Andrea Orcel

Andrea Orcel
Born	(1963-05-14) May 14, 1963 Rome, Italy
Alma mater	University of Rome INSEAD
Occupation	Senior Banking Executive
Years active	1987–present
Spouse	Clara Batalim-Orcel ​ (m. 2009)​
Children	1
Relatives	Riccardo Orcel (brother)

Andrea Orcel (Italian: [anˈdrɛːa orˈtʃɛl]; born May 14, 1963) is an Italian investment banker. Orcel served as the president of UBS Investment Bank from June 2012 to September 2018.

Born in Rome, Italy, Orcel attended the University of Rome, Sapienza, graduating summa cum laude with degrees in economics and commerce. He attended the INSEAD business school in France after working at Goldman Sachs and before joining Boston Consulting Group during the late 1980s. In 1992, he was hired by Merrill Lynch & Co. where he spent the succeeding twenty years in their Financial Institutions Group and moved up through the ranks to become Executive Chairman of the Investment Bank. He left Merrill Lynch in 2012 to join Swiss bank UBS. From 2012 to 2018 Orcel led a major corporate restructuring, focusing on capital-lite strategy, and reduced the investment bank's wage bills by $3 billion through aggressive downsizing, making the UBS investment bank one of the most profitable on Wall Street.

Throughout the late 2010s, it was thought that Orcel would either succeed Ermotti as chief executive of UBS, or go on to lead either Monte dei Paschi (MPS), Cassa Depositi e Prestiti, or UniCredit. In September 2018 it was reported that Orcel has been tapped by Ana Botín to lead Banco Santander as its chief executive, but this move did not take place. Orcel has been dubbed the "Ronaldo of Investment Banking" by the international press and has been hailed as one of the "most successful investment bankers of his generation".

Early life and education

Andrea Orcel was born on May 14, 1963 in Rome, Italy, Orcel graduated from the University of Rome, Sapienza with degrees in economics and commerce, summa cum laude. He has stated that a vacation to the United States when he was 18 sparked in him a "passion for banking". His undergraduate thesis was on hostile takeovers. He went on to attend the INSEAD business school in Fontainebleau, France.

Career

Merrill Lynch

Orcel worked at Merrill Lynch & Co. from 1992 to 2012, a firm that was acquired by Bank of America in 2009 to create Bank of America Merrill Lynch.

Upon his graduation, Orcel was hired by American investment bank Goldman Sachs in 1988 to work in their fixed income business. A year later he left the firm to work as a senior consultant at Boston Consulting Group from 1989 to 1992 in their corporate restructuring and strategy departments. In 1992, he was asked to join Merrill Lynch & Co. in their Financial Institutions Group (FIG). Orcel orchestrated the $25 billion (€21.2 billion) merger of Italian banking groups, Credito Italiano and UniCredito to form banking conglomerate UniCredit in 1998. UniCredito had originally wanted to go public but the valuation that investment bankers at a rival bank gave it made them "unhappy". Orcel called the bank and offered to explore the possibility of a merger with a comparable company as the initial deal was going through; he brought them to Merrill Lynch a week later. The merger made UniCredit the largest bank in Italy. The following year he personally closed the $13 billion (€11 billion) merger of Banco Bilbao Vizcaya and Argentaria to create BBVA. BBVA became the second largest bank in Spain after the merger. Orcel served as the head of the Global FIG from 2003 to 2007, succeeding Joseph Willit. In 2004, Orcel initiated Spanish bank Santander's acquisition of British subsidiary Abbey National, expanding the banks operations into the United Kingdom in a deal worth $15.56 billion (£13.8 billion). He was tapped by Santander to advise them together with the Royal Bank of Scotland (RBS) in 2007 to advise on a $55 billion (£49 billion) acquisition of ABN Amro. The deal was orchestrated by Orcel after he brought in Fortis and Santander to execute a three-way consortium bid for ABN Amro. At the time, the bid set a record for the largest merger or acquisition in financial services history.

In 2008, in the middle of the financial crisis, it was reported that Orcel brought in $550 million (€483 million) in advisory fees for the bank, earning him an annual bonus of $33 to $34 million (€29 million). New York Attorney General conducted an investigation into executive compensation; however, no charges were brought forward against Merrill Lynch. His relationship with Santander's executive chairman, Emilio Botín, was reported as being particularly close during this time; Botín sent handwritten thank you notes to Orcel after each deal. Orcel, in turn, felt "emotionally attached" to the bank and the Botín family. In 2009, Orcel was asked to serve as the executive chairman of the BofA/Merrill Lynch investment bank. In February bruary 2011, Orcel brokered the $3.3 billion (€2.9 billion) initial public offering (IPO) of a 10% stake of VTB Bank from the Russian government with his brother Riccardo. Orcel led a team to execute a $8.5 million (€7.5 billion) rights offering for UniCredit, at the height of the Eurozone crisis in January 2012. Recalled as the "scariest [moment] of his career", he broke through Bank of America's risk limits to secure the deal, drawing widespread industry attention. In April 2012, Orcel was tapped by Swiss investment bank UBS CEO Sergio Ermotti to lead their investment bank and to head the UK business. Two of Merrill Lynch's largest corporate clients, UniCredit and Santander, reportedly transferred their business to UBS, following Orcel.

