Financial News
Jason Corcoran in Moscow
09 June 2009
Peter Westin, head of Russian strategy at JP Morgan, has left the bank and is believed to be rejoining Aton Capital, the Moscow-based group that has been hiring aggressively in its bid to relaunch as a full-service investment bank.
Westin, one of the best-regarded analysts in Moscow, had previously worked with Aton, which is relaunching after the original business was sold to Italy’s Unicredit in July 2007 for $424m (€306.5m).
A source at JP Morgan confirmed Westin had left the company and said his role was being covered temporarily by its Russian head of research Alex Kantarovich.
Swedish national Westin was part of a group of 20 bankers poached by JP Morgan from Russia’s MDM Bank almost two years ago.
Westin had previously worked for Aton, joining in 2001 as a senior economist. He had worked as chief analyst at the Stockholm Institute for Transition Economics, where he was responsible for monitoring macroeconomic developments in Russia.
Aton, which is hiring up to 50 staff for its equity brokerage, declined to comment although two sources close to the company indicated Westin had joined its new business.
A growing recovery in Russia’s capital markets is leading to a renewal in hiring with VTB Capital leading the way. Financial News revealed yesterday that VTB had hired a team of sales and traders from rival Troika.
Separately, Russian bank UralSib said it had hired Gareth Johnson as head of trading from Alfa Capital.
Showing posts with label JP Morgan. Show all posts
Showing posts with label JP Morgan. Show all posts
Friday, 19 June 2009
Sunday, 17 May 2009
JP Morgan names Russia investment banking chief
Financial News
Jason Corcoran in Moscow
15 May 2009
Jeffrey Costello, chief executive of JP Morgan in Russia, has taken over as head of investment banking in Moscow following the surprise departure of Natalia Tsukanova to take up a role as an adviser to the Kremlin.
JP Morgan said Costello had taken over Tsukanova’s duties temporarily following her departure last month to advise the Russian government on it foreign acquisition plans.
Investment banking sources said Tsukanova had been tapped by Igor Sechin, deputy prime minister and energy giant Rosneft chairman, to advise the government on foreign acquisitions in the oil and gas sector.
“Tsukanova was with JP for 12 years and wanted to try something new. This was an offer she felt she couldn’t refuse,” said a banker close to the situation.
A Moscow spokeswoman for JP Morgan said Costello was taking over until a suitable replacement could be found. It was too early to say whether internal or external candidates will be sought.
Tsukanova’s investment banking team has had a good run over the past few years. Its bankers acted as joint bookrunner on the $10.7bn (€7.9bn) flotation of Rosneft and was one of the two international placement agents for Sberbank’s $8.8bn flotation. It has traded leading M&A adviser status in Russia with Credit Suisse over the past three years.
Russia’s capital markets have quietened down this year compared to the boom in mergers and acquisitions last year. JP Morgan is the second leading adviser for the year to date, having advised on two deals worth $7.5bn. In 2008, JP Morgan advised on eight deals during the entire year worth a total of $18.1bn.
Costello was hired in March last year as JP’s first Moscow chief executive. He spent five years as chief executive of UBS' Moscow-based investment banking joint venture UBS Brunswick until taking time out of the banking industry in 2004.
Jason Corcoran in Moscow
15 May 2009
Jeffrey Costello, chief executive of JP Morgan in Russia, has taken over as head of investment banking in Moscow following the surprise departure of Natalia Tsukanova to take up a role as an adviser to the Kremlin.
JP Morgan said Costello had taken over Tsukanova’s duties temporarily following her departure last month to advise the Russian government on it foreign acquisition plans.
Investment banking sources said Tsukanova had been tapped by Igor Sechin, deputy prime minister and energy giant Rosneft chairman, to advise the government on foreign acquisitions in the oil and gas sector.
“Tsukanova was with JP for 12 years and wanted to try something new. This was an offer she felt she couldn’t refuse,” said a banker close to the situation.
A Moscow spokeswoman for JP Morgan said Costello was taking over until a suitable replacement could be found. It was too early to say whether internal or external candidates will be sought.
Tsukanova’s investment banking team has had a good run over the past few years. Its bankers acted as joint bookrunner on the $10.7bn (€7.9bn) flotation of Rosneft and was one of the two international placement agents for Sberbank’s $8.8bn flotation. It has traded leading M&A adviser status in Russia with Credit Suisse over the past three years.
