Barclays Wealth, a bank which has been
rapidly moving up the ranks of the top-tier wealth managers, took
the Award for Outstanding Strategy in Wealth Management at
Private Banker International’s 2008 industry honours. Its
chief executive, Thomas L Kalaris, talks to John
Evans about the heady pace of recent months.

PBI:
You now have Lehman Brothers’ Private Investment Management (PIM)
business, a $50 billion assets operation with offices across the US
and Latin America, to absorb. Why is this a good deal at a time of
such turbulence? And does this really start to give Barclays Wealth
(BW) balance – across Europe, the Americas and Asia?

TK: This was not just a good deal, this was a great deal. As the
UK’s largest wealth manager, we had put on record that a presence
in the US was essential to give us balance as a truly global
player. Now we have achieved it. We had done all the groundwork and
due diligence when looking at the feasibility of opening a New York
office from scratch next year.

So when the chance to talk with Lehman about the PIM business
came up, we saw not only an exceptional opportunity, but one that
we could make a judgment on very quickly indeed.

And, to be frank, this would have been a great deal whatever the
markets were doing. It has moved us forward by five years in terms
of our strategy.

With PIM, we’re gaining significant net new assets, 12 offices
in the US and South America (Buenos Aires) and close to 1,000
staff.

At a time when so many of our competitors are shrinking their
businesses, we have sent a strong signal that we remain confident
in our belief that we can take advantage of the many opportunities
market turmoil inevitably throws up.

In 2009, we’ll build on this base. We will continue to
consolidate – and in some cases grow – our footprint across the
Americas, Europe, Asia, Middle East and North Africa.

PBI: What type of balance are you eventually
looking for – UK versus rest of world?

TK: Last year, Barclays as a group earned almost 60 percent of
its income and profits before tax from outside of the UK.

We have developed a universal banking model that is dynamic, can
be flexed according to markets and is one of the world’s leading
players. Barclays Wealth mirrors these characteristics. Our clients
are global – originating from, or resident in, over 140 countries
in the world – so we need to be as close as possible to them
geographically.

There is no definitive goal for a geographical split of assets –
although the diversification of our asset base is increasing in
common with the Barclays Group as a whole.

Together with our launch of the onshore India business and our
continued investment in our Asia and Middle East businesses, the US
move helps the balance.

That said, our headquarters remain in the UK and we continue to
be the UK’s leading wealth manager by client assets under
management. That is important.

PBI: In terms of broad strategy, what else
should we look for over the next two years or so from BW? Is there
a strategic area, for example hedge funds, which you have to be in
more prominently?

TK: Our ambition is to redefine the landscape of wealth
management. Clients are getting ever more sophisticated and
increasingly demand the same level of quality and sophistication in
the management of their private wealth as they do in their
commercial lives.

We are seeing the “institutionalisation” of the industry.
Barclays Wealth naturally sits at the forefront of this trend. What
you should expect to see from us is the same type of approach and
solutions choice you’d get in the institutional world; leveraging
the financial strength, trust and tradition of the Barclays Group
and the intellectual firepower of Barclays Capital and BGI to
deliver a truly leading-edge proposition to our clients.

PBI: After the credit crisis, the opinion seems
to be that private banking will see active consolidation, as some
weakened players sell off their wealth units and assets. Will you
be a ‘consolidator’ if this process gains momentum, for example
more deals like Lehman?

TK: I agree – and we will be a consolidator. The Lehman’s move
is likely just a first step. The systemic shock in the financial
markets has resulted in market dislocation with several notable
mergers and acquisitions, including the creation of the world’s
largest wealth manager (Bank of America /Merrill Lynch).

Going forward we will continue with our strategy of organic
growth while looking seriously at inorganic opportunities as they
arise and on a case by case basis.

PBI: In terms of specifics, what would tempt
you most – a private banking deal in Europe, another in North
America or in Asia? Or would it be the best buy at the best
price?

TK: It all depends on the specifics of the opportunity that
arises. We had a major hole in the US – that has been dealt with –
but this is not the only thing we’ve been doing.

We’ve opened an office in Mumbai, with five further India
offices planned by early 2009, established a 200-staff proposition
in South Africa, currently trading under an Absa Wealth banner, and
the Barclays partnership with SMBC offers potentially very exciting
possibilities in Japan, the world’s second biggest wealth
market.