Call them Wall Street’s comeback kids.
The buzz in financial circles is that two fallen bank stars — former Citigroup CEO Vikram Pandit and Barclays boss Bob Diamond — are plotting their returns soon after being booted from their respective banks.
This time, however, both are hoping to avoid the harsh glare of running a publicly traded firm by working in the so-called shadow banking sector.
Industry insiders say that Pandit, who was a hedge-fund manager before selling his firm to Citi, is looking at starting a private-equity firm.
After five years in the top job, Pandit made an unceremonious exit from Citi in October after clashing with new Chairman Michael O’Neill, who tapped Citi veteran Michael Corbat to be the new CEO.
Pandit pocketed a cool $165 million from selling his hedge fund, Old Lane, to Citi for $800 million in 2007. Within months, Pandit would get the top job at Citi, which wound up shuttering Pandit’s hedge fund several years after acquiring it.
Pandit started Old Lane with colleagues including John Havens, who eventually joined Pandit at Citi. Havens, who left Citi soon after his boss, may also be working with Pandit on the new venture.
Meanwhile, Diamond, who resigned from Barclays amid an embarrassing interest-rate rigging scandal, is said to be working on launching his own firm.
Sources familiar with Diamond’s thinking said that he is considering launching a hedge fund, possibly based in New York.
“Bob wants to come back to Wall Street and whether it is soon or in six months isn’t clear,” said one source.
The former Barclays boss has hired public relations pro Paul Verbinnen, co-founder of Sard Verbinnen & Co.
Diamond, who may look to leverage his massive Rolodex of corporate clients, could not be reached. A call to Verbinnen was not returned.
Diamond, who orchestrated a takeover of Lehman Brothers’ core investment bank during the financial crisis in 2008, resigned under pressure from the bank’s board and UK regulators in August after Barclays was ensnared in a massive interest rate rigging probe.
Barclays agreed to shell out roughly $430 million to settle allegations that its traders conspired to rig a key interest rate known as Libor.
Diamond has kept a low profile since his ouster but is intent on making a return, sources said.
Both Pandit’s and Diamond’s plans are in the very formative stages, sources cautioned.