Panmure Liberum: Two City brokers merge into new investment bank led by Rich Ricci – with Bob Diamond providing the financing

Panmure Gordon and Liberum are set to merge as Panmure Liberum, with former Barclays chief and now Panmure chief exec Rich Ricci set to lead the new, combined investment bank, according to reports

Two of the City’s leading brokers have struck a deal to merge today to create the UK’s largest investment bank focused on smaller and mid-sized listed firms.

Panmure Gordon and Liberum are to merge as Panmure Liberum, with former Barclays chief and now Panmure chief exec Rich Ricci set to lead the new, combined investment bank, the two firms confirmed this morning.

The deal was first reported last night by Sky News’ Mark Kleinman.

The City has been gripped with talk of consolidations between the Square Mile’s brokers, with Finncap and Cenkos consummating their own tie-up in September as the newly formed Cavendish. Deutsche Bank also bought Numis, in a surprise move which strengthened the German outfit’s presence in the Square Mile.

Investment banks have been hit hard by the significant slowdown in London equity markets and the sharp spike in interest rates.

The tie-up between will create a consolidated firm with some 250 quoted clients and would rank the firm as the biggest bank for IPOs under £1bn over the past five years, taking the two brokers’ records together.

“In Panmure Liberum, we are combining two highly complementary and culturally aligned businesses and creating a new force in UK Investment Banking with an exciting long-term future,” said Rich Ricci, who will head the firm. “We have long admired the impressive track record that Liberum has built in its 16-year history and we now look forward to building on that momentum together.”

It is understood Panmure and Liberum have been in talks for months, with initial reports in the Sunday Times.

“Competition [for clients] is not a bad thing, but it’s going to be brutally competitive right now. It’s hard work to win mandates and win deals,” says Neil Shah, head of research, at investment analysis firm Edison.

“It feels like there’s too much capacity out there. I do see the possibility of more M&A activity, more consolidation in the space.”