic and strategic sense, and we’ve in fact gained market share year-over-year in both the Americas and EMEA,” the bank said in a statement. Deutsche moved up one place to ninth in the U.S. investment banking revenues during the first half of the year, according to Dealogic.
The two biggest drivers of the bank’s performance in US corporate finance are financial sponsors and leveraged finance areas where it is re-doubling its efforts. Following the restructuring, the bank promoted New York-based Mark Fedorcik, a leveraged finance banker to run its investment banking business globally and he is on the hunt for talent.
The bank has beefed up its core strength in financial sponsors with the addition of Nick Agarwal, who joined from Wells Fargo and Robert Innocentin who arrived in May from Bank of America Merrill Lynch. The arrivals of Agarwal and Innocentin will go some way to soften the blow of Eydenberg’s departure. The bank’s financial sponsors group, which contributes about one third of the bank’s US corporate finance revenues, is led in the US by Kent Penwell and Noel Volpe, and globally by Michael Walsh and Adam Bagshaw. The bank has also bolstered its leveraged finance with the appointment of Tracy Mehr from Jefferies.
Deutsche has scooped up talent from firms that are largely outside the top tier of investment banking. It has, for example, added to its broader technology media and telecoms practice, with Matthew Upton from Mizuho and Greg Thorne from Stifel while at the end of May it hired Gil Ahrens as its US-based head of venture capital and emerging growth company coverage from Wells Fargo.
The bulk of these hires were made before Sewing launched his restructuring, but three have subsequently come on board. The first of these is Ian Woods who is joining after a four-year stint at Jefferies, where he was part of the industrials team and he will take a similar role at Deutsche when he arrives during the fourth quarter.
Another recent joiner is Karen Flaherty is the other. Flaherty is to join at the end of the year after resigning from BNP Paribas as head of North America healthcare after just a year with the French bank. Finally, DB's U.S. business hired Sharad Ramesh, formerly a managing director with Evercore to its M&A team.
Deutsche is known to offer competitive packages but the question is whether people will want to join a platform that is in the throes of a restructuring. While Deutsche’s days as a global sales and trading powerhouse are over, it is determined to maintain its presence in corporate finance and Sewing sees its U.S. business as vital to its success.
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