Best Independent Investment Bank

Euromoney Magazine Page 1 of 2 Awards for Excellence 2014: Best independent investment bank Thursday, July 10, 2014 A more cohesive, flatter management structure has kept the venerable investment bank ahead of its challengers. Best independent investment bank: Lazard As the recovery in mergers and acquisitions activity accelerated at the start of this year, much attention focused on the growing prominence of small, boutique advisers working on many of the biggest and most complex deals alongside the integrated universal banks. Few of these boutiques are any more than vehicles for high-profile individual dealmakers to monetize networks of relationships with corporate CEOs built up over decades, advising them from inside the big firms. It is sometimes overlooked that the only independent firm that truly challenges the big universal banks in the fee and volume league tables in M&A is no recently formed boutique, but rather the 165-year-old investment bank Lazard Brothers. Just looking at the first quarter of 2014, Lazard’s fee revenues from M&A ranked it ahead of Deutsche Bank – the self-anointed last European aspirant to be a universal global investment bank – Citi and Also shortlisted: UBS, and put it within a deal or two of Morgan Stanley. Ondra Partners “We’re in a new phase of the M&A market. The 2006/07 wave was driven by lending in various forms. The 1999/2000 peak was equity capital markets and equity research driven. This phase is more Moelis & Co strategic. The transactions are often cross-border and complex, and the key requirement of corporate boards and executives is for trusted advice and global capabilities,” says Antonio Weiss, global head of investment banking at Lazard. “There’s been a separation of financing from advice. Clients View more 2014 awards remember that, in the financial crisis, lending banks were forced by circumstance to act as counter- parties rather than advisers on deals.” He adds: “Of course it’s interesting to be independent. Being the best is more important.” So while Euromoney’s best M&A firm is Goldman Sachs, which advised Novartis on its recent complex restructuring, Lazard advised on the other side of that multi-legged transaction in which each part of the deal was contingent on every other. Lazard advised GlaxoSmithKline on the three-part transaction with Novartis involving the sale of its oncology business for up to $16 billion; the acquisition of Novartis’ global vaccines business for up to $7.1 billion; and the creation of a £6.5 billion-revenue consumer healthcare joint venture in which GSK will hold a 63.5% equity interest.Lazard has long been known as a firm committed to long-term relationships where advice is the core offering, rather than financing or hedging. While it also boasts asset management, restructuring, sovereign advisory and capital markets advisory practices, fully 50% of its revenue comes from M&A advisory. Advisory revenues have been growing, and Lazard’s have grown faster than its competitors among the large global banks. It has been a key player in some of the biggest deals. “Of the independents, we are the only firm with global reach on a par with the integrated banks, who remain strong competitors,” says Weiss. “We are intensely loyal to our clients. We are with them – and they with us – We’re in a new phase of for the long term. They involve us early in their thinking, providing strategic advice that may or may not lead to a transaction. And when here is a transaction, we often play the lead advisory role in its execution.” the M&A market. The More cohesive transactions are often cross-border and For example, Lazard is adviser to AT&T on its pending deal with DirecTV, while again Goldman is on the other side of that transaction. Another keynote transaction is advising L’Oreal on its €6.5 billion buy-back of 8% of its complex, and the key shares from Nestlé through a cash payment and exchange of its 50% stake in their Galderma joint venture. requirement of corporate This was an elegant way for L’Oreal to preserve its independence in return for allowing Nestlé 100% ownership of Galderma. boards and executives is In years past, the criticism of Lazard was that it was three separate firms in New York, London and Paris for trusted advice and acting independently from each other. Weiss claims that since going public and under the leadership of global capabilities chairman and chief executive Ken Jacobs, the firm has become more cohesive in its management. “There is a lot of discussion internally between the senior partners when we’re giving advice to a client. We are one firm with a single philosophy but a diversity of experience and cultures. We try to get the contrasting views in Antonio Weiss advance while delivering solutions to the client in real time,” says Weiss. “This requires a flatter, more transparent and more collegial environment. “The firm is in a particularly good phase.” http://www.euromoney.com/Print.aspx?ArticleID=3358980 11/07/2014.

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