The investment bank acquires Britain’s Livingstone, a team of around 100 employees working for medium-sized British private companies. A segment that has become crucial for the large investment banks.
While Lazard is looking for governance in France after the departure of Matthieu Pigasse, Rothschild & Co goes on the offensive. The investment bank announced Thursday the acquisition of the British store Livingstone, a first since the takeover of the small Belgian mergers and acquisitions team L & Co in 2016. Its around one hundred employees have been working since the mid-1970s with medium-sized, private and family businesses, a segment long ignored and today ogled by all the funds and large investment banks like Goldman sachs and JP Morgan, against a backdrop of declining mergers and acquisitions.
In mid-October, European M&A was down 36% to $ 546.7 billion, according to Refinitiv. Even in the United States, the world’s largest market for mergers and acquisitions, growth has not exceeded… 1% (1.430 billion dollars) since January, the mega-deals running out of steam.
At the same time, however, competition has intensified between independent investment banks, which are seeing the emergence of new competitors launched by figures from major investment banks. Since the early 2000s, the share of “shops” has tripled in the global M & A game, to 36%, according to Refinitiv. In Europe, it even reached more than 47% (a multiplication by 2.6). Result: the two great French references, Lazard and Rothschild & Co, had to share their backyard.
From more than 23%, the market share of the former Franco-American house of Matthieu Pigasse among boutiques worldwide has shrunk to just under 8%, like Rothschild & Co, according to Refinitiv. In Europe, however, Rothschild is holding up much better against its independent competitors: its market share is over 13%, almost double that of Lazard. “The bank is under pressure in terms of market share, dit-on boulevard Haussmann. Even if we are a benchmark in the mega-deals, we are not very good in medium-sized operations, and this is where there is margin today ”.
Best year in UK
Rothschild & Co is therefore taking a head start, by buying a sister company from Transaction R & Co in Paris. The acquisition of Livingstone, present in traditional M&A, turnaround advice and debt restructuring ” gives us the unique opportunity to establish a mid-cap team dedicated to the UK market, a segment that we do not actively occupy today », Declared Robert Leitão, managing partner of the house.
For the French bank, this operation reinforces the core of its reactor, since the merger with Martin Maurel: the bridges between investment banking and wealth management. From sources familiar with the matter, the Livingstone team is very well introduced to private banking networks in the United Kingdom.
The long wait for Brexit does not frighten Rothschild, says François Pérol, co-chairman of the executive committee: “We had our best year in 2018 in the UK and 2019 is looking very good”.