league tables

The $13.25 billion acquisition of Electronic Data Systems by Hewlett-Packard—the ninth largest tech deal ever, according to DealLogic—has moved the M&A league table standings, DealJournal Heidi Moore reports. Before the deal was announced, Goldman Sachs and Morgan Stanley led this year’s ranking from advising technology companies on mergers. But neither bank has a role in the H-P deal, pushing them down in the rankings
“Goldman ranked first with $14 billion of announced deals to its credit this year, and Morgan Stanley ranked second with $11 billion according to investment-banking research provider Dealogic,” Moore writes. “But now, Goldman is in third place, displaced by Lehman Brothers and J.P. Morgan. Lehman has jumped from fifth to first place with $17 billion of deals to its credit, while J.P. Morgan — which, just yesterday, languished in seventh place with only about $2.2 billion of tech deals to its credit — has vaulted to second place in the rankings from seventh place. Morgan Stanley has fallen to No. 5.”
Citigroup and Evercore Partners advised Electronic Data on the deal. J.P. Morgan Chase and Lehman Brothers advised Hewlett-Packard.
Hewlett-Packard: The Advisers [Deal Journal]

  • 27 Jun 2007 at 12:30 PM
  • Banks

The Yankees analogy still applies to Goldman

arod_varitek.jpg JPMorgan has reversed the curse, and pulled into the top spot of the European I-Banking League Tables for the first half of 2007. JPMorgan was boosted by its strong performance in ECM, which commanded the second highest combined market share in ECM, trailing Deutsche Bank. The League Tables measure the combined market share of M&A, ECM and DCM. Citi was the only bank to finish in the top four in all three categories, and is 2nd in the League Table to JPMorgan.
Goldman, the Yankees of the financial world, remain much like the Yankees this year, sitting in a distant fifth place behind JPMorgan, Citi, UBS and Deutsche Bank (or 11 games out of first place). Goldman is quick to mention its top spot in European M&A, and high team OBP. Goldman has advised on $401bn worth of European transactions so far this year.
Spurred by megadeals like UniCredit/Capitalia, Enel & Acciona/Endesa, KKR/Alliance Boots, Reuters/Thomson and the ABN Amro bidding war between Barclays and RBS, deal volume in Europe has reached $1.3 trillion, and is expected to exceed last year’s record of $1.5 trillion.
JP Morgan leads in investment banking [Financial News via Dow Jones]

League Table Gamesmanship

Dennis Berman—one of the Deal Journal boys—breaks into the real paper with a big article revealing one of the worst-kept secrets on Wall Street—the league tables are a “farce,” as Berman puts it.
Berman describes how investment banks game the league tables, and push for deal credit on deals in which they played only the most minor roles. His term for it is “grubbing”–a term more familiar to DealBreaker from our days as a philosophy teaching assistant, when we were constantly accosted by not-so-bright young things who believed their essays on Aristotle deserved higher marks than their work merited.
The article describes the mess that happened after Altria announced plans to spin off Kraft Foods for $61 billion earlier this year. Originally, two advisors were named: Lehman Brothers and Centerview Partners. Over the next few weeks the banks piled on in various roles. When all was said and done the list of advisors read like a yellow-pages of investment banks. JP Morgan Chase, Credit Suisse, Citigroup, Deutsche Bank, Goldman Sachs and Morgan Stanley all had titles, roles and, importantly, shots at getting league table credit for the huge deal.
Banks care about the league tables even though they don’t necessarily reflect things like actual fees paid.They are used as ways to recruit young, up-and-coming bankers who may have opportunities to work at a variety of Wall Street firms. They provide a way for banks to keep score, to measure their competitiveness with rival institutions. Most importantly, they’re used to pitch deals to clients, who the banks hope will be impressed by high rankings.
But the gamesmanship that has evolved in getting—or “grubbing”—league table credit maybe undermining their purpose, according to Berman.

