After dividing the carcass of collapsed investment bank Lehman Brothers between them, Barclays Capital and Nomura International are racing each other around the globe to sign up key Lehman employees and clients before they can slip away.
Barclays bought Lehman's 10,000-people US business but declined to bid for the operations elsewhere, saying there was too much overlap. Nomura picked up the 3,000-strong Asian business as well as another 2,500 people in the European and Middle East investment banking and equities divisions.
The companies are now rushing to integrate their purchases, eliminate overlap and tie down top employees with guaranteed compensation packages. They are also busy grabbing bits of Lehman that neither of them bought outright.
Barclays, which was able to get a head start because of the rapid US bankruptcy process, has moved quickly to eliminate all evidence of Lehman's existence. The 98 per cent of the US Lehman employees who have signed on with Barclays have been issued with new business cards and e-mail addresses.
All 44 of Lehman's product lines now operate through Barclays' back office and equity trading volumes are back to 70 per cent of Lehman's pre-collapse volume.
Rich Ricci, chief operating officer of investment banking and investment management at Barclays, said: "It was really important to get these people back to work. We needed to be quick and we needed to be meritocratic. Our integration is going well ahead of what we thought we could do."
The merger will result in about 3,500 redundancies among the 14,000 combined staff. About 1,000 people have already been let go, and the rest will be notified by mid-November.
For its part, Nomura has said that more 90 per cent of Lehman's European employees who have been asked to stay have agreed. Among them are several key members of Lehman's top management, including Rachid Bouzouba, who will head European equities, and Christian Meissner and William Vereker, who will jointly run investment banking in the region.
Nomura is adding more than 2,500 Lehman people to its 1,800-member European team. The analyst teams have already merged but other departments are still in the process of offering and signing contracts.
Nomura declined to comment.
The two banks have also been grabbing employees out of each other's turf.
Barclays initially created some hard feelings when it made known that it intended to go after individual Lehman employees but not the entire European operation. Bob Diamond, Barclays' chief executive, personally called several star Lehman bankers. The UK bank also took a suite in a Canary Wharf hotel to hold discreet meetings with Lehman rank and file.
Since then, however, both sides say the process has been reasonably cordial. Barclays said it had concentrated on those European and Asian Lehman employees who were US-focused and that Nomura was taking US staff who were oriented outside North America.
Barclays has signed up two well-known Lehman London derivatives traders and about 100 former Lehman equities staff in Japan.
On Tuesday, Barclays said it had hired Lehman's entire 20-strong Israel team.
The move immediately establishes the UK as a leading presence in Israel, because the nine former Lehman investment bankers in the office had led the Israeli league tables in mergers and acquisitions.
For its part, Nomura has poached a five-member US-based programme trading team from the former Lehman business, and it has picked up Lehman's German and Swedish presences and 150 fixed income specialists who were not part of the original deal.
"We're very pleased with the retention we have had," said Mr Ricci.
Both banks are vulnerable to outside raiders, however, because their brands have not traditionally had the same kind of cachet with clients and bankers as Lehman did.
Nomura's losses include Makram Azar, who is heading Kohlberg Kravis Roberts' new Middle East office, Alexis de Rosnay, who had recently been named Lehman's co-head of investment banking, has moved to Lazard, and Antonio Villalon, who recently led a team of five financial institutions bankers, moved to Rothschild.
In the US, Mark Shafir, Lehman's co-head of mergers and acquisitions, jumped to Citigroup as the Barclays sale went through.
"You'll get all the B team staying. They're happy to take the package," saidone European ex-Lehman banker.
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