Morgan Stanley leads as M&A shows signs of life
Morgan Stanley is outrunning archrival Goldman Sachs as 2009’s busiest adviser on mergers as optimism grows that the crippling effects of the financial crisis on dealmaking may be easing.
Morgan’s strong showing under new merger chief Robert Kindler not only spells prestige and fees, but marks a rebound for the bank after it fell to fifth position in 2008.
“I’m having fun,” says Kindler, a former Wall Street lawyer who joined Morgan Stanley three years ago from JPMorgan.
Morgan has overtaken Goldman as the top-ranked adviser for both global and U.S. mergers and acquisitions, working on deals worth $490.9 billion so far this year, as global M&A plummeted 41 percent to $1.392 trillion.
( For a graphic displaying the top 10 rankings, click here)
Kindler told Reuters it was “way too early to call the bottom of the M&A market” but said he saw promising signs.
“The two things that are most encouraging is that (strategic buyers) are back doing deals that make industrial sense and the credit markets are back open. That’s very good for M&A. The negative is that we have a volatile equity market,” he said in a telephone interview.
The value of deals totaled $369.3 billion in the third quarter, down 54 percent compared to the same quarter in 2008, according to Thomson Reuters data.
For the year to date, fees for completed deals fell an estimated 57 percent to $11.9 billion.
(For a graphic displaying fee rankings, click here)
European M&A in the year to date has more than halved to $433.8 billion — worse than U.S. and Asian declines of 43 and 38 percent respectively.
While the top spot in the M&A “league tables” is a highly sought-after position, Morgan Stanley still trails Goldman in perhaps the most important metric — earnings.
Morgan has posted two quarterly losses this year and has lagged far behind Goldman, which has stepped up its risk-taking and was rewarded with blowout trading results.
Analysts expect Morgan Stanley to post a small loss in 2009, while Goldman is expected post net earnings of about $8.5 billion, according to Reuters Estimates.
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Filed under: money by Fred