How does ER add value to IBD? | SVB Leerink Acquires MoffettNathanson
I saw on Bloomberg this morning that SVB Leerink has acquired tech equity research firm MoffettNathanson. I don't quite understand how acquiring an equity research firm adds value to a bank's Investment Banking division? Especially when we are talking about a boutique such as SVBL.
They do equity research for HC as well so assuming they are expanding that into tech to correspond with them expanding their new Tech IB group.
In theory, it helps for ECM (especially on less big-name offerings) because the company can IPO and get research coverage immediately, pretty much always with a buy rating. Banks often bring this up in a pitch that they have ER in the relevant sector. Has gotten a bit messier recently with the “wall” between ER and banking, but would be curious if anyone has ever seen a bank do an IPO then put a bad rating on the stock…
bump
Other teams besides bankers generate revenue FYI. Moffet is also THE best tech research shop.
MN is bar none the BEST media & telecom research firm (Swinburne at MS being a somewhat distant second). Beefing up ER can help cross sell IB and ER services to clients / potential clients. Especially in an IPO scenario, as others mentioned.
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