I didn't see this on WSO so I figured we could start a discussion around it. Moelis & Co has apparently been chosen to be the adviser for Saudi Aramco in its IPO.
For those that are in Investment Banking or have knowledge of this I have some questions:
1.) What are the roles of JP Morgan and Michael Klein if Moelis is the exclusive adviser for this IPO? Are they simply the underwriters for this transaction?
2.) I understand investment banking is all about relationships but what do you think Moelis offered that other banks didn't in order to win this advisory role?
3.) Why would Saudi Aramco choose one adviser instead of a combination? Is it to keep workflow streamlined and avoid confusion?
Moelis will advise on who they should use as underwriters during the process. JPM will likely be underwriting a large portion of the offering
Moelis likely positioned themselves as being free of conflict of interest in terms of being able to advise on the sale as they don't use their own balance sheet (to my knowledge) so they can provide the best pure advice in terms of how to go about the transaction.
-In my opinion they probably won because in the arab world, certain aspects of finance are different such as the idea of interest being a taboo...so potentially Moelis, being free of that conflict of interest in terms of trying to get Aramco to offer (and then subsequently underwrite) a bigger stake was a very attractive selling point.
Your guess is as good as mine, they maybe just hit it off with Moelis.
Ken Moelis = Goat
You are overthinking it. Saudi Aramco didn't pick Moelis because it offered anything special or better that other BBs/Lazard couldn't offer. They picked Moelis because their lead decision maker really likes the lead relationship banker at Moelis (they likely have known each other from way back).
IB services are relatively commoditized - business is won by whichever bank/banker you trust more
Moelis' past experience with Dubai World (state owned), Drydocks (subsidiary of DW) and some UAE pe funds gives him a leg up regarding his understanding of the financial/political crossover in the region. He's kind of known for being able to handle eccentric or atypical personalities well and knows the region already
My bad, meant to SB you.
I gave him an SB and you a MS to even things out
AndyLouis , can we space out the MS/ SB icons a bit? Like maybe put them on different ends?
Truth. How do you handle eccentrics/royalties or quasi royalties like Trump or a Saudi royal ? I feel Moelis, Jared or Banon might have a few lessons to teach us. I Personally struggle with unreasonable feisty types.
I'm in the same boat as you. Gut reaction is to play to the ego, but I think that's short sighted, because at some point you run the risk of upsetting them if a reality check is absolutely necessary and you throw it in their face out of the blue. I'm willing to bet part of it has to do with understanding the ecosystem and the perspective of more than just the eccentric individual, but the people around him/her. I think also staying insanely consistent helps - the borderline unreasonable types need to feel secure and stable above all else, and that builds trust, even if they don't always love to hear what you're saying. Just my two cents.
Brown nose. Brown nose. Brown nose. They don't care about your thoughts. Make them feel like your ideas are really their ideas.
In Banon's case, it's taking advantage of your boss's weaknesses/shortcomings (of which there are many).
But M. Klein has done work for Aramco, too...
JPM/MK will be doing the heavy lifting on underwriting, management presentations, roadshows, regulatory role as applicable. Moelis will be running the process, overseeing the entire thing and advising management / government on the process, decision making etc. as well as keeping the bookrunners honest.
Moelis & Company awarded Saudi Aramco IPO. (Originally Posted: 02/09/2017)
So, this week news got out that Moelis & Co. are going to participate in the IPO of Saudi Aramco, the Saudi national oil company. This would be one of the largest transactions the firm has worked on in the region. What do you think? Does Moelis have enough pull to contribute its fair share in raising capital? I know it's a small shop in Dubai, would people from other countries be supporting them?
They're only advising on the IPO. Other banks (JPM, MS, HSBC and others) are going to be the underwriters. In terms of manpower, they will definitely have help from the teams in London/US.
Apparently Evercore has been awarded the IPO mandate as well (together with Moelis)
https://www.bloomberg.com/news/articles/2017-03-09/aramco-said-to-pick-…
Setting up an office in Dubai too Source: Evercore Plans Dubai Office, Hiring Amid Aramco IPO Talks, Bloomberg
Moelis may start killing it outside the US
Moelis Picks Up Aramco Advisory Role (Originally Posted: 02/08/2017)
Big news this morning when MoCo beat out EVR for the advisory slot on the imminent Aramco IPO. Anyone have a take on this one?
I'm also interested in knowing what the exact roles would be for Klein, JPM and Moelis, and how the fee split would look like.
Was wondering the same thing, Klein is working on the government side, so I would imagine a tamer fee, but Moelis should pick up a nice chunk of change regardless of how much they have to give to the book runners.
Got to think their Middle East connections came through once again -- after the Dubai World RX I figured they had some ties to the region, but this really confirms it.
Who got the Saudi Aramco mandate? (Originally Posted: 04/01/2016)
Can't find the advisor online. Announced today that the IPO is official
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