Citi Combines Debt & Equity Capital Markets

Citi announced an ovehaul of the structure of its investment banking activities Tuesday, combining its Equity Capital Markets and Fixed Income Capital Markets units. The sales functions of equities, fixed income, currencies and commodities will also be merged. Some job losses are likely as a result of the move.

Here's the full memo sent to staff, courtesy of The New York Times 'DealBook' column:

'Date: November 13, 2007
To: Markets & Banking Employees
From: Jamie Forese
Re: Global Capital Markets Organizational Announcement

During the last several months, our firm and industry have faced enormous challenges. Despite these, Citi remains one of the premier Capital Markets franchises in the world. Simply stated, we are leaders in nearly every market in which we compete.

Going forward, we have decided to adopt a model that will more closely align our origination and sales functions across traditional product categories. By doing so, we will be better positioned to provide clients with the highest quality advice, the most innovative solutions and the best execution.

I am pleased to announce the following:

* Origination – We will combine Equity Capital Markets (ECM) and Fixed Income Capital Markets (FICM) activities to form Capital Markets Origination. Tyler Dickson will lead this unit and report to me. He and his capital markets managers will continue to work closely with their partners in the Banking organization to provide an even better alignment of coverage resources.

* Sales – We will integrate our sales and relationship management functions across Equities and Fixed Income, Currencies and Commodities (FICC) in all regions to form the Investor Client Group. Antonio Cacorino and Jim O’Donnell will co-head this group and report to me.

* FICC Products will continue to comprise G-10 Rates, FX and Local Markets, Finance and Risk Treasury, Securitized Markets, Commodities, Credit Markets, Strategy and Analysis and the Special Situations Groups. Paco Ybarra will lead this unit and report to me.

* Equities Products will continue to comprise Cash, Convertibles and Equity Derivatives. Jim Cowles will lead this unit and report to me.

* Regional heads of FICC and Equities will continue to have responsibility for the respective product activities in their regions including Origination and Sales. They will report to Paco Ybarra or Jim Cowles, and they will continue to report to their respective regional CEOs of Markets and Banking.

* Hedge Fund Services and Global Futures will continue to report to Steve Bowman. Steve will report to Paco Ybarra and Jim Cowles and will maintain his reporting line to the Securities and Fund Services division of Global Transaction Services. Steve will have primary responsibility for coordinating our Hedge Fund client business across Capital Markets. Relationship managers for Hedge Funds will report jointly to Steve as well as to Antonio Cacorino and Jim O’Donnell.

* Ward Marsh continues as Head of the Municipal Securities Division.

* Lewis Alexander continues as Chief Economist and Head of Economic and Market Analysis

* Shawn Feeney continues as Chief Administrative and Financial Officer for Global Capital Markets. Ward, Lew and Shawn will report to me.

* Chad Leat will assume a senior role focusing on key clients and transactions globally. Additionally, Chad will lead the management of our current leveraged finance pipeline and will assist Tyler with transitional issues as needed.

* Mark Watson will also work with Tyler, as well as Paco, on transitional issues before taking a new position within the organization.

While our platform is indeed unequaled in the industry, the quality of our people has been the key determinant of our past success. Going forward, I ask for your same commitment to ensure our continued success'.

The upshot of all this is that three of the investment bank's five global heads now sit in London.

On another Citi matter, The Financial Times reports that New York Stock Exchange CEO John Thain might not be the shoo in for Citi CEO everyone thinks he is. He is said not to have even made it to the shortlist considered by the firm's search committee Tuesday.

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