John Stumpf is hitching his Wells Fargo’s wagon to hedge fund maestro Ken Griffin.
The chief executive yesterday announced the San Francisco-based bank scooped up a 25-person crew from Griffin’s aborted attempt at building his Citadel LLC into an investment banking powerhouse.
The deal, which won’t result in Stumpf’s bank shelling out any cash, represents a baby step for the CEO as he attempts to shed Wells Fargo’s image as an also-ran in big Wall Street mergers and stock offerings.
Instead of a cash payment for the investment banking team, Wells is likely to share fees with Citadel on a handful of assignments that Citadel has scored.
That includes the highly anticipated initial public offering of daily deal site, Groupon, in which Citadel was a part of a string of banks assigned to the offering.
Although Citadel is playing only a bit part in the Groupon transaction, the IPO will allow Wells to bag coveted bragging rights on so-called “league tables” — a highly watched measure of how active banks are at scoring Street deals.
For example, Wells Fargo’s investment banking arm Wells Fargo Securities, hasn’t cracked the top 15 in M&A league tables since 2008 when it ranked 13th and Goldman Sachs came in at No. 1.
Viewed sometimes as a more conservative bank than its peers Bank of America and JPMorgan Chase, Wells has largely avoided the pitfalls of investment banking blowups since 2008.
However, Stumpf, over the past two years, has expressed a desire to slowly ramp up its investment banking business as other investment banking titans Goldman Sachs and Morgan Stanley have been forced to scale back due to harder-hitting regulations.