Russia’s capital markets have quietened down this year compared to the boom in mergers and acquisitions last year. JP Morgan is the second leading adviser for the year to date, having advised on two deals worth $7.5bn. In 2008, JP Morgan advised on eight deals during the entire year worth a total of $18.1bn.
Costello was hired in March last year as JP’s first Moscow chief executive. He spent five years as chief executive of UBS' Moscow-based investment banking joint venture UBS Brunswick until taking time out of the banking industry in 2004.
Tuesday, 24 March 2009
JP Morgan launches in Kazakhstan
Financial News
Jason Corcoran in Moscow
12 March 2009
JP Morgan opened a representative office in Kazakhstan last week just as the government began to appoint financial advisers to restructure its troubled banking sector.
Bill Winters, co-chief executive of investment banking at JP Morgan, travelled to Kazakshstan for the opening last week and had talks with Kazakhstan’s prime minister Karim Masimov and government officials.
The representative office is staffed by “a handful of people”, according to a spokeswoman for JP Morgan, and is headed by Timur Kunanbayev, who had been the London-based head of investment banking coverage for Kazakhstan since 2007. Prior to JP Morgan, he had been managing director of Kazakh bank Alliance.
Kazakhstan’s banking sector has been badly hit by the collapse of the property sector in Almaty and Astana, failing oil prices and the closure of the international credit markets.
The Kazakh government took control over Alliance and BTA Bank, two of the countries largest lenders in February, after they breached liquidity and capital adequacy ratios. The government has said the takeovers are only a temporary measure directed at stabilizing the banking system.
BTA, the largest lender, said on Tuesday it was not in talks to restructure its debt despite market speculation and the appointment of Goldman Sachs as an adviser.
Russian bank Renaissance Capital won a mandate in November to co-manage the Kazakhstan government's distressed asset fund. Other Western banks are believed to be talking to the government about potential mandates.
The spokeswoman for JP Morgan said Winters had met with government officials but declined to comment on any role the bank might play in advising restructuring of the banking sector.
She said: “In terms of clients, we will focus largely on servicing quasi-sovereign institutions, selected banks and high-quality corporates.”
The rep office located in Kazakhstan’s financial capital of Almaty will support the bank’s industry and product teams in London and worldwide. Domestic clients will be offered access to investment banking products, including debt and equity capital markets, mergers and acquisitions, and global markets solutions. The office will also promote JP Morgan’s range of treasury and securities services.
Credit Suisse, Renaissance Capital and Troika Dialog all have operations in Almaty.
Jason Corcoran in Moscow
12 March 2009
JP Morgan opened a representative office in Kazakhstan last week just as the government began to appoint financial advisers to restructure its troubled banking sector.
Bill Winters, co-chief executive of investment banking at JP Morgan, travelled to Kazakshstan for the opening last week and had talks with Kazakhstan’s prime minister Karim Masimov and government officials.
The representative office is staffed by “a handful of people”, according to a spokeswoman for JP Morgan, and is headed by Timur Kunanbayev, who had been the London-based head of investment banking coverage for Kazakhstan since 2007. Prior to JP Morgan, he had been managing director of Kazakh bank Alliance.
Kazakhstan’s banking sector has been badly hit by the collapse of the property sector in Almaty and Astana, failing oil prices and the closure of the international credit markets.
The Kazakh government took control over Alliance and BTA Bank, two of the countries largest lenders in February, after they breached liquidity and capital adequacy ratios. The government has said the takeovers are only a temporary measure directed at stabilizing the banking system.
BTA, the largest lender, said on Tuesday it was not in talks to restructure its debt despite market speculation and the appointment of Goldman Sachs as an adviser.
Russian bank Renaissance Capital won a mandate in November to co-manage the Kazakhstan government's distressed asset fund. Other Western banks are believed to be talking to the government about potential mandates.
The spokeswoman for JP Morgan said Winters had met with government officials but declined to comment on any role the bank might play in advising restructuring of the banking sector.
She said: “In terms of clients, we will focus largely on servicing quasi-sovereign institutions, selected banks and high-quality corporates.”
