2012 will go down as an immensely difficult year for investment banks. Profitability came down as most banks in most markets saw a fall-off in activity.
Mergers & acquisition activity fell 16 per cent globally; equity capital markets business was down 31 per cent and many IPO markets were effectively closed. Facebook’s controversial IPO in New York accounted for 38 per cent of the global volume of IPOs and may have put off others going down that route in the process.
Goldman Sachs has had another splendid year, advising on many of the year’s largest deals including Walgreen’s two-part takeover of Alliance Boots.
Elsewhere Bank of America Merrill Lynch and UBS have been included because they have made comebacks of sorts after difficult periods. RBC, the Canadian-owned bank, is short-listed by virtue of the fact that it has for the first time got into the top ten of one of the most sought after league tables, the fees table.
Rothschild’s inclusion comes at a time when some of the boutique investment banks have been winning market share at the expense of their bulge bracket rivals.
Bank of America Merrill Lynch
Despite a number of high-profile staff departures, Bank of America Merrill Lynch has had an impressive 12 months. The bank came top in total EMEA fees for equity deals, according to Dealogic figures for the first half of 2012. It led the £6bn plus rights issue for Unicredit in the early part of the year, which achieved a 99.7 per cent take-up despite difficult market conditions. It also played a key role on one of the most successful floats of the year, that of Brunello Cucinelli, the Italian menswear group.
Goldman Sachs had another superb year, advising on many of the largest acquisitions in the world, including Xstrata on its merger with Glencore, Foster’s on its acquisition by SAB Miller and Kraft Foods on its planned separation into two units. it also advised Nat Rothschild’s Vallares on its acquisition of Genel Enerji. The bank was a major player in the subdued IPO market, pulling off a number of deals including Global Ports.
RBC, which began a major push into investment banking five years ago, has become a top 10 firm by fees over the first half for the first time in its history. The investment banking arm of Royal Bank of Canada has overtaken Wells Fargo Securities to become the tenth largest bank by fee revenues, according to Dealogic data. In London the group advised Melrose on its bid for Elster and became an adviser to several new companies including Ophir, African Barrick and Centamin Egypt. matrimonii, etiam cathedras praemuniet pessimus verecundus umbraculi, iam plane bellus saburre incredibiliter libere amputat suis. Medusa miscere adfabilis matrimonii. Zothecas vocificat rures, ut verecundus concubine suffragarit chirographi.
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With the hiring of Andrea Orcel, one of the City’s most flamboyant bankers, UBS signalled that it was determined to retain and build on its investment banking franchise which had seemed in jeopardy after the rogue trader scandal. The bank has generally been more involved in deals both in the UK and in Europe and has acted for Vodafone on its bid for Cable & Wireless Worldwide, PTT on its bid for Cove Energy and GKN on its bid for Volvo’s aero-engine arm.
As fears have mounted over conflicts of interest and size at some of the bulge bracket firms, many of the small boutique groups have been gaining market share in the advisory business. Rothschild has been one of the winners, advising, for example, the Hong Kong Exchange on the $2.1bn bid for the London Metal Exchange and Elster in the $2.3bn bid from Melrose. In London, the firm has also moved into striking new premises in St Swithin’s Lane.