“The markets have certainly been patchy … Clearly we have seen a decrease in M&A volumes to, really, pre-COVID levels. But also, deals that have taken place have taken longer and have been harder to complete,” said Sean Miller, head of investment banking at RBC Capital Markets.
Announced M&A totalled $US104 billion, almost 20 per cent less than 2022, and the lowest in terms of deal value since 2020’s $94 billion. Bank of America surged from 20th in 2022 to No. 1 in M&A, thanks to 16 announced deals, including advising Newmont on its $26 billion takeover of Newcrest.
League tables – compiled by LSEG (formerly Refinitiv) and Dealogic – are often a point of contention for the investment banking community. They sometimes miss private deals, and can be cut to suit banks’ strengths, or geography, when they pitch for business. One big transaction can also skew a league table in favour of an inactive bank in Australia, particularly amid a down year for deal making.
Centerview Partners, for example, advised Newmont on its $26 billion acquisition of Newcrest, which closed in October. That one transaction helped lift Centerview to fourth place in 2023 from 47th a year earlier, LSEG data found. BofA’s work with Newmont also helped it top the table for announced M&A, but it did not crack the top 10 for overall investment banking fees.
In equity capital markets, UBS retained first place after raising more than $US3 billion for companies across 19 transactions. Despite a year with only one institutionally sized initial public offering, ECM volumes hit $17.7 billion in Australia and New Zealand, just 8 per cent lower than 2022.
“The challenge … with rates rising, fixed income has become more attractive. The relative attractiveness of equities versus fixed income has been a key debate among investors. To the extent that rates start plateauing, or potentially come down, then the relative attractiveness of equities may start to improve, which we’ve started to see,” Matthew Beggs, UBS’ head of ECM, said.
Broker dealers shine
The meek IPO market, meanwhile, meant equity markets were propelled by swift equity raisings and block trades, among other transactions. While these transactions do not win the big fees, and headlines, that an institutionally sized IPO can, they all provide league table credit.
“The last time we saw such low IPO issuance was in 2011 and 2012,” said Sarah Rennie, co-chief executive at Jarden’s investment bank.
UBS, JPMorgan, Macquarie, Goldman Sachs and Barrenjoey cornered much of the year’s block business, including a $263 million deal for CSL in July and a $145 million raise for Origin Energy in August.
Mining, resources and energy companies, including Delta Lithium and Peninsula Energy, however, relied on firms like Canaccord Genuity, Euroz Hartleys, Shaw and Partners and Bell Financial last year for their capital-raising needs. These brokers cobbled together enough business to post strong ECM league table ranks amid the dearth of IPOs.
Canaccord was fourth from third a year ago, Bell fell one place to seventh, and Euroz improved to sixth from 11th in 2022, LSEG data showed.
Ms Rennie, whose team worked on a $151 million equity offering for 29Metals, expected issuers to focus on size and the composition of their share registry to ensure that any equity raisings next year will succeed.
