Xavier Rolet thanked his staff in his last public comments as chief executive of the London Stock Exchange Group, just hours before LSEG announced his immediate departure.
Collecting the lifetime achievement award at the annual Risk Awards dinner on November 28, Rolet said: “More than 6,000 staff around the world are going to be clearing, trading and settling about a quadrillion dollars of securities and financial contracts. This one is to all my 6,000 colleagues around the world – I will miss you, thank you.”
Rolet, who had been chief executive since March 2009, jokingly offered his services to anyone seeking an “experienced trader”, and said he had seen the “upside and downside” during his earlier career in investment banking. After training in the French air force, he joined Goldman Sachs in 1984, and rose to become head of Lehman Brothers in France at the time it collapsed in September 2008.
“I started my career at the best investment bank in the world – though some might argue with that – and ended up at the most famous investment bank in the world – no-one would argue with that.”
The LSEG share price rose more than five-fold during Rolet’s tenure, as he bolted on acquisitions including dark pool trading venue Turquoise, clearing house LCH, and built the world’s largest index business by bringing together FTSE and the indexes division of Frank Russell.
However, the end of his time at LSEG has been marked by controversy. In October, the company announced Rolet’s departure by the end of 2018. This prompted Christopher Hohn, manager of the activist Children’s Investment Fund Management, to demand Rolet’s reinstatement, and the resignation of chairman Donald Brydon instead. LSEG has now announced that Brydon will also depart, in 2019.
Allan Yarrow, a director of Turquoise who previously hired Rolet as deputy head of global equities and later head of risk and trading at Dresdner Kleinwort, paints a picture of an “intensely bright”, strong-willed but well-respected manager.
He did a truly wonderful job for us at Dresdner Kleinwort and he deserves the recognition he has got for the much bigger job he has gone on to do at LSEGAllan Yarrow, Turquoise
“Very polite and considerate, but somebody who has convictions. Very popular with his staff but can be a tough manager. He did a truly wonderful job for us at Dresdner Kleinwort and he deserves the recognition he has got for the much bigger job he has gone on to do at LSEG,” says Yarrow.
In an interview with Risk.net two weeks ago, Rolet recalled meeting shareholder resistance to his plans for a strategic overhaul right at the start of his time as chief executive.
“I said to them, fundamentally, the two drivers of growth and value will be intellectual property, namely indices, and balance sheet products – clearing and post-trade services. Many investors at the time thought the best strategy for the company was a sort of pump and dump – cut your costs, improve your technology… then a few months down the line, somebody comes in and puts an offer on the table and we will double our money,” said Rolet.
Instead, Rolet went on to make 24 acquisitions during his time in charge, mostly at a deep discount to market valuations. An attempted merger with Deutsche Boerse failed in February 2017, however, after LSEG rejected a demand from the European Commission competition authorities to sell Italian bond trading platform MTS. LSEG had specifically promised the Italian finance ministry it would not sell MTS.
“Sometimes things don’t work out… We came very close to success, the commission had indicated they were minded to clear the deal, but an extraneous event happened that had nothing to do with LSEG or me, which effectively killed the prospect of a deal,” said Rolet in his interview.
The full interview with Rolet will be published next week.
The week on Risk.net, March 10-16 2018Receive this by email