Sponsors coverage in Australia

All the BBs except for maybe Barclays (they're here, but mainly sponsor a local EB). GS, UBS, and Macquarie are the top 3 here usually. Jefferies punches above its weight here due to a rockstar MD called Michael Stock, and some US MMs and Boutiques are here too, HL being fairly new and WB and Baird having partnerships with local boutiques.

I think the only thing i really missed in my initial comment was the participation of Superfunds in underwriting Syndicates (many invest principally through their PC arms) and the absence of any real other competitors in the PC space. Really the only “pure” major domestic Private Credit fund is Metrics, with the other PC operators being either Superfunds or JVs with overseas megafunds (for example Amicaa's Credit Fund is funded by Carlyle); or alternatively being fairly small.

Additionally, another seemingly domestically unique style of firm are debt advisors. Essentially these businesses (Skye Capital, Neu Capital, Trident Debt Capital Advisors, etc) exist to service LMM/MM sponsors and act as sort of a Capital Markets team for hire, basically negotiating terms on behalf of the sponsors. Their application is somewhat niche and only really eventuates where there’s the need to outsource negotiation of the debt stack or where the sponsor haven’t engaged a buy side team and are having the Investment Team run the M&A process. In most other cases, in my (somewhat limited experience) either the sponsor themselves will run the financing process, or the lawyers will (essentially) run it for them. As the community of LevFin lawyers in Australia is minuscule, with the market mostly being set by KWM, Ashurst and G+T, the firms tend to be better at knowing both what comp terms are and where the market’s at than these debt advisors, as well as having better relationships and credibility with lenders, as the general perception of a lot (not all) of the debt advisors, at least from a lender POV is that they are essentially bucket shops or unnecessary/annoying, and tend to pick fights to prove necessity of existence.

Something (somewhat tangentially related) that I alluded to in my comment above but didn't really explain was the existence of all of these "strategic partnerships" with overseas banks and funds, as opposed to the wholehearted entry of the foreign bank or fund into the domestic market, and the reasoning behind this kind of varies from instance to instance. One common thread that goes through pretty much all of them, however, is the need for "local expertise" given the kind of unique way Australia's economy functions, as well as geographic remoteness. This combines with another common factor - employee ownership, or effective ownership of the local operation through ring-fencing of profits - a trend that was started by Macquarie, continued by UBS until the demise of the Kangaroo deal and then replicated by Barrenjoey and to a lesser extent, Jarden. The logic goes, why would a top-tier banker - someone like Matt Grounds, for example - go to Goldman or MS as an MD and have his bonus determined by head office in the States, when he could determine his bonus, and more importantly, the bonus of his subordinates, more effectively himself. Essentially the only reason the local operations need a foreign backer or strategic partner, beyond branding is for balance sheet and syndication network access. It eventuates in a semi-symbiotic relationship - offshore bank gets a domestic presence without having to put in a whole lot of effort, domestic bank gets access to more substantial capital without needing to subject themselves to the regulatory quagmire of getting an ADI license or going through an IPO, everyone's happy. 

Another factor that's relevant here is the Big 4 commercial banks's reluctance to enter into Investment Banking, or more precisely, their reluctance to enter into M&A. As I sort of touched on earlier, each of the Big 4 have an Institutional Banking arm, which predominantly operate in and focus on DCM and Coverage, as that's where they've got a comparative advantage. Really the only traditional Investment Banking teams at the Big 4 are the LevFin, Syndicate and Securitisation teams. Unlike in Europe, where IBs and CBs have traditionally been together under the same roof, or in the US, where they all sort of amalgamated following the overthrow of Glass-Steagall, Aussie Commercial Banks have never really had close relationships with IBs. Sure, there have been sporadic deviations from this, for example where ANZ and WBC briefly built M&A teams before folding them shortly after, but for the most part the separation between CB and IB has been fairly persistent, which has contributed to this.