GLOBAL - RBS has shut down its transition management business as it seeks to focus on its core business.
Sources confirmed the three strong team of Steve Webster, Struan Malcolm and Adekemi Adebajo has been disbanded and were in consultation with RBS.
A RBS spokesperson told Global Pensions: "We are taking this action to effectively manage the business in light of market and economic conditions, in line with our objectives."
This comes just days after Global Pensions revealed Citigroup had lost several senior team members across its European and US operations (Globalpensions.com; 5 January 2009).
UBS had announced its exit from the market in December last year; Credit Suisse lost its European transition team after shifting execution to its US office in May and Lehman Brothers transition business shut when the bank filed for bankruptcy in September.
Five investment banks have now either quit the transition management business or lost their European teams in little under a year - with investment consultants Mercer saying that clients now preferred the relative stability of buy side managers.
Earlier this week, Ben Gunnee, European director at Mercer Sentinel Group, predicted there could be more closures of sell side transition teams as banks looked for ways to cut headcounts.
He said: "Many clients are moving towards the asset management model for transition management because they don't want their manager disappearing mid transition."
Defending the investment banking model, JP Morgan global head of transition management John Minderides said: "These changes are more a reflection of market conditions than an indictment of the investment banking model. In the future I think we will see a number of banking institutions coming back into the market because the model still has something to offer."
State Street Global Markets European head of portfolio solutions David Goodman claimed the introduction of the T-charter - an industry code agreed by most transition managers in Europe - had increased the required resource for managers and may have influenced some investment banks when deciding to carry on with the business.
He said: "Complying with the T-charter has meant that some businesses were not able to generate trade flow they had been hoping to."
Mellon Transition Management & BNY Mellon Beta chief executive officer Mark Keleher claimed the US had seen a shift in clients to the fiduciary model during the volatility of the last quarter of 2008.
He said: "The teams which have exited the market were great professionals, and I think this more a reflection of the business model." Asked if BNY Mellon Transition Management was hiring, he replied: "We see ourselves as a talent destination."
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