December 10, 2009 / 12:14 PM / 10 years ago

UPDATE 2-Ex-Lehman Europe chief returns with Marex deal

* JRJ co-founder Isaacs says will look for more deals

* JRJ Group takes 75 pct stake in former Refco business

* Deal worth “several hundred million pounds”

* Isaacs said did not want to replace Fuld as Lehman CEO

(Adds more comments from Isaacs)

By Steve Slater

LONDON, Dec 10 (Reuters) - The former European head of Lehman Brothers, Jeremy Isaacs, struck the first deal for his investment firm by snapping up a majority stake in commodities firm Marex Group, and said bigger deals could follow.

Isaacs was the former head of Lehman Brothers in Europe and Asia, and was touted as a possible replacement for the bank’s chief executive Dick Fuld but left the U.S. investment bank in September 2008, a week before it collapsed.

He told Reuters he never wanted to take the helm from Fuld, but has big plans for his new business.

JRJ Group, the investment firm Isaacs set up in January with Roger Nagioff, another former Lehman Brothers banker, said on Thursday it was buying a 75 percent stake in Marex.

Terms of the transaction were not disclosed, but Isaacs told Reuters the deal was worth “several hundred million” pounds.

More deals could follow. “We could definitely do a bigger deal and reverse this into one of the big platforms or buy some of the undercapitalised smaller firms, and there are a couple of other companies out there you could do mergers with,” Isaacs told Reuters in a telephone interview.

RBS Sempra, the joint venture between Sempra Energy (SRE.N) and Royal Bank of Scotland Group Plc (RBS.L), which sources have said might be sold [ID:nNGEE5B815], was an option, and JRJ and other firms were likely to look at it, Isaacs said.

“There are many things out there on our potential shopping list,” he said.

JRJ is backed by a range of investors, including investment firms and wealthy individuals, he said.

Funds affiliated with Marathon Asset Management will retain a 20 percent stake in Marex, and management will keep 5 percent.

Marex was formed by Marathon in January 2006 out of the remains of the overseas operations of U.S. firm Refco, which filed for bankruptcy protection in October 2005 after its chief executive hid $430 million in debt.

Marex is a major metals trader and has a leading position in some crop commodities and is also involved in energy, foreign exchange and financial futures markets.


The deal marks a return to action for Isaacs 15 months after he resigned from Lehman Brothers, where he spent 12 years and was seen by some as a successor for Fuld.

“I’m proud to say that I was viewed for a long time by many people as a potential successor and that was a nice thing, but I was always very clear I was never going to New York,” Isaacs told Reuters.

The bank needed to be led from New York, as that was where “the risks, the issues and the challenges” were, but Isaacs said he had no interest in leaving London.

The collapse of Lehman was a shock, he said.

“I didn’t see what was coming and even today I’m amazed at what happened. Even on the Sunday that it happened I’d have never guessed they’d let the firm go,” he said. The decision by U.S. authorities not to rescue Lehman was a mistake and deepened the financial crisis, he said.

Isaacs said he resigned from the bank in June, after Bart McDade was appointed as president.

“The firm had made a choice, a decision that I respected and I thought was the right choice, but it made it untenable for me to stay, so I resigned,” he said, adding that he agreed to give the firm flexibility on the timing of his exit, given difficult market conditions.

His departure was announced on Sept. 7 and he agreed to stay until the end of 2008. The bank collapsed on Sept. 15. (Additional reporting by Quentin Webb, editing by Will Waterman and Mike Nesbit)

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