NEWSMAKER-New LSE chief Rolet pledges to keep clients happy
By Daisy Ku
LONDON, Feb 13 (Reuters) - Xavier Rolet, keen fly fisherman and former Lehman banker, will have his work cut out to keep clients hooked when he takes over as London Stock Exchange (LSE.L) chief executive in May.
The 49-year-old Frenchman will bring decades of trading experience to bear when he begins work on fulfilling a pledge to focus on building relationships with customers and colleagues.
Rolet, who worked at Lehman Brothers, Credit Suisse (CSGN.VX) and Goldman Sachs (GS.N), was called in by the LSE board as the exchange battles a sharp decrease in trading activities amidst the worst economic crisis in more than 70 years. [ID:nLD68738]
Upstarts such as Chi-X, Turquoise and BATS, backed by some of the bourse's biggest clients, are also challenging the dominance of the centuries-old bourse with their cheaper, faster trading engines.
The appointment marked the end of the era of Clara Furse, who saw off a flurry of hostile bids but failed to build up a meaningful derivatives business while fighting a painful battle with some of the LSE's biggest clients over trading fees.
"One of the positive aspects is that Rolet, being ex-Lehman, has the lens of an ex-customer. This will provide a fresh perspective," said Celent senior analyst Cubillas Ding.
Andrew Gowers, the former Financial Times editor who worked with Rolet at Lehman, said the new CEO was a good choice.
"He knows the trading systems well, he knows about the interaction between technology and price formation, and he knows the politics of exchanges," he told Reuters.
The newly-appointed chief executive is not keen to talk up his plans yet. Instead, he counts interpersonal relationships and keeping clients happy as keystones.
"There is no doubt as a company, we are here to serve the interest of our shareholders. But we could only do so if we satisfy our clients' needs and keep them happy," Rolet told Reuters in an interview.
"I intend to continue to spend a considerable time with our clients, not only to help them with today's issue, but to help think together in terms of future product design, developments and solutions to their particular issues, questions and demands."
Rolet says exchanges face "seminal competitive opportunities" driven by regulation, liquidity and counterparty risk.
Worried investors have sent LSE shares 72 percent lower over the past 12 months. The shares rose 3.2 percent on Friday, after Rolet's appointment, but still trade at a significant discount to those of top rival Deutsche Boerse (DB1Gn.DE).
"As alternative venues continue to bite in little chunks at LSE's cake, his challenge will be to make LSE not just mean, but lean and nimble enough to face price erosion effects and the challenge of innovating faster," added Celent's Ding.
WELL-CONNECTED
A long-time advisor to the LSE associated with the group since 1997, Rolet chaired the bourse's strategic advisory committee between 2001 and 2006.
The multilingual former head of Lehman Brothers' operation in France also brings with him personal links with exchanges including NYSE Euronext (NYX.N)(NYX.PA), Deutsche Boerse (DB1Gn.DE) and Nasdaq OMX (NDAQ.O).
Rolet says the sector will see "major strategic moves" in the coming months and years but he reckons the LSE's "strong culture" and united approach gives it substantial advantages.
Hired by former Goldman Sachs head Robert Rubin straight out of Columbia University in 1984, Rolet went to the same boot camp as Duncan Niederauer, now NYSE Euronext CEO.
Centaurus Capital hedge fund co-founder Bernard Opetit supported Rolet in the Dakar-Lisbon rally.
Father of two daughters and a son, Rolet not only rallies, but also grows wine and keeps bees with wife Nicole on a private estate in Provence. (Editing by Quentin Webb, John Stonestreet)
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