It all may seem like a silly game — until you realize the grubfests have the effect of trivializing the very advice for which investment banks are charging millions of dollars.
“Clients laugh about league tables,” says Herald L. Ritch, formerly mergers chief at Donaldson, Lufkin & Jenrette and now president of Sagent Advisors. “Everyone comes in and says they’re No. 1 in the world in everything. It’s a stupid way to run a business, and because it makes a bunch of grown-ups look silly to their clients, it’s not helpful.”

The video above has more discussion from Berman himself about the league table grub game.
Gaming the Game: How Street Plays The ‘League Tables’ [Wall Street Journal]

  • 30 Mar 2007 at 12:47 PM
  • Banks

League Table Porn: Goldman Tops US M&A Advisers

deforest.jpgFewer transactions but bigger numbers in the US mergers and acquisitions market means the battle for league table placement in the quarter just ending was especially hard fought.
Goldman Sachswas the top adviser for US mergers, according to the research firm Dealogic, boosted by its role in the huge TXU buyout offer. It was followed by Morgan Stanley and JP Morgan Chase. While Dealogic’s tallies aren’t viewed as important as those assembled by Thompson Financial, you can bet there is some back patting and grinning over at Goldman this morning.
And maybe, just maybe, Lloyd Blankfein put a little extra sugar in his Styrofoam coffee cup this morning.*
*This whole Lloyd loves the Styrofoam thing was, as far as we can tell, made up by Bess Levin. Factual accounts of how Bankfein takes his coffee—if at all—are always welcome. Goldman could not immediately comment on this matter when contacted this morning.

Merger market unfazed by market volatility

  • 03 Jan 2007 at 2:39 PM
  • Banks

League Table Porn: Goldman Is King

DealBook has the official Thomson Financial league table results for Global M&A, with Goldman just edging out Citigroup for total deal volume:

After giving us a preview late last year, Thomson Financial this week sent DealBook its official tally of last year’s merger and acquisitions activity. Global M&A topped $3.8 trillion in 2006, a bump of nearly 38 percent over the previous year. Nearly 20 percent of the year’s deals involved private-equity buyers. And large swaths of the deal-making were handled by two investment banks, Goldman Sachs and Citigroup
[Cutting tired bonus news rehash] In the year-end league tables — the rankings scrutinized and boasted about by investment bankers — Goldman Sachs took the crown for advising on the largest volume of global announced deals. It advised on $1.09 trillion in deals, for a 28.6 percent market share. Perhaps more surprising was last year’s showing by Citigroup, which leaped from fifth place in 2005 to second last year. Citigroup advised on $1.03 trillion in transactions, claiming a 27.2 percent market share, Thomson Financial said.
Citigroup’s gap with Goldman Sachs narrowed in the last two weeks of the year: A previous DealBook item noted
that as of Dec. 20, Citi had a total deal volume of $987 billion, by Thomson’s count.

Goldman, Citi Top List of 2006 M&A Deal Makers [DealBook]

  • 21 Dec 2006 at 9:03 AM
  • Citicorp

M&A League Table Cage Match

Thompson Financial published the M&A league tables yesterday, just on the heels of the bonus mania for the past couple of weeks. Outsiders may not appreciate just how seriously the investment banks take these rankings. Seriously enough to ignite a vicious fight and engage in all sorts of chicanery in an attempt to get big deals counted toward their ranking.
From the New York Post:

A squabble is erupting among the giant Wall Street banks over which one should rightfully hold the No. 1 spot in their league of deal-making this year.
Just as the formal rankings were revealed yesterday by data outfit Thomson Financial, putting Goldman Sachs on top with nearly $1.049 trillion in deals – just barely ahead of Citigroup’s $1.021 trillion – officials at Citigroup were said to have contacted Thomson by letter to cry foul.
Citigroup complained that the rankings failed to include a major piece of a Citigroup deal in Europe involving Statoil ASA’s $30 billion acquisition of Norsk Hydro ASA’s energy assets.
That particular piece of the Hydro deal, combined with other possible uncounted advisory fees, could likely boost Citigroup past Goldman Sachs for the top spot, according to a report in the Financial Times.

Deals & More Deals
[New York Post]