GS Healthcare NYC
Anyone has updated thoughts/opinions on GS Healthcare and how it compares to other groups at GS and top groups at other BBs in terms of placement and culture? Are exit opps limited to the healthcare group at PE firms? Thanks
I think Levy and Rymer are still great, but from speaking to people at CVP. Mark Robinson in particular has done a stellar job of transforming CVP into the top sell-side healthcare bank. Examples: AveXis to Novartis, Kite Pharma to Gilead The CVP team is doing significantly more sell-sides than buy-sides (Mark Robinsons' area of expertise) hence you see him on a lot of deals.
This is pretty interesting as in Life Sciences, these sell-side mandates are usually awarded to the firms that underwrote the company's equity offerings (makes sense as the M&A assignment is the reward for long periods of consistent coverage). You'll still see a balance sheet bank on these assignments along with CVP (i.e. AveXis also used GS and Kite used Cowen and Jefferies), but CVP is displacing someone by convincing these companies to forsake a long-term relationship in favor of their M&A "expertise".
Then again, maybe they aren't displacing anyone and are just convincing companies to split the fee that would otherwise all go to the balance sheet bank in which case, I'd love to know how these guys are combating that.
It's honestly pretty incredible. CVP has really established itself as an incredible trusted advisor for biotech companies. Speaking with an MD there, I learned that CVP is by far the leader in sell-side healthcare deals. Some of the relationships are being newly built off their past track record, and some based on legacy connections. Take for example, AveXis. The CEO at AveXis, Sean Nolan, was also the CBO at InterMune which was sold in 2014 to Roche for $8.3 billion (InterMune was also advised by Centerview).
I'd say CVP is really displacing other companies because of their "expertise". They only get paid based on M&A transactions. In the case of AveXis, the MD with the relationship shared that Nolan was interested in selling 2 years ago, but was advised not to after seeing what bids came in. CVP really tries to pitch their value aka the fact that aren't incentivized to push M&A and get financing (where big banks are really making their moolah). They are okay with long-term relationships (which are getting built with these biotech companies at practically the start-up stage). Is CVP truly so much better? No clue, but they are winning.
This is pretty incredible insight. However, over the LTM CVP has been on the sell-side for 9 HC M&A transactions whereas JPM has been on 19 (did a quick CapIQ search). Maybe if you look at fees or among boutiques only, they are the "leader" but I still think they're well behind the JPM HC franchise.
Your point about them being LESS motivated to push M&A than the BB's because of financing fees is definitely valid but, at the end of the day, they are definitely still bankers trying to push M&A. If you get a chance, give this read....
http://fortune.com/go/finance/carl-icahn-blocked-xerox-merger-fujifilm/
The CVP banker, David Hess, undoubtedly knew that the deal the Xerox CEO was pushing was bad for shareholders yet CVP proposed and were executing on the structure anyway. So CVP's schtick that they're not pushing M&A is not as universal as they're marketing would suggest.
Ultimately, I don't believe M&A is rocket science and there is little discernible difference between the value that one (industry focused) M&A advisor provides over another. What differentiates bankers is their efforts to build long-term relationships with clients which is facilitated by offering underwriting, research coverage, etc. That Mark Robinson displaced the Jefferies or BAML HC team (both of whom worked on multiple equity offerings for AveXis) because he is supposedly so much better at sell-side M&A is frustrating and bad for banking because it results in a consolidation of "attractive" advisory assignments (and all the benefits that come with it) among older, entrenched bankers whom almost certainly did not work as hard for the company as the younger bankers at Jefferies or BAML on multiple offerings over long periods of time.