When Ray McGuire decided to leave Morgan Stanley as co-head of global M&A last month, the talk on Wall Street was that the embattled firm had suffered yet another high-level defection that would further tarnish its investment banking franchise. Less talked about, but potentially more significant, is what McGuire's move means for Citigroup, the firm that hired him.
"We've done well in M&A, but we've underinvested in our advisory capabilities," says Michael Klein, CEO of global banking at Citigroup and McGuire's new boss. During the credit crunch that followed the 1990s stock market bubble, corporate clients were preoccupied with restructuring their balance sheets. That played to the giant bank's sweet spots, lending and bond underwriting. Now that companies are again thinking about growth, Citi needs to boost its advisory capabilities. "Ray's real value-added will be helping lead us toward being not just the best financing firm on Wall Street but also the best advisory firm on Wall Street," says Klein.
"Our objective," asserts McGuire, 48, who starts July 1 as co-head of global investment banking, "is to be the adviser of first choice for demanding and sophisticated clients. My joining the firm should be a signal to the marketplace of the seriousness of Citigroup's commitment to investment banking."
Over more than two decades in M&A, McGuire has built a wide network of relationships with corporate CEOs and directors. He began his career in Credit Suisse First Boston's M&A group in the 1980s and later joined boutique advisory firm Wasserstein Perella. A stint at Merrill Lynch preceded his five years at Morgan Stanley. At Citi, McGuire will share the global investment banking job with another CSFB veteran, Alberto Verme, who has been with the firm since 1994.