UBS

Orcel worked at the UBS Investment Bank from 2012 to 2018.

Following a corporate restructuring, Orcel was invited to the group executive board and appointed the co-CEO of the investment banking unit of UBS. Upon his acceptance of the position, UBS paid Orcel Sfr6.3 million in cash and awarded him Sfr18.5 million in stock options, for his deferred compensation of Sfr25 million (£17 million, $26.2 million, or €23 million). Upon joining, Orcel represented UBS at the British Parliament's banking standards commission to explain the company's role in the scandal. Present for nearly three hours of testimony, he expressed regret for his new firm's role and stated to commissioner Andrew Tyrie: "we all got probably too arrogant, too self-convinced that things were correct the way they were. I think the industry needs to change." Although he was hired in a primarily managerial role, he continued to advise some of the firm's higher profile clients and institutional partners. From early 2013 to late 2014 Orcel initiated a corporate restructuring of the investment bank, to "[stop] trying to be the biggest investment bank and [focus] on being the best". With a focus on return-on-investment (ROI), deleveraging, and cost reduction, Orcel increased majority capital positions while reducing capital. In February 2016, he orchestrated the merger of Vodafone's and Liberty Global's operations in the Netherlands to create a joint venture in a deal worth $1.1 billon (€1 billion).

During his tenure he averaged a yearly return-on-equity of 13.4% to 29.2%. In August 2018, a UBS Investment Bank trainee accused one of the managing directors of drugging and sexually assaulting her at a social gathering in September. Orcel appeared on Bloomberg Markets later that day explaining a revamped infrastructure and process of handling sexual misconduct at the company, noting it must be "completely eradicated". All throughout the late 2010s, it was speculated that Orcel was to either succeed Ermotti as the chief executive of UBS, or go on to lead either MPS,Cassa Depositi e Prestiti, or UniCredit. Orcel was considered to be the "hit-by-the-bus" candidate to lead UBS–an executive who would assume the role of CEO should Ermotti suffer some serious injury.

Santander

In September 2018, Ana Botín announced that Orcel would lead Spanish commercial bank and financial services company Banco Santander as its chief executive officer (CEO), starting early 2019. Orcel formally left UBS on September 30, 2018. As Orcel left UBS, his employment contract included variable remuneration valued at $21.3 million (€18.5 million). In a signed letter by the Board, Santander agreed to buy out his contract, paying Orcel this remuneration as a part of his sign-on bonus with an agreed cap on deferred compensation.

On 15 January 2019, Grupo Santander Board announced that Andrea Orcel's appointment to the role of Group CEO would not proceed. At the time of offering Orcel with the role of Group CEO, the Board of Santander had agreed the terms of his annual remuneration in his future role at Santander, which were in line with that of José Antonio Álvarez.

José Antonio Álvarez, who has remained in the role since the announcement and his anticipated transition in March to Chairman of Santander Spain, will continue to serve in this role without change. Mr Orcel has filed a lawsuit against Santander to fulfill the agreed contract.

Management style

Orcel reportedly wakes up around 5:00 AM daily, often calling and sending emails to employees and subordinates during this time and past midnight. For his affection for dealmaking, Orcel has been dubbed the "Ronaldo of investment banking" (in reference to footballer Cristiano Ronaldo) Orcel's personality and management philosophy has been criticized for being high maintenance. In response to this criticism, he has stated that he was "not easy" and "demanding" but not willing to "ask for something I’m not doing myself." Multiple profiles of Orcel undertaken by the Financial Times describe him as 'voraciously competitive', capable of "[losing] his temper in a typical Italian way", Orcel has repeatedly stated that, due to the competitive nature of banking, one-in-four (25%) of mergers and acquisition (M&A) bankers do not make it past entry-level positions. He regularly holds annual off-site meetings in international locations away from London. After hosting an off-site meeting in Lisbon in 2013, he held a corporate retreat in Arizona a year later proclaiming: "If you can survive 45 degrees Celsius, rattlesnakes and the desert, we will win".

