Best Leveraged Finance or Sponsors Groups

iamshortgod:

Rank the top 5 lev fin shops...

1.DB 2.CS(Sponsors) 3.JPM 4.ML 5.GS

Disagree with ML, they're only somewhere on the map with HCA and Tribune, and I'd put GS at 4 since they do very well in the 2nd lien space. I'd put either Citi of BofA at the 5 spot.

iamshortgod:

anyone have a link to the lev fin league tables?

For Bank + Bond:

Should be something like: JPM BAS Citi CS DB

Now you might be wondering why everyone dogs JPM, BAS, and Citi, it's because a lot of those deals that put them up there are corporate deals. While corporate deals are still valuable in fees and experience, they're not as prestigious or painful as sponsor-backed deals. I don't have league tables for sponsor-led bank + bond deals, but I think it would look like:

JPM CS DB BAS Citi

I've heard good things about CS, BAML, and DB sponsors groups. I have friends who did their SA earlier this year at the CS and BAML sponsors groups and they said there was pretty solid dealflow. This is just based off of my limited exposure, so I'm welcome to corrections.

Edit: Here's a comment from a previous post that could provide a little more information, it was posted back in September 2012

ycuzimnyce:

BAML and CS are still definitely the best in the US. JP does very well but I heard the modeling is done out of SLF.

US Loan Syndications - Sponsor Backed - Bookrunner - FY 2011
($ in Millions)
Rank Bank Volume No. of Deals MarketShare 1 Bank of America Merrill Lynch $42,091 196 14% 2 Credit Suisse 35,375 94 12% 3 JP Morgan 26,221 99 9% 4 Barclays Bank Plc 25,805 92 9% 5 Wells Fargo & Company 21,185 137 7% 6 Citi 19,382 50 7% 7 Deutsche Bank 19,272 73 7% 8 Goldman Sachs & Company 16,787 43 6% 9 Morgan Stanley 13,261 35 5% 10 General Electric Capital Corporation13,197 155 5% 11 RBC Capital Markets 9,013 41 3% 12 UBS AG 6,717 32 2%

Source: Thomson Reuters

They all seem to be fairly competitive because at the end of the day sponsors aren't that discriminate in who they get their financing from. Maybe they use the same couple of banks that they have good relationships with a lot, but they'll still pick the banks offering the best terms and rotate things around to keep everyone happy.

BAML and JPM do a lot just because they have the balance sheet to throw their weight around. CS's sponsors group has a great reputation. DB seems to pop up on a lot of deals, probably to do with the strength of their FICC business. UBS Sponsors is a better group than the league tables above would suggest.

At the end of the day it's less about league table position and more about whether or not that bank's Sponsors group does the modeling. If you are in a Sponsors group that doesn't model you probably just spend all your time pitching and negotiating term sheets with sponsors.

No one cares about league tables except the MDs who have bonuses directly correlated to their P&L.

For an analyst, "best" means exit ops. And for exit ops, go for GS/MS first and then CS/JPM. Rest of the sponsors groups go by typical bank rankings.

CS

always thought MS was killing it in sponsors.

1. JPMorgan
2. Credit Suisse

do a search, man....CS MS.

CS sponsors

I imagine that in the future the pure play investment banks (MS, GS, LEH) will have more difficulty financing larger deals. As banks are being forced to keep more transactions on their balance sheet (SIVs, CLOs, CDOs) their ability to lend is being constrained. Full service banks that have low cost of funds due to deposits will be at an advantage. However, I don't think anyone knows how badly damaged the PE industry is (as a couple major defaults could change the entire landscape) and when (if ever) it will return to its heyday.

These are my thoughts and I know they don't answer your question

Adjacent to Prince's topic I'm watching to see how the GSO/Blackstone story pans out.  LevFin looks ripe for disintermediation in middle market buyouts.  GSO had a deep DLJ/Drexel heritage and relatively recently put together a ~500m subordinated financing package with Farallon for the Goodman Global deal.  It looks like the sponsors -- Hellman and Friedman and GE -- secured over half of the financing from Barclays but apparently placed the rest directly to GSO and Farallon without a bridge or a bank intermediary.  See the press release below.  Deal Journal also mentioned this deal and disintermediation a little while back.  However, I haven't seen much fresh discussion on GSO and disintermediation since Blackstone acquired GSO.

