Robert Diamond, who stepped down as head of Barclays Plc last year amid a rate-rigging scandal, is considering backing a firm started by former executives at the bank’s investment unit that was acquired by BlackRock Inc. in 2009, according to a person familiar with the matter.
Diamond, in one of his first moves since resigning after Barclays’s 290 million-pound ($436.2 million) fine for manipulating global interest rates, is in talks to provide capital to Incapture LLC, according to the person, who asked not to be identified because the information isn’t public. The one-year-old firm is planning to start investment strategies including a hedge fund supported by technology it’s developed.
Diamond, 61, would be supporting former colleagues including Peter Knez and Mark D’Andrea. Knez, former chief investment officer of fixed income at Barclays Global Investors and then BlackRock, founded Incapture in 2012. He has recruited at least eight former BGI executives to join him, including D’Andrea, who worked with large institutional clients at BGI and BlackRock before joining hedge-fund firm HighBridge Capital Management LLC in January 2011.
Diamond’s talks with Incapture are continuing and a final agreement hasn’t been reached, the person said. Anthony Silverman, a spokesman for Diamond, declined to comment.
Barclays sold BGI to BlackRock in December 2009 for about $15.2 billion after the bank suffered $18.6 billion of credit losses and writedowns during the global financial crisis. The acquisition of BGI, manager of mostly passive strategies including the iShares exchange-traded funds, more than doubled BlackRock’s assets and made it the biggest money manager in the world. As part of the deal, Barclays took a 19.6 percent stake in BlackRock and Diamond was given a seat on the board of directors. Last year, Barclays sold its holding in BlackRock amid tighter capital requirements and Diamond gave up his seat.
Diamond was chairman of BGI when Knez joined the asset-management unit as head of U.S. bond research before being promoted to chief investment officer for global fixed income in 2004. Knez oversaw more than $500 billion in assets across hedge fund, long-only and index strategies. Knez previously worked at money manager Lincoln Capital Management. D’Andrea, who joined BGI in 2001, managed strategic client relationships that helped develop BGI’s alternatives business.
Among the executives who departed after BlackRock acquired BGI were Knez, BGI’s CEO Blake Grossman and Lee Kranefuss, CEO of iShares. Richard Grinold, former global head of investment research, left, as did Nicolaas Marais, who joined Schroders Plc as head of multi-asset solutions in March 2011.
Knez, who declined to comment on Diamond’s involvement in the firm, said the firm has a technology unit called Incapture Technologies and an asset-management division named Incapture Investments. Incapture’s technology business will focus on providing a cloud-based platform and software for financial institutions.
The investment arm of Incapture will have a multi-asset hedge fund, which will seek to exploit mispriced assets, and a so-called smart-beta fund, focused on identifying asset classes that have the best potential return relative to risk. Incapture is lining up seed capital for the funds and the investment unit will take advantage of the firm’s technology when making investment decisions, Knez said.
“Incapture was created to meet the demand we see from investors to gain exposure to broadly diversified, efficient sources of return,” said Knez, 58, who’s based in San Francisco and New York. “We believe that leveraging enterprise cloud computing technology will provide the foundation for delivering world-class investment solutions.”
Joining Knez at Incapture are former BGI executives Alan Moore as chief information officer, Peter Wilson as head of Incapture Technology solutions, and Brent Canada as chief operating officer. Eddy Vataru, who was head of mortgage-backed securities and U.S. rates at BGI and BlackRock, was hired as senior portfolio manager at Incapture. Manjunath Boraiah, who previously worked on emerging-market rates and credit at BGI, is responsible for building Incapture’s research platform and integrating that with the technology platform. Ryoichi Yamabe, who joined BGI in 2007 and was most recently head of fixed-income strategy and model-based fixed-income investments for BlackRock in Japan, will head Incapture’s business in Tokyo.
One of the funds designed by Knez at BGI is the Fixed Income Global Alpha Fund, which opened in June 2006. It returned 4 percent in 2007, fell 6.4 percent in 2008 and rose 28 percent in 2009, according to an investor update. The fund, now managed by BlackRock, had an annualized return of 11 percent and cumulative return of 94 percent since inception as of the end of 2012, according to the update.
Under Diamond, Barclays employees were accused of trying to rig the London interbank offered rate, or Libor, a global benchmark for lenders, credit providers and an array of financial agreements. Diamond joined the bank in 1996 and rose to CEO after running the investment banking unit for about 13 years. He hasn’t been accused of wrongdoing.