Latin Finance - July 2008 - (Page 12)

investment banking outlook The senior investment banker, who another – which means you’re really producer CND, loans led to sizable bond spent a large part of his career running plugged in to the global trends and have business in the form of takeouts and the shop’s US telecom business, really good contact with the global buybacks. characterizes his 170-person Brazil players – then even if you don’t have a But aside from a fully staffed DCM operation as a broad-based securities big balance sheet, you can have an team, few of Citi’s other investment business. Charlie Stewart, a well known banking lines have truly benefited from a impact on that industry,” says Sigal. US banker, has been tapped to head Morgan Stanley and Goldman Sachs regional retail and lending presence. The Brazil investment banking from São have recently reorganized their shop is seen as having missed an Paulo. opportunity to build up in Brazil Harland acknowledges a equities at the start of this decade, M&A Rank by Fees, Year to June 15 formidable set of local and Swiss leaving Credit Suisse and UBS to Credit Suisse and Citi out in front competitors in Brazil, but is not reap the rewards. Meanwhile, convinced they have done a perfect job balance sheet commitment is being Rank Bank Revenue $m % share for investors and issuers. “We’re going tested by hundreds of billions of 1 Credit Suisse 51.25 21.79 to be focused on quality companies, dollars in losses and asset 2 Citi 44.21 18.80 because that creates a virtuous circle. writedowns since the start of 2007. 3 UBS 16.97 7.22 Investors make money, corporates get Citi, whose stock has fallen more 4 Goldman Sachs 16.41 6.98 their capital and they can go fund than 60% since the beginning of 5 Merrill Lynch 12.12 5.15 again and they have repeat access to 2007, is heard to have been a less Subtotal 191.33 81.37 the market. I think there were some aggressive deal pitcher this year. Total 235.14 100.00 deals done in 2007 that investors Management also opted to sell down Source: Dealogic probably regret,” says Harland. regional exposure, including a large Indeed, of the IPOs led by Credit book of syndicated loans and equity Suisse and UBS in Brazil since stakes in companies like Redecard, Core IB* Rank by Fees, Year to June 15 January of 2007, only 33% were according to market sources. Credit Suisse dominates overall trading above their issue price as of Nonetheless, the shop has scored Rank Bank Revenue $m % share mid-June 2008, according to a smattering of follow-on equity 1 Credit Suisse 109.23 17.77 Dealogic. But Morgan Stanley has a deals that temporarily put it at the 2 Citi 72.63 11.82 long way to go before it can put itself top of the regional league tables this 3 UBS 68.18 11.09 on the same shelf as top Brazilian year. Citi’s loan business is also 4 Banco Itaú 50.52 8.22 equity shops. picking up and it has closed 5 JPMorgan 46.05 7.49 Its only notable equity mandate transactions for Brazil’s Gerdau and 26.61 4.33 6 Merrill Lynch in Brazil so far this year has been a Scotiabank’s Peru unit. Those two 7 Santander 20.69 3.37 co-lead role on the IPO of Le Lis lines of business helped make the 8 HSBC 18.92 3.08 Blanc. It was 11% below issue price shop’s LatAm business the second 9 Goldman Sachs 18.30 2.98 in mid-June after having come at a most profitable in the region, 10 Morgan Stanley 16.75 2.73 steep discount to the originally according to Dealogic. Subtotal 447.88 72.86 targeted range. And the loss of two Meanwhile, Royal Bank of Total 614.72 100.00 senior LatAm executives in June put Scotland (RBS) seeks to build a full the strategy further in question. service shop for the region, *Includes fees earned from debt and equity underwriting and M&A Like Morgan Stanley, Goldman capitalizing on what it got from the advisory work Sachs, which has also just recently ABN acquisition. “Quite a lot of Source: Dealogic placed a senior US banker at the people have entered and they have helm of its LatAm business, shares exited again, but we will be there for the view that rewarding investors is a long time,” claims Juan Carlos key. “We’re very interested in building a Garcia Centeno, head of LatAm for RBS. leadership in the region, placing senior franchise so we want issuers and US bankers in charge. Regionally, the investors to be happy with the result. It’s pair has seen a steady flow of individual Brains to Battle Brawn critical to keep that balance,” says hires and transfers of talent, particularly Despite this influx of European lenders Kennedy. “Our long term ambition is to and US-based money center banks, there into Brazil. “In Brazil the competitive opportunity be the top firm [in Brazil.] But there are is still room for premium ideas from some very strong indigenous firms too.” traditional investment banks. In Brazil in is still wide open,” says Christopher Goldman has been focused on Harland, who was tapped earlier this particular, pure-play investment banks fleshing out its local team. It moved year to head Morgan Stanley’s LatAm see an opportunity to replicate a model business. “We’re trying to capture market veteran US banker Andy Rabin from that has succeeded in Europe and Asia. Dallas to São Paulo, naming him COO of “Brazil is becoming very global. If you share in Brazil that’s consistent with our Brazil investment banking. He will be global market share but that’s not going have a world class global investment covering financial sponsors and to be at the expense of quality.” banking practice in one industry or 12 LATINFINANCE July/August 2008

Table of Contents Feed for the Digital Edition of Latin Finance - July 2008

Latin Finance - July 2008 Contents Investment Banking Outlook Compensation Survey Colombia Investment Banking Borrowers vs. Investors Banorte Profile Braskem Financing Strategy Brazil Hydro Finance Peru Port Privatization Panama Money Flows Argentina Local Markets Guide to Banking Technology Who Said That?

Latin Finance - July 2008

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