Custodians go on a hiring spree

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Right now, headhunters are positively glowing with health, wealth and happiness. Forget the run-of-the-mill, middle-ranking moves of relationship managers from one shop to another; a recent spate of senior management transfers has been in progress for nearly six months with no sign of any let-up. The movements could also be a useful barometer as to who is hot and who is not.

HSBC has been hot for some time, having largely rebuilt the senior management team of its investor services business. Its latest coup is to hire Richard Godfrey, who has made a name for himself at Mellon as head of its European fund services division. Godfrey will be running big outsourcing deals for HSBC, having gained valuable experience with the initial phase of the F&C Management transaction at Mellon.

He will join another HSBC newcomer, Alex Powell, who has come in as chief operating officer for the group securities services business, reporting to John Gubert. Powell was a heavy hitter at Accenture, working as a partner specialising in capital markets.

BNP Paribas Securities Services is also in the ascendant, having reorganised in the summer. Margaret Harwood-Jones, who runs global sales and relationship management for institutional investors, is acquiring talent for a fresh assault on the market and has tempted Scott Dickinson from Rabobank, where he had been selling securities finance and treasury products.

Dickinson is an old hand in the custody business, having been part of the successful strike force at Bankers Trust that was assembled by Dick Feehan, now at JP Morgan Investor Services. He also has first-hand experience of working for a European custodian, having had a spell with Swiss Bank Corporation when it had brief pretensions to glory.

Another name who has floated back into view is Martin Brennan, perceived by some as one of the nearly men of the custody business. Having established a good reputation with Barclays' global custody division - one of the few who managed that feat - Brennan pursued a different career path within the bank before ending up at Cedel/Clearstream, an institution that, despite its generous pay packets, is nothing more than a glorified depository. Brennan survived the fall-out from the scandals surrounding the firm and left this year. His appointment as global head of sales and client management for Omgeo, the trade matching vendor, will surprise those who thought he would move back into a senior investor services role.

Having been on the wrong end of Godfrey's decision, Mellon has been hiring. It had a good result with its recruitment last month of David Copley, head of investment operations and transfer agency at Deutsche Asset Management. The joint venture, ABN Amro Mellon, has also been hitting the phones, pulling in John Morris to run its new trustee and depositary business, as well as hiring Peter Adams from State Street to head European sales.

Northern Trust has had a busy time with headhunters, particularly at the middle-management level. But few can have expected that it would hire Wilson Leech from State Street to become head of strategic planning for the international division. Northern tends to nurture its own talent and hiring externally for such a senior role is rare. Leech is widely admired for the work he did at State Street - except, presumably, by those at State Street who failed to persuade him to stay.

State Street has been quieter at senior levels. In the US, it lost Drew Pace, director of sales and marketing for investor services, to Mellon but added Wade McDonald to its European team. McDonald left JP Morgan Investor Services to become regional head of client services and is not the only one to have left the firm. With an effective hiring freeze during the Bank One merger, JP Morgan has been shrinking through agreed departures and resignations. But the essential problem with the business has not changed, despite the arrival of Heidi Miller as head of treasury and securities services. Much of the senior management team has been in place too long and needs to be moved on. There is stasis where there should be dynamism.

The other custodian that has made no significant hiring moves is Citigroup. Like JP Morgan, Citigroup's transaction services business is dominated by cash management, which generates almost twice as much revenue as securities services. Perhaps the US group thinks it has all the talent it needs - or perhaps it is having difficulties attracting new staff into a business that has fallen well off the pace of its larger competitors.

The party is not over, with other big-name transfers being close to completion. Every organisation needs an occasional transfusion of fresh blood to keep it lively and custodians that fail to sign new players are sending a negative message to the market.

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