Citi's M&A bankers are thriving with no permanent leader
What happens if you leave some M&A bankers to get on with things without a long term leader? Citi's newly released first quarter results suggest they will be just fine.
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Revenues in Citi's M&A business rose nearly 85% year-on-year in the first quarter. This wasn't only better than Bank of America's feeble 7% rise, or Goldman's 22% drop, it was nearly quadruple M&A revenue growth at Morgan Stanley and over five times higher than the growth at JPMorgan.
Who's driving this increase? Not Tyler Dickson, Citi's former head of US investment banking who left for Blackstone last July. Not Anthony Diamandakis, Citi's top asset management dealmaker, who escaped to an unknown destination in March. Maybe the "deep bench" of Citi bankers referred to by newish head of the investment bank Vis Raghavan at Davos in January.
That bench includes Kevin Cox, the US industrials banker, whom Raghavan made interim head of M&A at Citi globally last October. It had been expected that Cox would either be made permanent head earlier this year, or that Raghavan would promote someone else instead, like Chuck Adams, Brian Link, Phil Drury, or Christian Anderson.
Instead, no one has been promoted yet, and that doesn't seem to have mattered. Citi's M&A team is flourishing in its leaderless situation - it may even be that competition among bankers to gain the top spot is driving the growth.
It may also be that Citi is offering more financing for M&A deals. The Wall Street Journal reported last November that Raghavan wanted Citi to offer more financing to private equity firms and to do more cross-selling. The bank's big increase in M&A fees might be taken as a vindication of Raghavan's approach, his high pay, and of his various hires from JPMorgan. Speaking on Citi's investor call, CEO Jane Fraser said the bank is benefitting from its "talent investments" and leading role on transactions like Siemens' acquisition of Altair Engineering and Johnson & Johnson's acquisition of Intercellular Therapies.
Some of Raghavan's hires don't seem to have worked out as well as others, though. Raghavan hired former JPMorgan colleague and equity capital markets (ECM) banker Achintya Mangla in September 2024 and made him head of debt capital markets (DCM) too. ECM revenues fell but didn't do badly relative to rivals. However, Citi's DCM business underperformed in the first quarter.
The success of Citi's M&A bankers may help shelter them if revenues falter during the remainder of 2025. Phil Drury, Citi's head of technology M&A and one of the various candidates for the leadership role, declared on Monday last week that M&A was thriving thanks to the "new US Administration, which is expected to promote a more supportive environment in terms of deal-making." That hasn't been the case since last Wednesday.
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