Citigroup Prime Brokerage: Three Heads Become One
Bloomberg and other news organizations are reporting on Thursday, March 27th 2008 that Citigroup replaced Ali Hackett and Tom Tesauro, co-heads of global equity finance and prime brokerage, extending a management reshuffle following Vikram Pandit's appointment as chief executive officer. In their place, Citigroup has promoted Nick Roe, the head of the European part of the prime brokerage unit to report to Steve Bowman, the bank's head of hedge fund services.
Citigroup is a relatively late comer in the offering of prime brokerage services to hedge funds. Ms. Hackett and Mr. Tesauro apparently started the unit in 2005 and hired Mr. Roe about that time from Deutsche Bank where he was global head of prime brokerage for that bank. Hence, for at least two years, Citigroup's investment bank division had effectively three heads for this business.
Toomre Capital Markets LLC ("TCM") has to wonder how many other redundancies Citigroup has within its investment bank and just how much cost will be squeezed out by reducing three heads to a single head. There are some 2,000 investment banking employees scheduled to be let go from Citigroup in the next few weeks. Perhaps at long last some of the reduction will occur at the more well-compensated end of the Wall Street pyramid?