The rep office located in Kazakhstan’s financial capital of Almaty will support the bank’s industry and product teams in London and worldwide. Domestic clients will be offered access to investment banking products, including debt and equity capital markets, mergers and acquisitions, and global markets solutions. The office will also promote JP Morgan’s range of treasury and securities services.
Credit Suisse, Renaissance Capital and Troika Dialog all have operations in Almaty.
Sunday, 25 January 2009
Merrill Lynch leads Russian M&A in 2008
Business New Europe
Jason Corcoran in Moscow
January 23, 2009
Merrill Lynch has ousted JP Morgan Chase to take the crown as leading adviser to Russian merger and acquisitions in 2008.
US bank JP Morgan narrowly beat its Wall Street rival in 2007 due to its involvement in announced deals worth $40.8bn, compared with Merrill's $39.2bn. However, last year Merrill nudged ahead through advising on 14 deals worth $24bn compared with JP Morgan's 12 transactions worth $19.6bn, according to statistics prepared for bne by data provider Thomson Reuters.
During the year, Merrill's most notable deals included advising steelmaker Severstal on its $775m acquisition of US steel products manufacturer Esmark, as well as Rusal, the world's largest aluminium producer, on its taking a 25% holding in domestic rival Norilsk Nickel.
Overall, fees generated from M&A were well down last year, with Merrill Lynch earning $40.7m, compared with $58m in 2007. JP Morgan's fee income from Russian deals more than halved to $37.6m, from $78m a year ago.
Merrill Lynch is one of the few investment banks operating in Russia that is yet to cut its staffing levels. The bank has 83 staff based in Moscow and has several vacancies it is seeking to fill when the market stabilises. "We have made a lot of money in M&A and fixed income in the past year, and the business is not yet a high cost one," says one senior source. "In fact, we got lucky that we were gradually building up the brokerage business when the banking crisis struck."
Responsibility for the business lies with Riccardo Orcel, head of investment banking for Central and Eastern Europe and the Middle East and Africa, but the business is fronted in Moscow by American Bernie Sucher, head of global markets in Russia. Sergei Aleksashenko, the chairman of Russian business, quit in April last year following a dispute over the running of the operation, but sources indicated his position would not be refilled.
Harsh times
Overall, investment banks operating in Russia have been hit by a 40% slump in M&A activity with little sign of recovery until the middle of 2009.
The volumes of M&A deals tumbled by almost 40% in the three months to November 2008, according to Russian data provider Merger.ru. Some 258 transactions were completed worth $13.7bn, down by 40% from $22.6bn for the same period a year earlier. Volumes were hurt when big deals were pulled, including planned acquisitions by electricity utility OGK-1, supermarket chain Lenta and steelmaker Novolipetsk.
Russian deal activity had been growing steadily for several years until the banking crisis hit Russia in September. In the second quarter of 2008, M&A volumes were up 80% to $57bn from $31.5bn in the same period a year earlier. But from January through November, the M&A market declined by 7% to $102bn, compared with $110bn in the corresponding period of last year.
The communications sector was the most popular for deals, generating 20% of all M&A deals between September and November worth $2.7bn. The financial sector was next with 18.5% of volumes worth $2.5bn.
Russian broker Renaissance Capital was again the leading bookrunner in equity issuance for 2008 with a market share of 18% from four IPOs worth $452m. Morgan Stanley came second with three mandates worth $320 in a market where dealflow had dried up by end of the second quarter. The largest deal was a $1bn rights offering by London-listed Russian retailer X5 on April 22. Citigroup and Goldman Sachs were joint bookrunners and the underwriter was Russian broker Alfa Capital.
In debt capital markets, US bank Citigroup triumphed over Deutsche Bank with a market share of 12.4% generated from six issues worth $2.75bn. The German bank registered a market share of 10.6% from five issues worth $2.36bn, while the Royal Bank of Scotland was not too far behind with a 10.4% share from 10 issues worth $2.3bn.
http://businessneweurope.eu/storyf1423/Merrill_Lynch_leads_Russian_MA_in_2008
Jason Corcoran in Moscow
January 23, 2009
Merrill Lynch has ousted JP Morgan Chase to take the crown as leading adviser to Russian merger and acquisitions in 2008.
US bank JP Morgan narrowly beat its Wall Street rival in 2007 due to its involvement in announced deals worth $40.8bn, compared with Merrill's $39.2bn. However, last year Merrill nudged ahead through advising on 14 deals worth $24bn compared with JP Morgan's 12 transactions worth $19.6bn, according to statistics prepared for bne by data provider Thomson Reuters.
