Investment bank startup Barrenjoey Capital has passed a crucial operating hurdle, gaining a licence to operate on the ASX and Chi-X platforms, as it continues to raid executive talent from rival groups.
Investment bank startup Barrenjoey Capital has passed a crucial operating hurdle, gaining a licence to operate on the ASX and Chi-X platforms, as it continues to raid executive talent from rival groups in an attempt to quickly establish itself as a top-tier market player.
The ASX admitted Barrenjoey Capital as a market participant on its platform on Friday which allows the group to clear and settle trades in its own name. Chi-X confirmed on Monday that it too had accepted the startup as a trading participant on its platform. Barrenjoey plans to offer services such as fixed income, equities and corporate advisory to high-end clients.
Barrenjoey Capital CEO Brian Benari, executive chairman Guy Fowler and COO John Cincotta. The team has grown to include senior bankers from UBS and JPMorgan.Credit:Louie Douvis
In September last year, Barrenjoey said it had applied for full ASX participation to provide clients with execution, clearing and settlement capability across equity markets and related products. The company has been approached for comment.
Barrenjoeys corporate finance business was operational last year from its Sydney office, but its markets business was not due to start operations until mid this year subject to it receiving market participant licences and appropriate staffing.
It will be a costly exercise as it poaches top tier staff from rival firms, waits for them to serve notice from their previous roles, and pays the bonuses and other remuneration needed to entice the executives to jump ship.
On Monday, 10 senior UBS executives resigned to join Barrenjoey, including banking analyst Jonathan Mott, mining analyst Glyn Lawcock and gambling and transport analyst Matt Ryan. The repercussions are expected to be felt across the entire industry with UBS expected to replace the key talent with poaching expeditions of its own from other players within the industry.
Fund manager Magellans recent half-year results have offered the only real visibility of Barrenjoeys operations via its 40 per cent stake in the business. The ASX-listed Magellan reported a $6.1 million loss for the December half-year on its investment in the Barrenjoey operation.
Barrenjoey Capital was set up last year with some prominent backers including funding from Magellan and British bank Barclays, but the majority of equity will be owned by its employees.