Lazard, Rothschild and GHL also "exist" here, however none are particularly prominent in M&A, albeit with the caveat that the former two have really good years and then nonexistent years, whilst the latter has been in decline in line with it's american mothership's global performance. Evercore also have a presence here through Luminis Partners, which is essentially the same model that Barrenjoey have with Barclays iirc (correct me if I'm wrong) - i.e. the local EB operates "in partnership with" their overseas backer, with deal credit being split between the local and overseas entities depending on which league table provider you're looking at (for example, refinitiv credit Barclays instead of B*, etc.)I'm not sure who Baird are partnered with down under - I know WB have a strategic partnership with Allier Capital. 

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Sponsor Coverage in Australia is a bit of an interesting one because of the way LevFin has traditionally worked down here, with the Big 4 Commercial Banks having far and above the biggest share of the market as it relates to underwriting and originating, with IBs mostly relegated to advisory roles for structuring. Even in the case of sell-side staple financing packages, the majority of these are done in partnership with a commercial bank as financier rather than through the M&A advisor's own LevFin team. This isn't to say that IBs don't exist at all in Aussie LevFin - the majority of contested take-privates and hostile takeovers exist outside of the CB's risk parameters (mainly due to reputational risk) and as such are typically underwritten by IBs initially, after which point they either go for a quicker than usual refi to include the CBs in the debt stack, or try to syndicate on a shorter timetable. This also isn't to say that this isn't subject to change - only one of the Big 4 CBs (CBA) is trying to build their LevFin platform at the moment, with NAB recycling capital from their Institutional Bank and ANZ/WBC putting less of a focus on LevFin. Private Credit is emerging, as it has done elsewhere, and some IBs (like Jefferies), are making inroads into the market. Additionally, 2018 brought the birth of the AUD-denominated TLB, meaning that less Australian sponsors have to go offshore to access the TLB market, which may necessitate growth in the area, however this has yet to be seen due to the comatose state of the TLB market internationally. Unis have also recently appeared in the market, which will shake things up. 

As it's been explained to me previously, the principal reason as to why this is the case historically is because most of the international BBs don't have a large domestic balance sheet, and have been reluctant to phone up head office to request capital, particularly where there's the time pressure involved and the risk that head office will say no. You don't want to have to tell a sponsor that your underwriting commitment is conditional upon whatever byzantine internal process is involved in getting approval from head office. Also, deal size for Australian sponsors is relatively small - MM is between ~30mm and ~250mm, and large cap being considered anything bigger than that. CS was an exception to this because of their huge private bank and their global integrated sponsors platform, however with the HNW PB outflows in the past few years, the loss of Mr Stock and the outward intentions of UBS towards expanding their IB and LevFin, it doesn't look like the enlarged UBS will continue this. UBS were also historically an exception because of the Australian Branch's relative strength to the rest of the world and the "kangaroo deal", however that's long since gone now. I can't speak on where Macquarie sits in all of this other than to say that their M&A team is strong, they have a big balance sheet and they appear to have a LevFin team, albeit I'm not sure how strong or focussed they are on this. 

Basically, to make a long story short, unlike in other markets, Australia's Sponsor Coverage market is split in two between Advisory and Financing, with some participating in both, but with this being the exception rather than the rule. 


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. 


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