Awkward: Goldman, Morgan Stanley Both Rush Podium for M&A Trophy
(Bloomberg) -- Wondering which Wall Street firm is unequivocally the world’s top dealmaker? Maybe don’t ask a banker.
Once again, more than one of the industry’s leading firms is grabbing the trophy for the most successful. While announcing quarterly results this week, Morgan Stanley and Goldman Sachs Group Inc. both declared in press releases they’re this year’s No. 1 adviser of mergers and acquisitions. Same goes for arranging initial public offerings.
“I’ve never met a banker that wasn’t top of the league tables,” Brennan Hawken, an analyst at UBS Group AG, quipped by email on Wednesday. He said that’s because so many slice the data until it flatters them.
Fights at the podium have broken out before. In early 2016, three banks -- Goldman Sachs, Morgan Stanley and JPMorgan Chase & Co. -- all claimed to be the best in handling takeovers during that year’s first quarter.
There’s strong incentive to do so. With U.S. corporations flush with cash after Republican tax cuts, banks are vying for a potential windfall of fees. On conference calls, the industry’s leaders took turns hinting at robust “pipelines” -- deals that could soon become official. Telling prospective clients you’re No. 1 helps land mandates.
“As you’re pitching for new business, success begets more success,” said Devin Ryan, an analyst at JMP Securities LLC. “That’s why investment banks tend to put themselves in the best light.”
Goldman Sachs said Tuesday it was the world’s best in announced M&A deals as well as equity offerings including IPOs. It cited data from Dealogic for the year’s first half. Morgan Stanley relied on Thomson Reuters figures for the same period to conclude its investment bankers had the best global performance in announced and completed M&A transactions, in addition to IPOs. It cited a snapshot of data taken on July 2.
Data compiled by Bloomberg show Morgan Stanley is the No. 1 adviser of takeovers announced this year that are either pending or completed as of early Wednesday afternoon in New York. When it comes to advisory fees, Goldman Sachs is on top.
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