Citigroup looks to be making headway in its efforts to build its investment banking franchise into the type of competitor that would make Macquarie, UBS and Goldman Sachs treat it as a serious rival.
Bolstered by a pick up in deal making, Citi is now ranked fourth on the Australian merger and acquisition league table, up from sixth for the same period in 2013, according to Bloomberg data. Pending and completed M&A transactions have reached $US52.8 billion so far this year in Australia, compared with $US28.2bn for the same period last year, according to Bloomberg.
In the initial public offering space, Citi was one of three co-lead managers of the $994.6 million share sale last week by Spotless, Australia’s biggest IPO in four years.
Citi has been on a mission since it lured Tony Osmond — head of investment banking for Citi in Australia and New Zealand — away from Goldman Sachs in July 2010, where he was head of M&A, natural resources and industrial investment banking in Australia.
It has sought to replicate the success of its successful distribution business across fixed income and equities into winning underwriting mandates for capital issuance and M&A advice.
There are signs that it’s working. After only ranking nineteenth in the Australian M&A league tables in 2011, Citi rose to tenth in 2012 before finishing last year ranked fourth among its peers, according to Bloomberg data.
Mr Osmond’s foresight in snatching Aidan Allen from UBS last year to become his second in command and head of general industries and financial sponsors has become apparent.
Mr Allen’s connections with private equity firms are paying dividends for the Citi investment banking franchise Down Under. Pacific Equity Partners used Citi on the Spotless deal and yesterday disclosed the company was advising it on its indicative, conditional and non binding takeover proposal for SAI Global that is worth as much as $1.1bn.
Mr Osmond and Mr Allen’s efforts to bolster Citi’s investment banking business have now well and truly caught the attention of their rivals.