After several years of underperformance, Europe is on the verge of becoming a happier place for investment bankers.
Fees charged for raising debt, equity and deal advisory have crept up 1 per cent year on year in Europe, to $4.4bn in the first quarter, according to Thomson Reuters. This total equates to a 24 per cent share of the global fee pool – the highest level since 2011.
With the eurozone crisis fast abating and business optimism holding up, despite the Ukraine crisis, investment bankers are confident that the dire years are over.
“I feel optimistic about Europe,” says Richard Gnodde, co-head of the investment banking division at Goldman Sachs.
Christian Meissner, head of global corporate and investment banking at Bank of America, is already anticipating increased business. “Over time, we expect [fees] to be less US-centric, which is why we are investing in Europe.”
One of the main drivers of Europe’s creeping comeback has been the market for public listings, where a flood of IPOs more than tripled bankers’ fee levels and brought the continent’s share of global commissions – at 23 per cent – to the highest level since 2007.
“Europe has been held up by a pretty buoyant IPO market, which is definitely acting as a significant alternative to the M&A market,” says Richard Taylor, head of Barclays’ investment banking division in Europe, the Middle East and Africa.
In Europe and beyond, the quarter has also shaken up investment banks’ highly coveted league tables. JPMorgan toppled Bank of America in the US fee ranking, while Goldman Sachs beat Deutsche Bank to the top spot in Europe.
Overall, US bank Morgan Stanley finally managed to step out of the shadow of arch-rival Goldman by grabbed the number one position in deal advisory league tables by value, according to Mergermarket.
Goldman ranked third – the first time in more than a decade that it did not appear as one of the top two global financial advisers by value during a first quarter. But it still occupies the prime spot when measured by the sheer number of deals.
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