Merrill Lynch's head of private equity and research, Tom Davis, has resigned but will stay with the firm until 1 November.
The long-standing Merrills man – Davis joined the firm 25 years ago – has not revealed what he intends to do next but the move comes as no surprise to some within the firm who felt that he was disappointed not to win the succession race with Stan O'Neal to become the new president of the firm.
Although Davis' appointment eight months ago was heralded as an indication of the investment bank's renewed commitment to private equity, it remained unclear how this strategy was going to unfold. Said a source close to the bank, 'Tom is a very able guy but Merrills had run in then run out of private equity to the extent that this new declaration of intent was viewed with some scepticism: and I'm not sure Tom was convinced himself.'
The other factor that some are inevitably pointing to is the current scrutiny of the objectivity and credibility of investment bank research that was led first by New York State Attorney General Eliot Spitzer and now by the SEC as well. Merrills has already been under Spitzer's microscope for the past 11 months. The bank's chairman and CEO, David Komansky, was keen to make clear in an internal memo to staff that Davis' departure had no connection with this investigation.
Davis will now help find a replacement to cover each or both of his roles whilst advising on research policy and its application.