By Michael Shari
BEST INVESTMENT BANK
In a year when success in investment banking was defined by survival, Goldman Sachs gained market share by devising extraordinarily creative solutions for its clients in raising capital across asset classes and industries, according to Fred Cannon, director of research and head of equity strategy at KBW in New York. Many of its larger rivals, particularly Morgan Stanley, actually lost market share to Goldman last year.
In pulbic equity markets, Goldman raised $54.36 billion for its clients, climbing up a notch from second place last year, according to Dealogic, a capital markets research firm. Goldman also scored the biggest market share—8.6%, up from 7.6% in 2010. Goldman executed more equity deals that raised more than $1 billion each than any other bank in the world. Among its landmark deals last year were for those for AIG, Kinder Morgan, MetLife, Commerzbank, Continental, Samsonite, Prada and other clients. The bank served as the sole bookrunner in more equity deals than any other bank, raising a total of $14 billion for clients, the bank reported. In M&A, Goldman also hit the jackpot, landing in first place by all three measures—fees ($1.73 billion), number of deals (381), and deal value ($685 million)—according to Dealogic.
BEST EQUITY BANK
J.P. Morgan may not have devised the most creative of solutions to dodge bullets and steer around potholes in last year’s turbulent global equity markets, but it certainly did make judicious use of one of the strongest balance sheets on Wall Street to keep IPOs and follow-on equity deals on track for its clients, according to KBW’s Cannon.
As a result, the New York investment bank closed more public equity deals than any other bank in the world last year—a total of 271 IPOs and follow-ons, according to Dealogic. Among the largest was a $1.91 billion follow-on equity issue by Mosaic on September 23. To get complicated deals done in emerging markets during the darkest hours of the second half of last year, when few other banks were willing to take substantial risks, J.P. Morgan decided to partner with well-connected local banks as joint bookrunner.
BEST DEBT BANK
Bank of America Merrill Lynch
The synergies created by the merger of Bank of America and Merrill Lynch in late 2008 became apparent last year when the combined Wall Street behemoth underwrote more investment-grade corporate bonds in North America than any of the competitors. It was the lead bookrunner of six of the 10 largest dollar-denominated investment-grade bond issues—by Sanofi-Aventis, Verizon, GECC, Wal-Mart, Intel and Amgen. Of these, the most ambitious was the $6 billion issue by Amgen, which closed on November 7.
The bank did not shy away from the challenge of underwriting high-yield bonds, either. It played the important role of “lead left” bookrunner in at least one of every five of high-yield offerings in the US last year, including Chrysler Group’s $3.2 billion May bond issue.
It was lead bookrunner on the unique Ford Upgrade Exchange Linked Notes. Backed by auto loans, the $1.5 billion in high-yield debt is required to be exchanged for newly-issued senior unsecured notes if Ford receives an investment-grade rating from any two of three specified rating agencies—S&P, Moody’s and Fitch.
BEST M&A BANK
No other investment bank in the world came close to beating Goldman Sachs in mergers and acquisitions last year. The bank advised clients on no less than 381 deals that actually closed during calendar year 2011, more than any other bank. By deal value, Goldman’s share of the global and M&A market more than tripled last year from the year before, growing from 7.6% to an astounding 24.3%, according to Dealogic.
Goldman positioned itself at the top of the high-tech deal world last October—even as global markets had crumbled a couple of months earlier— when it joined hands with the deep-pocketed J.P. Morgan in advising Skype on its $8.5 billion sale to Microsoft. The bank also proved itself agile in many of the largest hostile and unsolicited M&A deals last year. In Australia, it advised Foster’s on an unsolicited bid from, and subsequent sale to, SABMiller for $11 billion in a controversial deal that was approved by the Australian government when global equity markets were near their nadir last November.
“The firm’s longstanding M&A leadership position demonstrates that clients have consistently hired us based on the quality of advice and execution expertise, particularly on some of the most complex transactions around the world,” says Gene Sykes, co-head of global M&A at Goldman Sachs.
Evercore showed the strongest performance of any midsize investment bank last year, expanding its European interests and its oil and gas business and forming a strategic partnership with Kotak Mahindra Capital of India, for cross-border M&A advisory services. Evercore was particularly successful in M&A, which is its core business, last year. It ranked in 16th place globally, advising clients on 73 deals worth $110.5 billion, according to Dealogic.
Tim LaLonde, global COO for investment banking at Evercore, the bank’s most successfully completed M&A transaction last year was Sanofi-Aventis’s $20.1 billion purchase of Genzyme. Evercore advised Sanofi-Aventis on the transaction, “and [it] looks to be a very successful outcome for our client,” he says. In equity capital markets, Evercore made history in Mexico last year by structuring the IPO of the country’s first-ever REIT for Fibra Uno.
Stifel Nicolaus Weisel
Stifel Nicolaus Weisel has grown deftly through the acquisitions of several small investment banks in the past couple of years, each of which was known for underwriting and advising in different industries. Based in St. Louis, Missouri, Stifel has rapidly built itself into an agile player in a range of industries from finance to technology, says Joel Jeffrey, an analyst at KBW in New York who covers midsize banks.
The landmark deal in Stifel’s growth-through-acquisition strategy was its $318 million acquisition of Thomas Weisel Partners Group, an investment bank in San Francisco that specialized in high-tech M&A in Silicon Valley. Not by coincidence, last year marked Stifel’s 16th year of record net revenues.
Braving political turmoil and civil wars in North Africa and the Middle East, Stifel served as the sole adviser to California electronics manufacturer Newport in its $230 million acquisition of Ophir Optronics, a laser manufacturer in Israel, on July 7.