Xavier Rolet: The tenure of the London Stock Exchange dealmaker in chief comes to an end

 
Jasper Jolly
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New chief executive of the London Stock
Xavier Rolet joined the LSE board in March 2009 (Source: Getty)

Life can be tough at the top, but Xavier Rolet has made it look easy, serving for more than eight years as chief executive of the London Stock Exchange (LSE) Group.

During that time he has been widely credited with transforming the company, stemming a slow decline and guiding it through a succession of daring – sometimes too daring – acquisitions which made it a financial powerhouse at the centre of the global financial system.

Early stand-out deals from Rolet in his time at the LSE included the acquisition of iconic UK index firm FTSE International, and Turquoise, a trading platform. But the purchases which have truly gained the admiration of analysts throughout the City were the Frank Russell Company and the London Clearing House, making it a global player in indices and clearing.

Read more: BoE's Carney says he can't see Rolet continuing as LSE boss

The successes made Rolet one of the top 100 chief executives in the world this year, according to the Harvard Business Review. Yet along with the successes and a consequent surge in the firm’s share price, Rolet’s relationship with the board and its latest chairman deteriorated. City sources say it had become dysfunctional by the end, before activist investor Sir Chris Hohn lifted the lid on tensions which had simmered for months.

An unlikely beginning

Rolet’s path to the centre of the City began in an unusual place: Algeria. His father, a member of the French military, was dispatched there to try to keep a hold of the former colony in its violent struggle for independence. The effort failed, and eventually the Rolets ended up in Sarcelles, a banlieue on the northern outskirts of Paris marked in recent years by riots.

Observers would have been hard-pressed to guess Rolet’s future at the start of the 1980s as well, when he served as a second lieutenant in the French Air Force Academy. That proved to be a stepping stone to Columbia University in 1981, before gaining an MBA.

Read more: Investor warns LSE board against "character assassination" of boss Rolet

After that, however, it was plain sailing into the world of high finance, starting with one of its biggest names. Rolet joined Goldman Sachs in 1984, learning the ropes of international arbitrage from Robert Rubin, later a US Treasury secretary.

Goldman was the start of a long roll call of big investment banks for Rolet: Credit Suisse First Boston, followed by Dresdner Kleinwort Benson, where he was global head of risk and trading.

Rolet then joined Lehman Brothers at the turn of the millennium, where he became chief executive of its French operations. He joined the LSE board six months after the ill-fated US bank collapsed, and became chief executive on 20 May 2009.

The endgame

After the flurry of successful deals which Rolet secured, the beginning of the end came during the failed merger with Deutsche Boerse. The deal, which would have created a European exchange giant, was eventually blocked on competition grounds, although political concerns, particularly around Brexit, were also mooted to be in the mix.

As part of the deal Rolet had agreed to step down, but once the European Commission blocked the tie-up he reversed course, staying on. That decision clearly did not go down well with the board and its chairman, Donald Brydon, and the LSE announced Rolet would step down on 19 October.

Read more: Plot to save stock exchange boss Xavier Rolet risks triggering a messy exit

No reasons were given at first, but the actions of Hohn gradually exposed tensions for all the City to see, culminating in the exit of both Brydon, albeit at a later point, and Rolet.

With Rolet’s tenure at the London Stock Exchange officially at an end, there are few positions left of the same stature – although some City insiders whisper about the potential for a move into the likes of the International Monetary Fund or the World Bank.

Rolet spent much of his last day as LSE boss retweeting praise for a lifetime achievement award given last night, with exquisite timing, by an industry magazine. He dedicated the award to his LSE colleagues.

For now, the avid beekeeper and oenophile will finally be able to sit back and relax with a glass of the wine grown at the French estate run by his wife, Nicole. Luckily, he revealed yesterday on Twitter, the “2017 vintage will be small but excellent apparently”.

Read more: The chief executive of the London Stock Exchange Group is stepping down

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