Barclays Capital - M&A advisory?
Can someone clarify something please. I was under the impression that BarCap did not do M&A advisory until I went onto there website and saw the following..
Investment Banking Division is split into
- Investment Banking
- Debt Capital Markets
- corporate finance and Risk Advisory
Investment Banking
Our banking structure provides clients access to bankers with industry specific and geographic expertise across all investment banking products. Industry specific groups cover diversified industrials, energy, utilities, infrastructure, mining, real estate, retail, financial institutions, telecom, media and technology.
What is the role mentioned above (investment banking) in traditional terms?
My understanding is that they outsource M&A advisory
they took a lot of the M&A bankers from ABN AMRO to build out their platform in the UK. they are a global bank, but domestically (US), I acknowledge them as financiers in transactions not advisors.
They may have done advisory work in the US that I am not aware of..
But I know more and more they are expanding their platform to do the advisory work by poaching bankers from troubled US banks.
they are adding m&a bankers (lateral hires)
Barclays = Ticking time bomb
So if there adding/poaching M&A bankers, do they have an M&A division, or perhaps there looking to start one soon?
"The future belongs to those who prepare for it today" - Malcolm X
ticking time bomb??? what do you mean?
http://brontecapital.blogspot.com/2008/06/Barclays-strange-stranger-and-truly.html
Long post but it sums it up well. Some of the groups within the bank might be great, but just be mindful of the exposure the bank has. As the blogger notes...
Barclays may be “too big to fail” but it is also probably “too big to bail out”.
Key passages:
Barclays decided to become a debt trading investment house. About half of its profits now come from the sort of activity that Lehman does. This market is hostile to pure debt trading investment houses.
Barclays did not buy an investment bank. There were persistent rumors that they would buy Lehman – but it never happened. The way that they built the bank was to steal whole teams from lots of investment banks – offering what investment bankers respond best to – lots of filthy lucre.
One year they put on a thousand staff at over 250 thousand pounds average salary. That seemed like an aggressive hiring spree to me. The next year they doubled it and I think (but cannot confirm) they continued to expand on this pace. This is a lot of cost base to add to a retail bank with declining margins.[Many have guaranteed bonuses so the costs don't go away as the market slows]
[Their] total [2007] gross derivative exposure is 29 trillion pounds. The gross credit swaps are 2.4 trillion pounds – but mysteriously the fair values (both assets and liabilities) are low.
In four years derivative exposure (total face) has gone from 5.9 trillion pounds to 29.2 trillion pounds. Credit derivative exposures have gone from 43 billion pounds to 2.4 trillion pounds. (I keep needing to watch myself when I type this. I am not use to this many zeros – and I deal in Japanese banks which account in yen.) Anyway this is about 50% annualized growth - reflective of the great Barcap hiring spree.
You have 3.8 billion pounds of “trading income” and only 42 million pounds of “value at risk”. The balance sheet however – and this is ON BALANCE SHEET exposure is a mere 840 billion pounds. That is about the same size as the whole of Citigroup! In the income statement they took a net 795 million pounds of charges against US subprime exposure. That is 19 times their value at risk.
Barclays held - and continues to hold lots of nasty stuff. Their marks on the super-senior CDOs are implying only a fraction of the problems at Ambac or AIG. How do I put it? When is it mark to model and when is it mark to myth?
They got the true subprime thing happening here. They own Equifirst - a true subprime lender. Or at least it was a true subprime lender - it now does FHA loans and the like. They purchased in March 2007 when it was early in distress. They got a few billion pounds of loans with the acqusition that they meant to securitise if the market reopened. Oops.
they are looking to start one soon. hiring senior bankers from ML/UBS/BCS left and right. for now, their IBD is mostly debt capital market and capital structure advisory stuff.
i'm actually interning there in London and can tell you that they hired about 40 m&A bankers from ABN AMRO who are starting on Monday and transferred about 10 bankers of various ranks into the M&A team. It will focus primarily on Emerging Markets since they do not want to try competing with the BB's or Boutiques in traditional M&A. However Barclay IBanking has primarily been focused on the Debt Side where they are one of the Top 5 in the world in nearly every debt product out there (based on Thompson League Tables).
