Barclays has raided ABN Amro for a team of investment bankers to break into merger and acquisition advice just six months after losing out to Royal Bank of Scotland in a bitter battle to buy the Dutch bank.
Barclays Capital yesterday announced it had hired five senior bankers from ABN, with a team of about 40 expected to arrive by late summer. Leading the group is Jitesh Gadhia, who has been appointed BarCap's global head of advisory, based in London.
Mr Gadhia has a network of clients in Asia and is known to be close to Ratan Tata, the chairman of the acquisitive Indian conglomerate Tata Group. This relationship helped ABN to land a role advising on the takeover of Corus last year.
Barclays' new M&A team is set to focus on emerging markets in Asia, eastern Europe, Russia and the Middle East and will report to John Winter, head of the group's European investment banking and debt capital markets.
Barclays Capital, run by powerful group president Bob Diamond, is best known as a debt-focused investment bank but has expanded into equity derivatives, currencies and commodities.
The business was born from the embers of BZW, Barclays' ill-fated expansion into investment banking in the 1980s, which ended with the M&A and equities teams joining Credit Suisse in 1997.
Mr Diamond has been keen on getting back into the M&A business for some years and wanted to buy Cazenove, before the blue-blooded broker formed a joint venture with JPMorgan in 2004.
Mr Winter said BarCap clients had been increasingly questioning why it did not provide M&A advice and that companies in emerging markets often wanted that service.
"Clients are saying, 'Why aren't you doing this already? You are advising us on capital structure, debt capacity and risk management topics yet the actual M&A advisory role is something you don't normally seem prepared to undertake," he said.
Analysts said Barclays' raid on ABN would be bad news for RBS if it triggered a string of top-level departures. RBS beat Barclays to ABN but is under fire for buying the bank in a hostile deal just before the financial markets went into meltdown last year.
"Doing a hostile takeover of an investment bank is fraught with danger," an analyst said. "RBS may not be too gutted about it because it means fewer pay cheques they have to lay out for, but there is a danger of revenue attrition."
An RBS spokeswoman said: "We know from past experience that as we integrate businesses some people will choose to move on in addition to any planned job reductions." She said corporate advisory was a core business of more than 600 people, of which M&A bankers made up the biggest part, and the moves would not affect RBS's ability to advise clients.
Mr Winter said: "I think this is an efficient way to grow our businesses. We are not paying goodwill or a takeover premium for buying a company. It is difficult to do this repeatedly, but there have been a handful of these situations where we take a team in a way that makes sense for us. The reason for leaving for most of them is that they view it as a better career opportunity."
The other arrivals announced yesterday were: Marc Holtzman, who will be vice-chairman in investment banking, based in London; Simon Hargreaves who will head the advisory business Europe, Middle East and Africa in London; Jason Rynbeck, who will run the Asia Pacific advisory business from Hong Kong; and Frank Hancock, who will head the Indian business from Mumbai.