-

http://www.goodmanglobal.com/phoenix.zhtml?c=192905&p=irol-newsArticle&ID=1065495&highlight=

Although to be honest, it's really tough to rank them numerically, especially with those groups.  In general the large, full-service banks do tend to dominate because their balance sheets have traditionally been much bigger than the likes of GS/MS etc.

It will be interesting to see how Goldman does in the wake of all the credit problems and them escaping relatively intact - I know they have been focusing more and more on middle-market deals with the mega-LBO market effectively gone now.  They may end up having an advantage even over the full-service banks, though, when the market comes back and other places are still understaffed.

Not sure how you could ignore CS LevFin given that you've ranked Sponsors #1.  The strength of a Sponsors group also relies in the ability of the LevFin/Syndication groups to sell the loans (thereby allowing the Sponsors group, and bank in general, to pursue more leveraged deals).

Further, in 2007, CS had won 4 awards as best LevFin house (from credible sources, eg. IFR) and has consistently ranked at the top of the high yield / leveraged loan league tables (yeah, yeah, so league table can be fooled).

Either you forgot about CS LevFin, you were careless, or you just don't know...

JPM Lev fin, hands down. CS sponsors, hands down.

You are right, I was just careless. I should of put CS LevFin up there at the top or near the top.

The Prince of Wall Street

http://www.princeofwallstreet.com

I can't figure out if this is serious or not. (I'm beginning to feel this way about a lot of posts here.)

Assuming this is serious: Sponsors groups are coverage groups for PE. They had light hours and no stress because there was little or nothing to do this (and last) summer. When the PE market starts to heat back up, you can assume these guys will be busy. That said, the exit opps out of Sponsors to PE are pretty good.

Also those first years got jobs because they had some deal experience when the market was ok. Assuming you're talking about the analyst class of '07.

Class of '08 and '09 has and will have limited deal experience.

my understanding from other analysts is that they get jobs because of connections of senior bankers...not so much for deal flow/experience. Hence why many of analysts were interviewing with tops firms starting in nov/dec of their first year...merely a few months after training.

...thus the question i was asking, is whether or not this is true of most sponsors groups across all banks (that people get attractive exit opps because of connections, less so because of deal flow), or just perhaps the lucky few who happen to know the the right people during the right market conditions? If a bank has a dedicated sponsors group, is that generally your best way to get P/E opps or does nothing beat solid M&A experience??

It also really depends on the bank itself. WIth some banks, FS is PURELY a coverage group that ends up syndicating modeling and execution to the lev fin team. If this is the case then hours will be better and exit opps will still be on par due to the relationships that have been built. Banking is still banking, so I doubt it's a "resort" but what the OP described doesn't seem too farfetched.

you have to be careful of bb's that have finspon and LevFin teams separately. finspon is usually coverage/origination and levfin is usually execution/syndication.

ms and CS finspon are great. modeling done in house and analysts place very well. attrition in both the bb's finspon groups, but still one of the best out there for pe placement. before the merger, Merrill's finspon acted almost like a product group. did all their own modeling except for landmark m&a transactions. post merger, finspon acts like a hybrid group - coverage/product. don't know much about the group post merger, but you can form your own opinions.

during the summer, m&a and ipo markets were nearly dead. pe's had no way to exit their portfolio companies. the market for raising fund capital was even more dead. so, finspon were prob pitching a whole lot - might as well call them the baseball team. now that the ipo markets are back, finspon will probably be one of the busiest groups (btw, ecm is a great place to be esp in these markets). m&a is getting there, but not like the ipo market.

if you're in ms, cs or merrill's finspon and are top bucket, you're pretty set to get into the pe shop of your choice.

Bump

What about associates in top PE placement groups? Do associates at GS TMT, MS M&A, or CS LevFin in the top bucket ever have a chance getting into a megafund PE shop?

Also, sponsors is good for PE at some banks and not so good at others. if you are at a bank where the sponsors group also handles the lev fin work for the sponsor client (i.e., the sponsors group does all the modeling and technical work), that is good for PE. Megafunds want people with technical skills who can model well and have excellent understandings of accounting and finance. If you are at a bank where sponsors only does coverage and the technical work is done by a separate lev fin group or by the industry group, that is not good.

Also, it is better if sponsors is considered a top group at whichever bank you are at. Top groups at a given bank usually attracts the best and brightest analysts from the bank's general pool and those analysts then get more deal flow and more experience because their group is good and gets more business from clients.