During the year, Merrill's most notable deals included advising steelmaker Severstal on its $775m acquisition of US steel products manufacturer Esmark, as well as Rusal, the world's largest aluminium producer, on its taking a 25% holding in domestic rival Norilsk Nickel.
Overall, fees generated from M&A were well down last year, with Merrill Lynch earning $40.7m, compared with $58m in 2007. JP Morgan's fee income from Russian deals more than halved to $37.6m, from $78m a year ago.
Merrill Lynch is one of the few investment banks operating in Russia that is yet to cut its staffing levels. The bank has 83 staff based in Moscow and has several vacancies it is seeking to fill when the market stabilises. "We have made a lot of money in M&A and fixed income in the past year, and the business is not yet a high cost one," says one senior source. "In fact, we got lucky that we were gradually building up the brokerage business when the banking crisis struck."
Responsibility for the business lies with Riccardo Orcel, head of investment banking for Central and Eastern Europe and the Middle East and Africa, but the business is fronted in Moscow by American Bernie Sucher, head of global markets in Russia. Sergei Aleksashenko, the chairman of Russian business, quit in April last year following a dispute over the running of the operation, but sources indicated his position would not be refilled.
Harsh times
Overall, investment banks operating in Russia have been hit by a 40% slump in M&A activity with little sign of recovery until the middle of 2009.
The volumes of M&A deals tumbled by almost 40% in the three months to November 2008, according to Russian data provider Merger.ru. Some 258 transactions were completed worth $13.7bn, down by 40% from $22.6bn for the same period a year earlier. Volumes were hurt when big deals were pulled, including planned acquisitions by electricity utility OGK-1, supermarket chain Lenta and steelmaker Novolipetsk.
Russian deal activity had been growing steadily for several years until the banking crisis hit Russia in September. In the second quarter of 2008, M&A volumes were up 80% to $57bn from $31.5bn in the same period a year earlier. But from January through November, the M&A market declined by 7% to $102bn, compared with $110bn in the corresponding period of last year.
The communications sector was the most popular for deals, generating 20% of all M&A deals between September and November worth $2.7bn. The financial sector was next with 18.5% of volumes worth $2.5bn.
Russian broker Renaissance Capital was again the leading bookrunner in equity issuance for 2008 with a market share of 18% from four IPOs worth $452m. Morgan Stanley came second with three mandates worth $320 in a market where dealflow had dried up by end of the second quarter. The largest deal was a $1bn rights offering by London-listed Russian retailer X5 on April 22. Citigroup and Goldman Sachs were joint bookrunners and the underwriter was Russian broker Alfa Capital.
In debt capital markets, US bank Citigroup triumphed over Deutsche Bank with a market share of 12.4% generated from six issues worth $2.75bn. The German bank registered a market share of 10.6% from five issues worth $2.36bn, while the Royal Bank of Scotland was not too far behind with a 10.4% share from 10 issues worth $2.3bn.
http://businessneweurope.eu/storyf1423/Merrill_Lynch_leads_Russian_MA_in_2008
Monday, 18 February 2008
New Geneva Team for Russian ultra wealthy
Wealth Briefing
February 18, 2008
Jason Corcoran in Moscow
JP Morgan Private Banking is setting up a new Geneva-based team to serve Russian ultra high-net worth clients.
Leonard Tsomik, head of JP Morgan Private Banking Russia & Eastern Europe, said he had identified a number of candidates to hire in Geneva to complement the bank's Russia team in London and 100-strong personnel already covering the county.
In an exclusive interview with WealthBriefing, he said: "We have a small team in London and we are about to establish a team in Geneva of considerable size. Russians are very active in Switzerland and some have made their homes there so it makes sense to compliment our London coverage. We have a small active pipeline of professionals worth hiring for Geneva."
JP Morgan targets Russian ultra high net worth individuals and families with investment portfolios of $30 million or more. The minimum benchmark to invest with the bank offshore is $10 million, which far exceeds the average $1.5 million portfolio of Troika Dialog's ultra high net worth clients.
"Some of our competitors will take $500,000 million or less to get market share and to reach our levels. They cast a wider net," he added.
