M&A Advisors and the New World Order
There’s been a lot written recently about the impact of the downturn on the rankings of the major M&A advisors: much has been made of the drop of Goldman Sachs from the premier position to be overtaken by JP Morgan and Morgan Stanley, and the appearance of Evercore Partners in the top 10 (really in their case on the back of credit for one deal — albeit the largest of the first quarter — where they advised the pharmaceutical giant Wyeth in its $64.5 billion acquisition of Pfizer; overall Evercore only did three deals in the quarter versus UBS’ 44 who were in the position just above them in the league table).
Is it really a new world order of M&A advisors, or just ‘business as usual’? I think the latter.
Of course, one quarter does not a year make. But a number of analysts have noted that the firms who have taken large sums of government money (Bank of America Merrill Lynch and Citigroup) went down in the league tables: yet note that they didn’t drop much and are still firmly in the top 5. Credit Suisse had a nice increase of two spots, but otherwise the list looks pretty much the same as it always does.
Nevertheless, there are lots of reports of banker poaching. Again, what these reports seem to ignore is that this is ALWAYS the time of the year when people move — after bonuses are paid (even if this year the bonus season was missing). In fact, I would suggest that the poaching of bankers from one firm to another is not necessarily a sign of lack-of-health at some firms and vigour at others, but more a sign that the entire M&A market is beginning to stabilise, with perhaps signs of the long-awaited uptick.
Particular note has been made of departures at Merrill Lynch following its acquisition by Bank of America. But put this in perspective, too. Go back almost 10 years to the acquisition of Bankers Trust (with it’s M&A crown jewel of Alex Brown) and look at the news reports of people departing after the acquisition by Deutsche Bank. Yet Deutsche is today solidly amongst the top 10 M&A advisors consistently.
Intelligent Mergers 
But 10 years ago the M&A market was on the upswing, today it all but dead. Doesn’t that make a difference in the outlook and outcomes we’ll see from topday’s activites?
George Schaefer
Wednesday, 15 April 2009
Ah, but the markets aren’t really all that dead (see my posting on the first quarter volumes). I still think that things are more like the past than the press makes it out to be.
Scott Moeller
Wednesday, 15 April 2009