Citigroup has named Douglas Adams and James Fleming its new global co-heads of equity capital markets (ECM), the unit that helps companies raise money on public stock exchanges, according to a memo seen by the Financial Times.
Their appointments come at a difficult time for the business. Refinitiv data show ECM fees have fallen 16 per cent industry-wide this year, and WeWork’s failed IPO and sharp post-listing declines from others like Peloton are expected to deter other companies from testing the market in the coming months.
Citigroup is one of the top-five equity-underwriting banks worldwide, according to industry monitor Coalition. However, investment banking revenues in general are under pressure and plunged to a 13-year low in the first half of 2019 as the US-China trade war, slowing growth and negative European interest rates exacerbated a structural decline in earnings that set in after the financial crisis.
Mr Adams, a Citi veteran, has been promoted from co-head of North America ECM. Mr Fleming, who joined Citi from Bank of America Merrill Lynch only last year, was elevated from the equivalent top role for Europe, the Middle East and Africa, Manolo Falco and Tyler Dickson — co-heads of investment banking — said in an email on Friday.
Suneel Hargunani takes over from Mr Fleming in the European region alongside incumbent Valery Barrier, according to a separate memo seen by the FT.
The moves are part of a series of leadership changes at Citi since veteran investment bank boss Jamie Forese retired in April and was replaced by former global markets leader Paco Ybarra, who divides his time between his former home in London and Citi’s New York headquarters.
Mr Falco has publicly pledged Citi will be more “aggressive” in hiring and dealmaking in New York and London as it attempts to break into the top-three banks by revenue worldwide.
The lender as a whole is under pressure after failing to match the increase in value achieved by JPMorgan and Bank of America in the past seven years. An activist investor, ValueAct, has built up a $2bn stake and is lobbying for greater strategic focus at the sprawling global banking group.
Citi has generated $709m in fees from M&A advice, capital markets underwriting and lending in the first three quarters of the year, according to data from Dealogic.
The news comes days before Citi — and other big US banks — report their third-quarter earnings. Equity capital markets is expected to be a dark spot in another downbeat set of investment banking results.
Recently the US lender named David Livingstone its new head of Europe, the Middle East and Africa, a role that will see him guide the bank through the vagaries of Brexit.