"Fiat is not the same as Audi, and Audi is not the same as Porsche, and Porsche is not the same as Ferrari. They are all in the auto industry, but they are addressing different markets and, depending on the dynamic in those segments, they are likely to do better or worse. The revenues are not the key determinant in terms of performance — ROE, or profitability, in terms of what is returned to shareholders, is a more significant measure of success."

Orcel, on the modern investment banking market, February 2017

Orcel frequently uses the Italian auto-manufacturer Ferrari to describe his affection for "focused" and "lean" execution of strategies as opposed to bigger, less versatile banks, i.e. as opposed to a Fiat automobile. He similarly uses European football to describe such strategies, referring to UBS as the "Croatia of investment banking" following the 2018 FIFA World Cup final. In June 2016, Orcel led an initiative where UBS bankers were granted two hours of "personal time" every week in order to boost work-life balances. On March 31, 2017, Orcel expressed his affection for shared parental leave and voiced his support for the growing movement in Europe to let fathers and mothers take extended time off of work to be with newly born and young children. In April 2018 Orcel issued an internal memo to UBS managing directors requiring that they hold 250 to 300 client meetings a year.

In May 2019 Orcel was featured In a “Lunch with the FT “ profile where he discussed his career, management style and family.

Personal life

While at Merrill Lynch and UBS, Orcel worked in their London offices, living in the Kensington district. He is married to Portuguese interior designer Clara Batalim-Orcel with whom he has one daughter. He married Batalim-Orcel in 2009, aged 46, after 16 years of dating.

A known polyglot, he speaks five European languages: Italian, French, English, German, and Spanish, fluently. He is also noted for his preference for silk Salvatore Ferragamo ties. Orcel's exercise regime includes high intensity running (HIR), weight training, and water skiing.

His younger brother, Riccardo, worked as an investment banker with Orcel at Merrill Lynch & Co. during the late 2000s. He was appointed deputy chief executive of VTB Bank in July 2013 and has occasionally worked with Andrea on mutual deals.

Career statistics

Dealmaking

This is a dynamic list and may never be able to satisfy particular standards for completeness. You can help by adding missing items with reliable sources.

As of market close 8 December 2018

Dealmaking by bank, fiscal year, and market value

Bank	FY	MKT	M&A							IPO / RO		Total Value ($B)
			Entity A	Entity B	Final Entity	Value ($B)	Acquirer	Target	Value ($B)	Issuer	Value ($B)
Merrill Lynch & Co.	1998–99	Bulge Bracket	Credito Italiano	UniCredito	UniCredit	25	–	–	–	–	–	25
	1999–00	Bulge Bracket	Banco Bilbao Vizcaya	Argentaria	BBVA	11	–	–	–	–	–	11
	2004–05	Bulge Bracket	–	–	–	–	Banco Santander	Abbey National	15.56	–	–	15.56
	2007–08	Bulge Bracket	–	–	–	–	Royal Bank of Scotland	ABN Amro	55	–	–	55
		Bulge Bracket	–	–	–	–	Banco Santander	Alliance & Leicester	1.6	–	–	1.6
	2008–09	Bulge Bracket	–	–	–	–	Monte dei Paschi	Banca Antonveneta	10	10% stake of VTB Bank	3.3	13.3
		Bulge Bracket	–	–	–	–	Banco Santander	Sovereign Bank	1.9	–	–	1.9
	Total					36	Total		84.06	Total	3.3	123.39
Bank of America Merrill Lynch	2011-12	Bulge Bracket	–	–	–	–	–	–	–	Rights offering: UniCredit	8.5	8.5
	Total					–	Total		–	Total	8.5	8.5
UBS	2016–17	Bulge Bracket	Vodafone's Dutch operations	Liberty Global's Dutch operations	Joint Venture	1.1	–	–	–	–	–	1.1
	2017–18	Bulge Bracket	–	–	–	–	HNA Group	10% stake in Deutsche Bank	2.8	–	–	2.8
	Total					1.1	Total		–	Total	–	3.9
Banco Santander	2019–20	Middle Market	–	–	–	–	–	–	–	–	–	–
Career total						37.1			82.16		11.8	135.76

Sign-ons

From	To	Position	Bonus ($M)	Bonus (€M)	Date	References
Merrill Lynch & Co.	Bank of America Merrill Lynch	Executive Chairman of the Investment Bank	$34.0	€29.0	2009
Bank of America Merrill Lynch	UBS	Investment Bank President	$26.2	€23.0	2012
UBS	Banco Santander	Chief Executive Officer (CEO)	$21.3	€18.5	2019

See also

• List of Sapienza University of Rome alumni
• List of INSEAD alumni
• List of former employees of Goldman Sachs