Moelis / Cantor: the buck stops here

Eric Cantor spent $168,000 in steakhouses during his most recent campaign. He lost, but has found another occupation where fine dining figures prominently. On Monday the boutique investment bank Moelis & Co. announced that Mr Cantor, the former Republican majority leader in the US House of Representatives, would join Moelis as vice-chairman and board member. Mr Cantor was expected to end up on Wall Street (technically, he is starting in Moelis’ Washington office) as he worked on financial matters in Congress. Less clear is whether Mr Cantor’s skills and connections are best used at a boutique bank.

Wall Street faces regulatory challenges, from capital rules to pressure to jettison risky businesses. Someone with Mr Cantor’s knowledge of legislative process and players is well-positioned to influence banking rules. Yet boutique firms such as Moelis simply dispense advice. Their pitch to clients and shareholders is built on freedom from conflicts of interest. Surely a bank that combines advisory work with capital markets and retail banking would have made a better destination?

Dealmaking is also a relationship business. But Mr Cantor is an imperfect fit here as well. He lacks experience on corporate boards. He lost a primary challenge to an unknown. The policy agenda that he spearheaded brought Congressional Republicans an approval rating of 19 per cent. That is the CV of a skilled partisan, not a smooth deal-broker.

In only five years, founder Ken Moelis has built a firm that, after a run-up of 50 per cent since its IPO in April, has a market cap of $2bn. But this move looks more like vanity than pragmatism.

Still, Wall Street remains a “show me” business. Mr Cantor is young and smart. His initial pay is a modest few million. If he’s worth more, he’ll be paid like it.

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