Mr Tsomik has worked on the Russian market in private banking and private equity since 1994 although JP Morgan only entered the market recently.
"All of our clients continue to invest a predominant amount in Russia," he explained. "Some like discretionary approach or advisory approach. We can also do things other banks can't do. Our core business is asset management and we are also an investment bank to private clients."
JP Morgan's investment bank was one of the first foreign banks to open in Russia in 1973 and last year topped the league table for involvement in Russian M&A advisory work.
Mr Tsomik said the private bank would leverage off the investment bank's experience and contacts in the market.
"We work very closely with the investment bank without violating regulations, confidentiality or Chinese walls. It's key to have the introduction from the investment bank because cold calls are only so good in any market."
Mr Tsomik said the origins of Russia's wealth had transformed overwhelmingly from natural resources to relatively new consumer economy sectors such as retail, food processing and real estate over the past five years.
"The market is very young and the clients are very young and very active in their business. There are no second and third generation clients. These guys are very sophisticated and are very interested in managing their own money and only parting with a portion of it. "
February 18, 2008
Jason Corcoran in Moscow
JP Morgan Private Banking is setting up a new Geneva-based team to serve Russian ultra high-net worth clients.
Leonard Tsomik, head of JP Morgan Private Banking Russia & Eastern Europe, said he had identified a number of candidates to hire in Geneva to complement the bank's Russia team in London and 100-strong personnel already covering the county.
In an exclusive interview with WealthBriefing, he said: "We have a small team in London and we are about to establish a team in Geneva of considerable size. Russians are very active in Switzerland and some have made their homes there so it makes sense to compliment our London coverage. We have a small active pipeline of professionals worth hiring for Geneva."
JP Morgan targets Russian ultra high net worth individuals and families with investment portfolios of $30 million or more. The minimum benchmark to invest with the bank offshore is $10 million, which far exceeds the average $1.5 million portfolio of Troika Dialog's ultra high net worth clients.
"Some of our competitors will take $500,000 million or less to get market share and to reach our levels. They cast a wider net," he added.
Mr Tsomik has worked on the Russian market in private banking and private equity since 1994 although JP Morgan only entered the market recently.
"All of our clients continue to invest a predominant amount in Russia," he explained. "Some like discretionary approach or advisory approach. We can also do things other banks can't do. Our core business is asset management and we are also an investment bank to private clients."
JP Morgan's investment bank was one of the first foreign banks to open in Russia in 1973 and last year topped the league table for involvement in Russian M&A advisory work.
Mr Tsomik said the private bank would leverage off the investment bank's experience and contacts in the market.
"We work very closely with the investment bank without violating regulations, confidentiality or Chinese walls. It's key to have the introduction from the investment bank because cold calls are only so good in any market."
Mr Tsomik said the origins of Russia's wealth had transformed overwhelmingly from natural resources to relatively new consumer economy sectors such as retail, food processing and real estate over the past five years.
"The market is very young and the clients are very young and very active in their business. There are no second and third generation clients. These guys are very sophisticated and are very interested in managing their own money and only parting with a portion of it. "
Sunday, 9 December 2007
Deutsche Bank retains lead in Russia's capital markets in 2007
Business New Europe
Jason Corcoran in Moscow
December 7, 2007
Deutsche Bank has retained its leading status in Russia's capital markets in 2007 despite being buffeted by the loss of key rainmakers and increased competition in Moscow from bulge-bracket banking rivals like Goldman Sachs and Lehman Brothers.
Deutsche, which has over 800 staff in Moscow, shed its UFG brand in October having completed the acquisition of the local brokerage late in 2006. The German bank's leading drummer-up of business in Russia, Nick Jordan, left for Lehman Brothers during the year and his investment banking co-head Ilya Sherbovich is winding down before he joins his own fledgling boutique United Capital Partners next year. Both Jordan and Sherbovich are bringing on board UFG staff to beef up their operations, but this has yet to affect Deutsche's standing in the capital markets tables.
According to data provider Thomson Financial, Deutsche is the leading equities bookrunner so far this year from its involvement in 10 issues worth over $5.3bn. Renaissance Capital is second from its share of 14 issues worth $4.3bn, while Citigroup completes the top trio with 4 issues worth $4bn. Deutsche, which has promoted internally to replace Jordan and Sherbovich, acted as joint global coordinator and bookrunner to VTB Bank in its $8bn IPO in May. It also organised offerings by the electricity suppliers OGK-2 and OGK-3 worth over $2bn and the recent flotation by real estate firm LSR worth $772m.
