JPM Cazenove tie-up created a force to be reckoned with
WHEN US investment bank JP Morgan struck a deal to buy out half of Cazenove back in November 2004, many in the City felt it would be the beginning of the end, with the Queen’s stockbroker losing its reputation as a consummately professional independent dealmaker.
In fact, quite the opposite has proved the case; despite rumblings about a culture clash between the conservative Cazenovers and their brasher American counterparts, the joint venture has gone from strength to strength, causing the competition to quiver in their boots.
JPMorgan Cazenove has been involved with virtually every high-profile City deal of the past few years. It advised Barclays on last year’s lucrative acquisition of the US operations of failed Lehman Brothers, and has blazed a trail this year on some of the largest rights issues the London market has ever seen, including
HSBC, Rio Tinto – where its chairman Sir David Mayhew is a director – and now Lloyds Banking Group’s planned £13.5bn rights issue.
Its dominance in corporate broking remains unchallenged, with the latest figures showing it advises 36 FTSE 100 clients, five more than either UBS or Merrill Lynch in joint second place.
Last year, JPMorgan Cazenove posted pre-tax profits of £134.5m, a fall of just 15 per cent on 2007 in one of the toughest years on record. And this year, after a bumper crop of deals, the the firm expects to do even better.
With such golden prospects, is it any wonder JP Morgan is keen to crystallise its involvement before February’s deadline?