The Biggest Winners and Losers of Monday’s Acquisition Craze
M&A activity has been slow this year, particularly as of late. Global M&A revenues were down nearly 10% during the first half of 2013, marking the worst six months of activity since the same period in 2009. Then Monday night happened.
The $130 billion Verizon/Vodafone deal paired with Microsoft’s $7.2 billion acquisition of Nokia's phone unit put smiles on the faces of a host of U.S. investment bankers. Labor Day wasn’t nearly as kind to several European bankers who were locked out of the deals. Hedge funds that were blindsided by the moves had an equally difficult holiday weekend.
U.S. investment banks Goldman Sachs, Bank of America Merrill Lynch, J.P. Morgan and Morgan Stanley each advised on the Verizon deal, one of the biggest of all-time. Total fees on that deal alone could reach $500 million, according to the Wall Street Journal.
Meanwhile, J.P. Morgan advised Nokia on its transaction, while Goldman Sachs partnered with Microsoft. The U.S. banks cemented their positions as the top four advisors on Wall Street with the deals, leaving most European banks in the dust. Barclays and Guggenheim Partners, which also advised on the Verizon deal, made huge moves up the M&A league table. Guggenheim Partners moved from 42nd position to 10th.
Still, the biggest losers weren’t the bulge bracket banks that missed out on the deals. They were the hedge funds that didn’t see them coming. An eye-opening 12% of Nokia shares were on loan to short-sellers, who took a bath on their investment when the stock jumped by more than 50% before leveling out slightly. Reuters speculates that hedge funds could have lost as much as $840 million so far.
If you’re venturing into the job market at the tail end of the year, and potentially sacrificing accrued and deferred bonus payments, you should be sure that your services are in demand. Here are where the jobs will be for the remainder of 2013.
Two gigantic Chinese IPOs that combined to raise roughly $44 billion were advised by banks that hired the relatives of high-ranking Chinese officials. But the question remains: did the banks do anything wrong?
“The vast majority of middle office and back office interns tried to make the move into a front office role,” said our intern mole. “No one succeeded.”
Blackstone has an in-house shoe shine person. Perry Capital has a barber shop and an on-site chef. SAC Capital has an in-house psychiatrist/trading coach. Just a few of the perks that come with working in the hedge fund world.
A 45-year-old senior financial analyst writing under a pseudonym is dishing out life lessons for Wall Street “sugar daddies” and the younger women who date them. Among the vomit-inducing pieces of advice: “Sugar daddies should not put anything in writing relating to compensation.” Ugh.
Speculation that former Zurich Insurance chairman Josef Ackermann may have been partly responsible for the apparent suicide of the company’s Chief Financial Officer, Pierre Wauthier, will likely forever scar Ackermann’s legacy. “He’ll be seen either as a bad guy who forced a person to suicide, or someone who couldn’t push through what he wanted,” said one analyst. “This will limit his job opportunities to companies that wouldn’t normally have come into question.”
Buzz Around the Office
Arizona State is known as a party school. Just two weekends into the fall semester, ASU may have cemented that legacy. Nearly 900 students have already been arrested this school year.
List of the Day: Startup Interview Questions
If you are interviewing at a startup, expect different types of questions. Here are three that are common in the startup world.
- What do you want on your resume in two years?
- Could you live here?
- What is your dream job?