The head of Deutsche's Russian operations, Charlie Ryan, is nonplussed by Moscow's hiring war, which saw Ed Kaufman move from UBS to Alfa Bank for a guaranteed $15m over two years. "I have seen this movie before," he said earlier this year. "Moscow is not a get-rich scheme, because you need to have all the pieces of infrastructure in place like we do. A lot of our competitors are becoming increasingly desperate because they can't achieve scale. They are planning tennis without a net."
Returnees
This year saw the return to Moscow of Goldman, Lehman and Nomura, all of which fled in 1998 nursing losses from the financial crisis and the subsequent bond default. A boom in consumer spending, oil tilting towards $100 a barrel, a record number of IPOs and high economic growth are the main reasons drawing them back.
Goldman, the world's most profitable and respected investment bank, has made little inroads yet into the Russian market. The co-heads of its Russian operation both left for local firms during the year, with Gordon McCulloch heading for Renaissance and Magomed Galaev leaving to run an oligarch's investments. Goldman is fifth in Thomson's equity table, eighth in mergers and acquisitions, and 11th in debt capital markets; Lehman is nowhere.
Other Western banks already active in Russia, such as Merrill Lynch and JP Morgan, are desperately trying to build scale in an already saturated market. Merrill is fighting tooth and nail with JP Morgan for the top adviser crown on M&A involving Russian companies. Morgan Stanley is in third and Deutsche is fourth. Overall, Russian M&A activity has more than doubled this year to a record $127bn (€86.2bn), according to Thomson's figures.
JP Morgan, which was frustrated in its efforts to buy a local brokerage, snatched a team of 16 analysts, traders and institutional sales people from Russia's MDM Bank in July. Its Russian operation has maintained relationships with state-run entities and large corporations in Russia, acting as joint bookrunner last year on the $10.7bn flotation of Rosneft and was one of the two international placement agents for this year's $8.8bn listing by Sberbank.
Germany's Dresdner Kleinwort is trying to re-establish its leading position in equity capital market by hiring an additional 60 bankers. Dresdner has fallen out of the top 22 in Thomson's equity capital markets tables in the year to date after topping the poll in 2007 thanks to its joint-bookrunner mandates on the Rosneft and TMK IPOs. In M&A, Dresdner is 18th compared with its ninth position in 2006.
Dresdner has been rebuilding since the departure last year of Bob Foresman, head of the Moscow office, to Renaissance. Foresman subsequently hired six bankers from Dresdner. Matthias Warnig, former chairman of Dresdner's Russian business, also joined VTB's board ahead of its flotation although he remains involved on a part-time basis.
A surprise new entrant in the top five is St Petersburg's own KIT Finance, which worked on five deals worth over $19m. The up-and-coming bank has benefited from close links to a number of oligarchs and is plotting its own IPO for early next year.
In debt capital markets, the Western banks with big pockets retain a stranglehold at the top of the table. Dutch bank ABN AMRO, with 14 deals worth $3.7bn is just ahead of Citigroup while Deutsche Bank is third.
Jason Corcoran in Moscow
December 7, 2007
Deutsche Bank has retained its leading status in Russia's capital markets in 2007 despite being buffeted by the loss of key rainmakers and increased competition in Moscow from bulge-bracket banking rivals like Goldman Sachs and Lehman Brothers.
Deutsche, which has over 800 staff in Moscow, shed its UFG brand in October having completed the acquisition of the local brokerage late in 2006. The German bank's leading drummer-up of business in Russia, Nick Jordan, left for Lehman Brothers during the year and his investment banking co-head Ilya Sherbovich is winding down before he joins his own fledgling boutique United Capital Partners next year. Both Jordan and Sherbovich are bringing on board UFG staff to beef up their operations, but this has yet to affect Deutsche's standing in the capital markets tables.
According to data provider Thomson Financial, Deutsche is the leading equities bookrunner so far this year from its involvement in 10 issues worth over $5.3bn. Renaissance Capital is second from its share of 14 issues worth $4.3bn, while Citigroup completes the top trio with 4 issues worth $4bn. Deutsche, which has promoted internally to replace Jordan and Sherbovich, acted as joint global coordinator and bookrunner to VTB Bank in its $8bn IPO in May. It also organised offerings by the electricity suppliers OGK-2 and OGK-3 worth over $2bn and the recent flotation by real estate firm LSR worth $772m.
