International bankers getting into M&A downunder
Based on the latest 6 monthly East & Partners analysis of account penetration and market share in the Top 500 Australian corporates and institutions, the research also shows that primary M&A relationships attract the bulk of a customer’s business. The two analyses following show this "share of wallet" to be climbing and already close to 90 percent of total business written by the service provider holding primary relationship positioning with the corporate in M&A services. Nowhere is the mantra "relationship, relationship" more relevant to a bank and becoming more so, than in M&A business.
Much of this is being driven by expectations on the part of corporates for real industry sector understanding to be displayed by their M&A bankers. With an increasing proportion of Australia’s total M&A activity being internationalised – both inward and outbound – bankers clearly have to table a deep understanding of an industry’s dynamics and display close connections with key players in order to receive mandates.
Domestic bankers, in particular the "Big 4" are defending their positions with some vigour, building out sector based advisory teams and recruiting expatriates back to the country with lifestyle and market maturity arguments. Holding what is in many cases multi-product relationships with their customers already, the key to their defence of this space lies in the banks’ abilities to effectively cross sell capability in M&A from transaction and financial markets relationships with the customer; an argument of course that the international investment bankers dismiss as irrelevant, concentrating instead on niche relationship development with the market.
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