They are truely just financers in the US, but I can see one of the large UK banks buying up one of the large independent brokers and building out their global investment banking platform. The economics work out easily, it's all about raising the capital to complete the transaction.
Appreciate the replies guys.
So I just read the BarCap press releases in this month, and in June they have included an energy investment banking team in Houston and built a healthcare investment banking team in New York.
Still unsure what these industry sector teams do? Do they work on raising Debt for specific transactions within the industry.. e.g. there natural resources investment banking team will help Xstrata raise debt for the Lonmin takeover?
"The future belongs to those who prepare for it today" - Malcolm X
Wingman, that link is interesting but it doesn't take into account the bank's most recent earnings report.
The most recent earnings report is not going to change my opinion that Barclays is a ticking time bomb.
http://dealbook.blogs.nytimes.com/2008/09/24/paulson-bets-big-against-b…
Excerpt:
John Paulson’s hedge fund emerged Tuesday as the biggest short seller of British banks, The Financial Times reported, citing filings made under a new regulatory regime.
Mr. Paulson, whose historic bet against the housing market that earned him more than $3 billion last year, has shorted four of the U.K.’s five biggest banks, the newspaper said, citing the filings.
Mr Paulson, the founder of Paulson & Company, has bet against four of the five biggest British banks, according to filings made under a new regulatory regime on Tuesday. Among his positions are a 350 million pound bet against shares in Barclays; a 292 million pound bet against Royal Bank of Scotland; and 260 million pound bet against Lloyds TSB, according to the newspaper.
This Thread is meaningless, use the damn search function.
http://modernyuppie.blogspot.com/ The musings and antics of a Meathead college wrestler turned asset backed securities trader.
What type of work/valuation is done in DCM/financing M&A in general?
"The future belongs to those who prepare for it today" - Malcolm X
To the OP,
Thread is fairly outdated now as they do M&A advisory given the Lehman N.A. operations acquisition.
They are advisers on the $944mm AT&T-Centennial; on the $11.6bn CenturyTel-Embarq deal; and they were advising Exelon on its $6.2bn unsolicited bid for NRG Energy.
Appreciate the quick response.. don't they offer M&A advisory in US only? So in UK they still offer IBD and DCM together. There website is quite confusing, since they say they have industry groups in IBD and list the industries, but no mention of M&A... it just goes on to talk about DCM...
http://www.barcap.com/sites/v/index.jsp?vgnextoid=0e4f15cd3f4f8010VgnVC…
The more i read there website the more confused i get!
I'm applying for London position btw
"The future belongs to those who prepare for it today" - Malcolm X
Well Barclays poached ABN's M&A team back in May; They hired 5 senior bankers along with their team of 40 bankers, so they have been expanding their advisory services in Europe as well.
http://www.barcap.com/sites/v/index.jsp?vgnextoid=2bdb15cd3f4f8010VgnVC…
They mention "Mergers & Acquisitions" here.
Any update as to how their European M&A operations are doing? Are they winning any deals?
Weak, second-tier. Look at historical tables on CapIQ.
I wonder about future prospects for them in Europe?
Who knows? In Europe, UBS CS, MS dominate.
I just have seen that they have been hiring top guys like mad lately...I wonder how long it takes for a bank to start stealing market share...?
I don't really know the answer, but I know that Barclays (pre-lehman), had almost NO investment banking activity in Europe. Literally it's deal volume was that of a boutique. They are still considered 2nd/3rd tier in Europe, primarily bc Barclays is known as an asset management firm (one of the most prestigeous in Europe).
My guess is that it would take 5 years for them to change their position. My 2c...
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