Magazine article American Banker

Latest Defection from Bankers Trust: Syndication Chief to Morgan Stanley

Magazine article American Banker

Latest Defection from Bankers Trust: Syndication Chief to Morgan Stanley

Article excerpt


Bankers Trust New York Corp. has suffered another high-level defection, losing managing director L. Bram Smith to Morgan Stanley & Co.

Mr. Smith will lead the fledgling origination, syndication, and bank loan trading efforts at Morgan Stanley, mirroring his responsibilities at Bankers Trust, where he worked for 18 years.

His departure is a blow to Bankers Trust, which is under new management and trying to bounce back from problems in its derivatives business.

Mr. Smith's move also represents further progress in investment banks' foray onto syndicated lending turf once dominated by commercial banks.

With Mr. Smith's arrival, Morgan Stanley follows other investment banks, such as Goldman, Sachs & Co., Merrill Lynch & Co., and CS First Boston, in developing loan syndication businesses and staffing them with commercial banking executives.

Indeed, just last week, Bankers Trust lost another loan syndicator to an investment bank when Justin Vorwerk joined Goldman.

"Bram Smith's departure is bad news for Bankers Trust," said Raphael Soifer, a bank analyst at Brown Brothers Harriman & Co. "He's a very good man with an excellent reputation in the industry."

Mr. Soifer said that Bankers Trust has been losing executives because of small bonuses following a bad year for the bank. Bonuses are not expected to grow in the next year as the bank changes its business mix under new chief executive Frank Newman.

"I expect Bankers Trust to do something about compensation to hold people of the caliber of Bram Smith during this period of transition," Mr. Soifer said. He added that Bankers Trust's young, talented staff gives it "plenty of bench strength."

Bankers Trust has named 43-year old Kevin F. Sullivan, a founding member of the syndications group, to head the syndications, trading, and distribution operation. …

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