consolidation

ALSO NOTED: Goldman Sachs, Morgan Stanley estimates cut again; Countrywide must face shareholder suit; and much more...

Fri, 16 May 2008 06:59:50 -0400

Company News:
> Bullishness on Franklin Resources. Article
> Goldman Sachs, Morgan Stanley estimate cuts again. Article
> Bank of America's Ken Lewis sees consolidation ahead. Article
> Power outage shuts down ICE. Article
> Icahn declares war on Yahoo board. Article
> JPMorgan Chase makes room for Bear workers. Article
> Countrywide must face shareholder suit. Article
> Bank of America analysts raises Merrill Lynch price target. Article
> Merger buzz grows at E*Trade. Article

Regulatory News:
> E*Trade, CIBC fined by FINRA. Article
> Bernanke: Banks must manage risk better. Article

And Finally... Where debt woes really take a toll. Article

Consolidation in the PE industry

Mon, 03 Mar 2008 06:59:55 -0500

We all know that the private equity industry has entered a down cycle. But is it so bad that we'll see a lot of consolidation? It doesn't seem like any major firm is anywhere close to that level of trouble. Institutional Investor's website notes that David Rubenstein, co-founder of The Carlyle Group, has said recently that he thinks the current pause will give rise to some historic consolidation, akin to what happened in investment banking in the 1950s. That seems a bit dramatic. But it maybe that the top firms continue to grab the lion's share of the really big deals. He expects six to eight "brands," not all of which will be American.

For more:
- here's the item

Read more on: consolidation | investment banking

Buyside moving to tap more trading venues

Tue, 04 Dec 2007 06:59:54 -0500

We're witnessing an explosion in trading options these days that has led to growing concerns on the buyside about fragmentation and the thought that perhaps good trading opportunities are being missed. Fidelity Capital Market Services, the trading arm of the fund giant, has moved to provide broader liquidity sources to clients. According to Financial News Online, it has added 13 new partners to its platform. Clients now can access 17 third-party venues plus the firm's brokerage clients. So this is one way to effect a kind of consolidation. In effect, the firm has become a service aggregator. My suspicion is that the real value will be in the interface software that Fidelity can offer its clients. Lots of room for competition. A killer app could be born.

For more:
- here's the article

Read more on: Fidelity

New dark pool startup faring well?

Tue, 17 Jul 2007 20:01:34 -0400

Since the start of last year, the number of so-called dark pools has doubled to more than 40, according to Financial News Online. Obviously not all of these guys will survive. Most people are assuming that some consolidation will eventually take hold. But not until more services test the waters. The apparent success of two startups is a sign of the industry's growth prospects. LeveL--created by Citi, Credit Suisse, Fidelity Brokerage, Lehman Brothers and Merrill Lynch--launched late last year and is putting up some good numbers. You can say the same for Bids Trading, launched by 12 brokerage firms, also including Citigroup, Lehman and Merrill Lynch. The need to trade quickly, anonymously and in bulk is only growing. The NYSE launches MatchPoint next month.

For more:
- here's the article from Financial News Online

New indie research shop born

Thu, 31 May 2007 20:01:34 -0400

Since most Street firms agreed, as part of the much-reported global settlement, to separate research from banking, a cottage industry of independent research has formed. Recent estimates say 300 to 400 indie researchers are vying for buy-side business. Some of the product has been iffy and people have long been predicting consolidation, but there is room for innovation. Lawrence Margolis, who founded Gotham Research in 2001, is pushing what he hopes could serve as a viable model. His new website (www.streetbrains.com) will serve as a means through which the buy-side will be able to access relevant research. It's unclear what the revenue model is in detail. But most likely, the firm is counting on the willingness of more funds to pay non-soft dollar fees for research.

For more:
- here's the Investment Dealers' Digest article (for FierceFinance readers)

So you wanna start a bank

Wed, 14 Mar 2007 20:01:34 -0400

Consolidation in the banking industry has been a big story; the number of banks in the U.S. has fallen to 7,402 in 2006 from 14,411 banks in 1977. But just when you think that big-ness is taking over, community bank startups seem to be hot. In many cases, executives at much bigger banks are taking the entrepreneurial plunge. In California, the number of new banks being started is greater than the number of banks being swallowed up via mergers. There is a lot of diversity within this crop of startups. Some aim at an ethnic minorities, while others take advantage of the local geography. Some stats: Typically, you need $20 million to start. In the third year, you ideally ought to have $200 million in deposits and $150 million in loans. It's not impossible.

For more:
- here's a New York Times article

Another custodial deal, price too high?

Mon, 05 Feb 2007 19:01:35 -0500

We were all expecting more consolidation in the custodial services niche. Credit Suisse-advised State Street's deal to buy Investors Financial Services for $4.5 billion reflects that. The premium was on the high side at 38 percent. But State Street CEO Ron Logue told reporters that there were other bidders, and suggested that the premium will be worth it, though some analysts and shareholders are dismayed. The deal was necessitated in part by competitive pressure. The deal was inked just three months after Mellon Financial and Bank of New York dealed up, to form the industry's largest player. State Street will fall into second place, jumping JPMorgan Chase to third. There are not that many players left. It will be interesting to see what JPMorgan does. Stay tuned.

For more:
- here's an update from the AP

The LSE hits back at Nasdaq

Mon, 18 Dec 2006 19:01:38 -0500

The London Stock Exchange has responded to the hostile action of the Nasdaq with a document that makes clear its view that the Nasdaq's bid is not rich enough. It does not mention any competing bids or deals. But it does allude to joint ventures. It says that it is "exploring strategic options for cooperation and consolidation." Not sure what is meant by that. In addition, the CEO of the LSE has been doing some interviews. So a big PR effort is underway to scuttle the bid. This battle is likely to be determined by the hedge funds that are large shareholders of the LSE. Many of them piled in to score some quick gains. It's unclear what the Nasdaq can do from here. Takeover rules ostensibly bar it from raising its bid, which it termed final anyway. Stay tuned.

For more:
- here's a Financial Times update

Hedge funds face shortage of managerial talent

Wed, 15 Nov 2006 19:01:37 -0500

Contrary to popular opinion, not just anyone can run a hedge fund. That fact is presenting some problems for the industry. Big funds, especially, would like to hire managers with a track record, but they are few and far between these days. Talented managers often want to set up their own shop. Coupled with the fact that good managers command extraordinary salaries, hiring is getting to be a huge challenge. Automation is really only seen as a niche solution. We're likely to see some consolidation, though that might not really lessen demand for managers. The bottom line is that it is a great time to be a hedge fund manager--if you can stay ahead of your benchmarks anyway.

For more on this:
- Here's a Financial News Online article
- More hedge fund news

Will KBW be the latest bubble sensation?

Thu, 09 Nov 2006 19:01:36 -0500

Keefe Bruyette & Woods, priced its IPO this week, and the early (very)aftermarket activity was fairly strong. It trades under the ticker symbol KBW. The 430-employee investment bank has a strong niche--financial services--and seems poised to follow in the footsteps of other boutiques that have fared well. Evercore is a good example. But success is far from guaranteed. The financial services industry has certainly generated its fair share of deals. And most expect a bit more consolidation, especially among regional players. That bodes well. Then again, a lot of people felt really good about the Lazard offering as well.

For more on the offering:
- Here's an article from TheStreet.com