The head of Deutsche's Russian operations, Charlie Ryan, is nonplussed by Moscow's hiring war, which saw Ed Kaufman move from UBS to Alfa Bank for a guaranteed $15m over two years. "I have seen this movie before," he said earlier this year. "Moscow is not a get-rich scheme, because you need to have all the pieces of infrastructure in place like we do. A lot of our competitors are becoming increasingly desperate because they can't achieve scale. They are planning tennis without a net."
Returnees
This year saw the return to Moscow of Goldman, Lehman and Nomura, all of which fled in 1998 nursing losses from the financial crisis and the subsequent bond default. A boom in consumer spending, oil tilting towards $100 a barrel, a record number of IPOs and high economic growth are the main reasons drawing them back.
Goldman, the world's most profitable and respected investment bank, has made little inroads yet into the Russian market. The co-heads of its Russian operation both left for local firms during the year, with Gordon McCulloch heading for Renaissance and Magomed Galaev leaving to run an oligarch's investments. Goldman is fifth in Thomson's equity table, eighth in mergers and acquisitions, and 11th in debt capital markets; Lehman is nowhere.
Other Western banks already active in Russia, such as Merrill Lynch and JP Morgan, are desperately trying to build scale in an already saturated market. Merrill is fighting tooth and nail with JP Morgan for the top adviser crown on M&A involving Russian companies. Morgan Stanley is in third and Deutsche is fourth. Overall, Russian M&A activity has more than doubled this year to a record $127bn (€86.2bn), according to Thomson's figures.
JP Morgan, which was frustrated in its efforts to buy a local brokerage, snatched a team of 16 analysts, traders and institutional sales people from Russia's MDM Bank in July. Its Russian operation has maintained relationships with state-run entities and large corporations in Russia, acting as joint bookrunner last year on the $10.7bn flotation of Rosneft and was one of the two international placement agents for this year's $8.8bn listing by Sberbank.
Germany's Dresdner Kleinwort is trying to re-establish its leading position in equity capital market by hiring an additional 60 bankers. Dresdner has fallen out of the top 22 in Thomson's equity capital markets tables in the year to date after topping the poll in 2007 thanks to its joint-bookrunner mandates on the Rosneft and TMK IPOs. In M&A, Dresdner is 18th compared with its ninth position in 2006.
Dresdner has been rebuilding since the departure last year of Bob Foresman, head of the Moscow office, to Renaissance. Foresman subsequently hired six bankers from Dresdner. Matthias Warnig, former chairman of Dresdner's Russian business, also joined VTB's board ahead of its flotation although he remains involved on a part-time basis.
A surprise new entrant in the top five is St Petersburg's own KIT Finance, which worked on five deals worth over $19m. The up-and-coming bank has benefited from close links to a number of oligarchs and is plotting its own IPO for early next year.
In debt capital markets, the Western banks with big pockets retain a stranglehold at the top of the table. Dutch bank ABN AMRO, with 14 deals worth $3.7bn is just ahead of Citigroup while Deutsche Bank is third.
Sunday, 17 June 2007
JP Morgan takes 16-strong team from Russian rival
Financial News
Jason Corcoran in Moscow
15 June 2007
JP Morgan is understood to have hired a team of analysts, traders and institutional sales people from Russia's MDM Bank in the latest of a series of battles for investment banking talent in the country.
The US investment bank, which was frustrated in its efforts to buy Russia's Troika Dialog and Aton Capital, is believed to have signed contracts with about 16 staff from MDM earlier this week.
A source close to MDM, said: "It's a fait accompli, the team are leaving for JP."
Those joining JP Morgan in Moscow include Vladimir Bril, managing director and head of equity sales, trading and research at MDM, Alex Kantarovich, head of equity research department and Derek Pearlin, managing director and head of equity sales.
The recruits are mainly on research but several sales, trading and back office staff are also understood to be leaving.
MDM is a privately owned bank geared towards retail and investment banking that was set up in 1993.
