Barclays Expands with New Acquisition

Some deals can really send a chill down your spine—especially when they seem to bring more complications than benefits. Imagine a major global bank snapping up a fintech platform, or maybe a European company making its mark in the U.S. market just to gain traction in consumer finance during shaky economic times. And then, you’ve got an investment bank eyeing an origination platform to bolster its securitization strategy. Well, Barclays is about to combine all those elements.

Now, maybe this isn’t as risky as it seems. Barclays has already established itself in the credit card arena in the U.S. Though Barclaycard US isn’t on the same level as giants like Citi or JPMorgan, it’s still one of the top ten players and earns respect in the field—just look at their partnerships with JetBlue and Wyndham. Interestingly, it will not be acquiring a U.S. fintech firm called Best Egg, which specializes in unsecured loans and was recently purchased for $800 million. The founders of Best Egg actually came from Barclaycard US, just to throw a little history into the mix.

This acquisition for Best Egg feels a bit like a return for those founders—Paul Ricci, for one, and other senior team members now have a major stake in that $800 million deal. For them, coming back to Barclays under these circumstances might be the best move they could have made. There is a level of familiarity in merging Best Egg with Barclays’ existing U.S. consumer credit operations, which should ease the transition.

From an investment banking viewpoint, this is looking quite promising for Barclays. They plan to keep part of the loans from Best Egg on their books, which is advantageous. The majority will, however, be bundled into asset-backed securities for investors. This strategy should help secure a better position for Barclays in the ABS rankings and allow their fixed income bankers to reach some elusive clients. Who knows? This might even hint at more job stability in that sector.

The founders of Best Egg are expected to be among Barclays’ highest earners this year, with their share of the deal likely far exceeding what they would have made as middle managers at Barclaycard US. But that’s all in the past now.

In the banking realm, there’s a phrase that’s become infamous: “Thank you for your input,” which is said to be one of the rudest things you can say in a meeting—without involving HR. But there’s a new phrase circulating that has raised some eyebrows as well; it supposedly translates to “I respectfully decline your request” and has reportedly sparked frustration among institutional investors because of its frequent use at law firm Kirkland & Ellis when talking about private equity investments.

The firm has faced some backlash for their refusal to negotiate terms, leading to difficult situations for clients. At this year’s investor conference, the phrase “Fire K&E” reportedly appeared quite prominently, a testament to their struggles.

Interestingly, while Kirkland is trying to improve their internal communication, some believe the issue runs deeper, suggesting they have been a bit too assertive in negotiations, which was not what clients had hoped for. They’ve even brought in a former managing director from an investor trade group to mend fences. It’s easy to place blame on lawyers in these kinds of situations, but Kirkland’s size in the private market and shifts in power dynamics among investors have likely played a role. It’s much easier to be pleasant during a booming market than during tougher times.

Meanwhile, at the Riyadh Future Investment Initiative, Paul Taubman pointed out issues with past trades, particularly those made right after 2021, when the market was flush with cash. He noted that there’s been quite a bit of time spent fixing those arrangements. Interestingly, no CEOs have quite grasped that many of these deals were made by teams mostly working from home.

In another notable case, a judge in a $70 million lawsuit involving a U.S. fintech firm made a reasonable observation: multimillion-dollar stock grants aren’t usually secured with just a phone call.

In staffing news, JPMorgan has appointed a global co-head of investment banking as part of its $1.5 trillion investment plan in national economic security. Complementing that, Dorothy Blessing has been named as the sole reporting director.

Mike Lamb, who once led global insurance at Citi, is stepping down from his position. In the broader corporate world, it seems there’s a growing sentiment among CEOs, including Jamie Dimon, pushing back against texting during meetings. It seems that many executives want to feel heard and valued in discussions.

Strangely enough, former “sex spy” claims have surfaced, suggesting that a certain strategy could work wonders for both lonely engineers and bankers when it comes to dating. But, of course, one has to wonder how much of that is actually true.