After five years of self-imposed exile, former Barclays head Bob Diamond is returning to London with plans to launch an investment banking boutique. It is a blueprint being pursued by his erstwhile rival, former Credit Suisse CEO Brady Dougan. 

Almost exactly five years ago, Barclays boss Bob Diamond tripped over the Libor rate-rigging scandal. His exit was accompanied by the words of then-chancellor George Osborne, who said the decision was «right for Barclays and right for the country».

The rate-rigging scandal was costly both for Diamond and for Barclays: the British bank was forced to pay a $450 million fine for being involved in a ring including Swiss bank UBS and other firms.

Now Diamond has resurfaced, ironically one day before his old nemesis Osborne, ousted in the wake of the Brexit vote, emerged as the editor of the «Evening Standard» on Friday.

Traditional City Brand

The American investment banker is taking over the Panmure Gordon, a venerable City of London stockbroker founded in 1876, together with a Qatari investment bank.

The 65-year-old Diamond, who took home more than £100 million during his tenure at Barclays, is acquiring Panmure for 19 million Swiss francs through Atlas Mara, his investment vehicle. Diamond's Qatari investors, QInvest, will hold 43 percent of deal.

Bigger, Better

Diamond wants to use Panmure Gordon's prestigious brand to «build a larger, successful boutique investment bank» according to an announcement on Friday.

It is his second acquisition in short order: it emerged last month that Diamond is taking over Greek lender Credicom from France's Credit Agricole. The plan? Transform the bank into a vehicle to invest in Greek firms. 

Dougan vs Diamond

The move is reminiscent of former Credit Suisse boss Brady Dougan, who is reviving his investment banking career. Dougan, who was blindsided by being replaced by Tidjane Thiam nearly two years ago, is founding a merchant bank this year for principal investments and investment banking and trading, including proprietary buying and selling.

Like Diamond, Dougan has successfully tapped the Qatari spigot: the former Swiss banker's venture is backed by $3 billion in money from wealthy Middle Eastern families and governments – as well as Dougan's own ample funds.

Seek the Niche

Why are investment banking boutiques popping up? The reasons lie in the financial crisis: to avoid a repeat, regulators heaped on capital requirements for trading and financing activities – making them far more expensive. This has given rise to specialized houses which focus on activities, like advice-giving, which don't soak up huge amounts of capital or tie up balance sheets.

Former Morgan Stanley and Merrill Lynch & Co investment banker Marcel Franzen, who founded Franzen & Company in Zurich two years ago, is a local example.