Businessman Sergei Popov has a 90% stake in the bank after parting company with co-founder Andrei Melnichenko, with whom he jointly owned MDM until last December
The bank recently hired Oleg Vyugin, former director of Russia's Federal Financial Markets Service, as chairman after market speculation tipped him to join Goldman Sachs.
JP Morgan was among the first US banks to open in the Soviet Union when Chase Manhattan chairman David Rockefeller established an office at 1 Karl Marx Square in Moscow in 1973.
The firm's Russian investment banking operation has maintained relationships with state-run entities and large corporations in Russia . It acted as joint bookrunner last year on the $10.7bn flotation of Rosneft and was one of the two international placement agents for this year's $8.8bn listing by Sberbank.
Last year JP Morgan was ranked second in Russian M&A by Dealogic and also had a strong showing in Russian international bonds.
Despite this success, the bank has made little secret of its plans to buy a local brokerage and held talks about buying Troika last year.
Its Moscow team comprises 80 people supported by over 20 Russia-dedicated industry and product specialists in Moscow and London.
Most Western investment banks have operations in Russia , but some have been expanding and investing over the past year to capitalise on the country's natural resources boom and growing consumer sector.
A unit of Italian bank UniCredit last year acquired Russian broker Aton Capital Group's equity, fixed income and corporate finance divisions for $424m.
A Moscow-based banker said MDM was unlikely to be ranked among the top securities houses in Moscow, and added that the best houses were Renaissance Troika, Deutsche, UBS, Aton, Alfa, UralSib.
Another source added: "They have some really good analysts in the team but I bet JP Morgan is paying an inordinately high premium."
A London spokeswoman for JP Morgan declined to comment.
Igor Smolkin, head of investment banking at MDM, did not return calls or emails.
www.efinancialnews.com
Jason Corcoran in Moscow
15 June 2007
JP Morgan is understood to have hired a team of analysts, traders and institutional sales people from Russia's MDM Bank in the latest of a series of battles for investment banking talent in the country.
The US investment bank, which was frustrated in its efforts to buy Russia's Troika Dialog and Aton Capital, is believed to have signed contracts with about 16 staff from MDM earlier this week.
A source close to MDM, said: "It's a fait accompli, the team are leaving for JP."
Those joining JP Morgan in Moscow include Vladimir Bril, managing director and head of equity sales, trading and research at MDM, Alex Kantarovich, head of equity research department and Derek Pearlin, managing director and head of equity sales.
The recruits are mainly on research but several sales, trading and back office staff are also understood to be leaving.
MDM is a privately owned bank geared towards retail and investment banking that was set up in 1993.
Businessman Sergei Popov has a 90% stake in the bank after parting company with co-founder Andrei Melnichenko, with whom he jointly owned MDM until last December
The bank recently hired Oleg Vyugin, former director of Russia's Federal Financial Markets Service, as chairman after market speculation tipped him to join Goldman Sachs.
JP Morgan was among the first US banks to open in the Soviet Union when Chase Manhattan chairman David Rockefeller established an office at 1 Karl Marx Square in Moscow in 1973.
The firm's Russian investment banking operation has maintained relationships with state-run entities and large corporations in Russia . It acted as joint bookrunner last year on the $10.7bn flotation of Rosneft and was one of the two international placement agents for this year's $8.8bn listing by Sberbank.
Last year JP Morgan was ranked second in Russian M&A by Dealogic and also had a strong showing in Russian international bonds.
Despite this success, the bank has made little secret of its plans to buy a local brokerage and held talks about buying Troika last year.
Its Moscow team comprises 80 people supported by over 20 Russia-dedicated industry and product specialists in Moscow and London.
Most Western investment banks have operations in Russia , but some have been expanding and investing over the past year to capitalise on the country's natural resources boom and growing consumer sector.
A unit of Italian bank UniCredit last year acquired Russian broker Aton Capital Group's equity, fixed income and corporate finance divisions for $424m.
A Moscow-based banker said MDM was unlikely to be ranked among the top securities houses in Moscow, and added that the best houses were Renaissance Troika, Deutsche, UBS, Aton, Alfa, UralSib.
Another source added: "They have some really good analysts in the team but I bet JP Morgan is paying an inordinately high premium."
A London spokeswoman for JP Morgan declined to comment.
Igor Smolkin, head of investment banking at MDM, did not return calls or emails.
www.efinancialnews.com
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