Diamond Would Be Catch for Investment, Private Equity
If Robert Diamond can’t recover in banking after resigning as Barclays Plc (BARC)’s chief executive officer amid the firm’s record regulatory fines, he would still be a sought-after prospect in another field: investment funds.
Diamond, 60, could easily start a new career at a private- equity firm or hedge fund, according to executive recruiters in the U.S. and the U.K. It’s a path worn by ousted heads of financial firms including former Fannie Mae CEO Daniel Mudd. Diamond’s chance of getting another job leading a big, publicly traded bank is slim, the recruiters said.
“Private equity will snap him up because they’re not regulated by the same rules as banks, and Diamond’s got the money and experience to help them buy and run financial institutions,” said Pat Cook, who heads search firm Cook & Co. in Bronxville, New York. “I don’t think a public company will touch him with a 10-foot pole,” she said.
Diamond stepped down from Britain’s second-biggest bank yesterday amid mounting political furor over its 290 million- pound ($455 million) settlement of U.K. and U.S. probes into attempting rigging of the London and euro interbank offered rates. He joins at least two dozen top executives at the world’s largest financial firms who’ve vacated corner offices following losses or accusations of mismanagement since 2007.
Mudd, 53, who was dismissed from Fannie Mae when the government seized control of the mortgage-finance firm, went on to lead New York-based private-equity and hedge-fund manager Fortress Investment Group LLC. He left that post in January amid a government lawsuit stemming from his Fannie Mae tenure.
Former Wachovia Corp. CEO G. Kennedy Thompson, 61, was ousted in June 2008 before the lender reported an $8.9 billion loss tied to declining asset values. He later joined Aquiline Capital Partners, a New York-based private-equity firm.
Diamond, who wasn’t named as a defendant in the regulatory probes, was questioned by British lawmakers on the Treasury Select Committee today. He resigned after the government announced a parliamentary inquiry into the U.K. banking industry.
Mark Lane, a Barclays spokesman in New York, declined to comment.
While Diamond’s prospects in banking are likely to be limited by the regulatory incident, that wouldn’t prevent other types of financial firms from trying to tap his connections and credentials, recruiters said.
“His skills and experience would be highly prized in private equity or other non-public enterprises, if he wants to resurrect himself,” said Joel Koblentz, founding partner of The Koblentz Group in Atlanta, which conducts searches for CEOs and corporate directors.
Known as an aggressive dealmaker -- Diamond negotiated a $1.75 billion acquisition of Lehman Brothers Holdings Inc.’s North American operations five years ago -- the banker shouldn’t wait on the sidelines during the Libor scrutiny if he wants to join another firm, the recruiters said.
“You risk losing your competitive advantage,” said Koblentz. “Diamond is an executive who’s used to winning and being at the top of the pyramid. Now he has to position himself to be back in the game.”
Diamond, who held roles at Credit Suisse First Boston in Tokyo and New York and Morgan Stanley before joining Barclays, ran the London-based bank’s securities unit when the Libor manipulation occurred. He became president of the bank in 2005 and by 2007 his Barclays Capital unit accounted for almost one- third of pretax profit. He became CEO at the start of last year.
He’s most likely to find another career opportunity in the U.S., where he was born and where “his skill set will be more appreciated,” said Jason Kennedy, CEO of Kennedy Group, a recruitment firm. “Somebody will pick him up.”