Where some saw only a financial meltdown, Robert E. Diamond ’73, P’12 saw opportunity.
The president of Barclays and a member of Colby’s Board of Trustees, Diamond bought the core U.S. investment banking business of bankrupt Lehman Brothers, making London-based Barclays one of Wall Street’s biggest players.
News reports predicted the $1.75-billion deal would save about 8,500 jobs, with Diamond telling staffers at Lehman’s New York headquarters, “You have a new partner.”
Lehman had been Wall Street’s fourth-largest investment bank. Its collapse followed close on the heels of the sale of Merrill Lynch to Bank of America in what quickly became a mushrooming global financial crisis.
Diamond, 56, is credited for turning around Barclays’ once-moribund investment arm, Barclays Capital, which in recent years has driven Barclays’ profits and become one of the most successful investment banks in the world.
Last year Barclays’ bid to buy Dutch rival ABN AMRO came up short as a consortium headed by the Royal Bank of Scotland prevailed. The Lehman deal is similar in that it moves Barclays into the top tier of global investment banks, analysts say.
Diamond was among possible buyers talking to Lehman Brothers just days before the bankruptcy filing. Barclays walked away from that round of talks after U.S. Treasury Secretary Henry Paulson declined to insure some of the risk, according to news reports.
But Barclays, and Diamond, returned to consummate the eventual deal.
“This is a once in a lifetime opportunity for Barclays,” Diamond said in a statement. “We will now have the best team and most productive culture across the world’s major financial markets, backed by the resources of an integrated universal bank. We welcome the opportunity to add Lehman’s people and capabilities to the Barclays team.”