Canada's Best Investment Bank

NORTH AMERICA

CANADA’S BEST INVESTMENT BANK RBC

Canada’s investment banking franchises have had a challenging the foreign currency environment to deal with in 2018 and 2019. But RBC Capital debt markets. Exam- Markets has weathered the situation well and is Canada’s best ples of the latter in- investment bank. clude a hybrid deal for Market activity has been down, including in the energy sector, Enbridge in the US, which typically accounts for about a third of Canadian investment where RBC was the banking business. This is not a reflection of commodity prices – only Canadian firm to oil, for example, has improved – but rather regulatory and other sit alongside US banks challenges, such as delays in getting pipelines built. on the transaction. At the same time, the trend towards more global allocation The flipside has been approaches on the investor side has meant that Canadian stories just as busy, with the have had to fight harder to be compelling. bank continuing to But RBC has continued its journey from a Canadian regional lead the maple mar- capital markets business to one that is increasingly global. For the ket, including deals Derek Neldner, RBC Capital period under review, RBC’s investment bank revenues rose 4% to for Heathrow Airport, Markets. Facing clients from a global C$8.5 billion ($6.5 billion), more than double its closest rival in Bank of America and perspective that area. And Derek Neldner, who has been global head of invest- Wells Fargo. ment banking since last year, is pushing the unit to emulate how The scope of the its clients are dealing with the wider world. bank’s asset-class expertise also sets it apart. A deal for First Capi- “We are making sure that we are facing our clients from a tal Realty, which was to monetize a stake held by Gazit, involved global perspective,” says Neldner. a public offering of about $550 million of instalment receipts That cuts across industry groups. The bank has appointed and included a concurrent buyback by First Capital of part of the global heads in key sectors, like mining and technology, but has block, for which RBC provided a bridge loan. also reorganized asset classes on global lines, appointing new Sustainability has been a focus during the awards period, with global co-heads of equities, for example. the bank forming a dedicated sustainable finance group in its The moves are a natural development of what has always been capital markets franchise in January. Developing that further will the differentiator for RBC versus its Canadian peers – its access be a priority for the year ahead. to global markets. On the M&A side there was no better example For Neldner, despite tricky markets, the intention is to pursue than the sole adviser mandate in late 2018 for Kraft Heinz, which growth. was selling its Canadian cheese business to Parmalat of Italy in a “We are continuing to hire across the platform, in line with the C$1.6 billion deal. theme of the globalization of the business,” he says. “We were acting for a US company selling a Canadian business The bank has formed a convergence group that spends its time to a European buyer – our platform brings unique expertise to looking at cross-sector convergence, such as the impact of technol- execute a transaction like this,” says Neldner. ogy on consumer or industrial businesses. Coupling that with In debt capital markets, the bank continues to top the rankings its cross-border reach will put RBC Capital Markets in an even for Canadian deals as well as for taking Canadian borrowers into stronger position to fight off its rivals.