INVESTMENT BANK OF THE YEAR | The Shortlist day 3
This hasn’t been the easiest of times for investment banks but there are signs that deal activity, at least, is picking up to more normal levels. We have chosen JP Morgan because, as ever, it has shown itself to be strongly placed in most markets. Bank of America Merrill Lynch is something of a recovery story. It is fast moving on from the traumas of the early days of its ownership by Bank of America. Barclays Capital is a relative newcomer on the equities front, while Evercore and the evergreen Goldman complete the list.
JP MORGAN CAZENOVE
JP Morgan has had a bumper year for M&A, pulling off AT&T’s $39bn acquisition of T-Mobile USA, in part through a $20bn unsecured bridge loan – the largest single one of its kind in the bank’s history.
The bank has also advised Sanofi Aventis on its $7bn yankee bond issuance, one of the biggest pharma transactions ever, and GDF Suez in its €300m bond sale.
And JP Morgan took a spot on the opposite side to Goldman on the $23.4bn merger of International Power and GDF Suez. It also helped FTSE 100 miner BHP Billiton in its $45bn capital-raising to fund its bid for Potash Corp. The acquisition was scuppered by protectionist Canadian authorities, but it was nonetheless the bank’s biggest financing job since 2008.
GOLDMAN SACHS
After a deceptively slow start to the year, Goldman confounded its rivals by keeping its place at the top of the league tables for M&A services, advising on transactions worth $679bn globally.
It has taken on some of the most complex deals and restructuring jobs in the industry including spin-offs by Fiat, Motorola and ArcelorMittal as well as Vodafone’s purchase of a 33 per cent stake in Vodafone Essar and GDF Suez’s acquisition of a controlling stake in International Power. The bank’s UK brokerages business is benefiting from recent changes at the top, gaining FTSE 100 tech giant Autonomy and FTSE 250 builder Balfour Beatty as clients in just the last week. Other wins seem likely.
EVERCORE
The investment banking boutique Evercore has had an eventful and successful year.
Recently it paid £86m to buy the advisory firm Lexicon and it raised funds by way of a $155m share issue.
It has mandates on a number of high profile mergers and acquisitions deals, such as advising Nasdaq on its joint bid with ICE for control of the NYSE and AT&T in its bid for T- Mobile US.
In the UK, stars such as Bernard Taylor have helped push the European business forwards, advising the Qataris on their investment in Hochtief and Lafarge on its joint venture with Anglo American.
The bank is growing fast and has big ambitions, with some expecting another acquisition soon.
BARCLAYS CAPITAL
Since hiring Jim Renwick as head of UK equity capital markets and corporate broking in April 2009, Barclays Capital has won 14 clients from a standing start, which is why it makes it into our list this year.
Renwick, formerly of UBS, must take a lot of the plaudits for this but it has to be said that the bank, which is not a traditional broking firm but wants to become one, will also be benefiting from the strong lending relationships it already has with clients.
Its client list includes Barclays, National Grid, Resolution and the new British Airways owner IAG.
The bank has also been picking up an increasing amount of UK transactions work, including leading on the £900m IPO of Justice Holdings, the largest blind pool vehicle ever listed. In 2010 the bank moved up from 14th to 2nd in the UK M&A table.
BANK OF AMERICA/MERRILL LYNCH
Deals in Bank of America/Merrill Lynch’s European financial institutions group (FIG) have been coming thick and fast, with the bank winning mandates to advise on some of the region’s biggest capital-raisings, including rights issues for Deutsche Bank (€10.2bn), Commerzbank ($6.1bn), Danske Bank ($3.8bn) and the $3.3bn privatisation of Russia’s flagship investment bank VTB.
That’s in addition to non-FIG mega-deals such as book-running for Glencore’s float and a role advising Porsche on its $7.2bn capital-raising.
The bank’s volume of deals and its expertise in new instruments like contingent convertibles has made it the go-to adviser for capital-raisings and seen a boost in M&A mandates as well, such as advising on Santander’s $5.4bn purchase of Bank Zachodni, National Bank of Greece’s $4bn acquisition of Alpha Bank and VTB’s $3.5bn deal to buy the Bank of Moscow.