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Streetwise Blair Fleming leaves RBC’s U.S. capital markets unit

The sudden departure of the man credited with spearheading an ambitious expansion of Royal Bank of Canada’s U.S. investment banking arm puts the broker’s future in the hands of a new crop of leaders.

A short memo circulated to staff on Monday afternoon announced Blair Fleming “has left RBC” but provided no explanation. A spokesperson confirmed he is no longer with the bank.

Mr. Fleming’s departure clears the way for new co-heads to assume command of RBC Dominion Securities Inc.’s U.S. capital markets business, which employs about 3,000 people. A separate memo also sent out Monday announced that Jim Wolfe, head of leverage, and Matthew Stopnik, currently co-head of financial sponsors, will take over U.S. investment banking and will report to Derek Neldner – a rising star at the bank who was also promoted on Monday.

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Mr. Fleming was a key figure inside RBC’s New York-based investment bank throughout a 10-year period in which the bank worked to diversify its strengths, becoming less reliant on business from the energy sector and focusing more on industries such as retail, media and technology.

RBC’s push into the U.S. investment-banking business began in 2000 with the acquisition of Dain Rauscher, a technology and health care-focused investment bank. At the time, it was a challenge for the Canadian company to compete with U.S. and European conglomerates, but the 2008 financial crisis provided an opportunity. With its clean balance sheet, RBC was able to provide loans and hire talent away from firms such as JPMorgan Chase & Co. and Lehman Brothers. Today, nearly half of the head count for RBC’s capital-markets arm is in the United States.

More recently, RBC’s capital markets arm has benefited from referrals from City National Bank, the Los Angeles-based lender RBC acquired in 2015, which has deep ties with commercial customers in sectors such as entertainment, biotech and legal services.

“The U.S. is strategically important to RBC, and our commitment to our clients and employees in this priority region remains steadfast,” said Doug McGregor, group head of RBC’s capital markets division, in the company memo. “I’m confident in the strength and depth of our leadership team.”

Mr. Fleming’s career spanned more than 30 years at RBC. Starting in 1986 in London, Ont., he rose through the ranks, holding a number of different roles at the bank and its capital markets division. In 2009, he took over as the head of RBC’s U.S. investment banking division, and in 2014 he was promoted to lead the bank’s entire U.S. capital markets business, based in New York, where he lives with his wife and four daughters.

In an interview with The Globe and Mail last June, Mr. Fleming outlined plans for RBC to grab a larger slice of a hyper-competitive U.S. fee pool worth US$40-billion, boosting the bank’s market share from 3.5 per cent in 2017 to 4.5 per cent within three years. “Slipping back is not an option,” he said at the time. “It’s a very competitive Street.”

The U.S. business now reports to Mr. Neldner, who steps into a role that gives him global responsibility for investment banking, reporting to Mr. McGregor. Industry speculation has pegged Mr. Neldner as a leading candidate to one day be named group head of capital markets at RBC.

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Mr. Neldner most recently served as head of Canadian and Asia Pacific investment banking, and he has more than two decades of investment banking experience at RBC, including roles in corporate finance, debt and equity financing, and mergers and acquisitions. He spent a decade in Calgary heading up the firm’s Canadian energy investment banking business and before that worked in equity capital markets in Toronto.

“We have a strong leadership pipeline, and are committed to our people and to delivering on our strategic priorities,” Mr. McGregor said in the second memo outlining Monday’s promotions.

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