competitors

Bonus pool 2007: Goldman Sachs dominates

Mon, 19 Nov 2007 06:59:57 -0500

It's not just that Goldman Sachs has fared really well. It's that it has done so when its competitors are really struggling. The bonus pool tells the story. This year, by one estimate (Options Group), the collective bonus pool at the top five firms will be $38 billion. Of that amount Goldman Sachs will split $20 billion, or 53 percent. Last year, it took home about 45 percent of the collective pool. This year, we'll see a lot of variation in bonus payouts. So it matters where you work and what you do. Fixed-income folks will suffer the most. Managing directors in MBS could see declines of up to 60 percent. Commodities folks will fare better.

For more:
- here's the CNBC article

Related articles:
- Goldman Sachs influence expands
- Goldman Sachs stands alone ...for now
- How Goldman envy felled Merrill Lynch

Sallie Mae saga continues

Fri, 12 Oct 2007 06:59:56 -0400

Sallie Mae announced a third-quarter loss of $344 million that seems to confirm what the banks and J.C. Flowers said about the effect of new legislation. But Sallie Mae chairman Albert Lord seems to be sticking to his guns. The company contends the new subsidy-reducing law will weed out competitors and actually help Sallie Mae. Most interestingly, Lord told reporters that that he has fielded other inquiries, suggesting that there may be other possible buyers out there. Unfortunately for him, he is not able to discuss a deal with any of them, per the current negotiations. It's anybody's guess where this goes from here. I still think a compromise of sorts is in order, not that the warrants offered by the pursuers is a good idea.

For more:
- here's an AP article

Related articles:
- Behind the Sallie Mae standoff
- Sallie Mae deal to be canceled?

The return of strategic deals?

Wed, 08 Aug 2007 06:59:56 -0400

The popular idea now is that the Golden Era of private equity has ended. And with that comes the notion that strategic buyers will reassert themselves. It makes a lot of sense. Many companies have been hoarding cash, and that can be used as currency. Remember that all-stock deals can be structured as tax-free swaps. Financial Week offers a list of companies with a lot of buying power built up. ExxonMobil, for example, holds 2.4 billion shares of its own stock, with a market value $200 billion which would be enough to buy top competitors. If we see this emerge as a trend, it will hearken back to the previous deal boom, back in the 1999-2000 period, when stock swaps were all the rage. Cash deals will have a hard time, and you can count on the percentage of sponsor-backed deals to fall from the 40 percent it hit in the second quarter.

For more:
- here's the article from Financial Week

Surprise. The top merger advisor really is...

Mon, 06 Aug 2007 06:59:57 -0400

We noted recently that when it comes to financial sponsor-backed IPOs, the choice of underwriter seems to be significant in terms of performance. UBS, somewhat surprisingly, fared the best. Now, The New York Times takes a look at whether advisors matter when it comes to strategic deals. It commissioned a study to look at the returns of companies that made acquisitions in 2002-2005. Surprisingly, neither Goldman Sachs nor Morgan Stanley racked up the biggest gains, despite their dominance in the league tables. The winner was another surprise, Deutsche Bank, whose clients outperformed their sector competitors by nearly 30 percent vs. 6 percent for Goldman Sachs. It may be that Deutsche Bank has had significantly fewer deals--no one really thinks of it as an investment banking powerhouse--such that a few winners can really swing performance. In any case, it is something that competitors of the big two can make hay with in the market.

For more:
- here's the article from the NYT

SPOTLIGHT: Portal

Fri, 03 Aug 2007 06:59:52 -0400

In the important battle over private placements, the Nasdaq scored a minor victory when the SEC approved its plans for Portal service. Lots of other competitors are bent on market domination, including Goldman Sachs, whose GStRUE has made a splash. Brief (Financial Week) | Meanwhile, the NYSE's earnings beat estimates but that has hardly calmed the worries. Article

Stock exchanges mull future, Lehman launches LX

Fri, 27 Jul 2007 06:59:55 -0400

The Financial Times astutely notes some of the big macro trends driving the exchange business these days. With all the exchanges going public, the "members clubs" of course are no more. Indeed, membership doesn't seem to carry much cachet at all. The new power players are shareholders, to whom management is beholden. So that leaves members feeling a little on the outs, and they have voted with more than their feet. Increasingly, banks are looking for ways to get around the exchange. The rise of dark pools of liquidity is a good sign of that. Lehman Brothers has launched its Liquidity Cross (or LX) service, and the reception among customers seems good. The NYSE and Nasdaq have moved to enter this market but there are lots of competitors. What about direct exchange links to customers, like mutual funds and pensions? Well, U.S. rules for now prevent this, the article notes. But in Europe, the idea is hot. It may or may not happen. But it tells you a lot about the state of the exchange industry.

For more:
- here's the item from The Financial Times

Jockeying in the interest rate derivatives market

Thu, 14 Jun 2007 20:01:35 -0400

Credit default swaps have made a lot news for their heady growth. Indeed, the market had a nominal value of $34.5 trillion last year. But that's small compared to the interest rate derivatives market, which was valued at $285 trillion last year. Globally, that has draw in lots of competitors and put a lot of pressure on margins. And in recent years anyway, there have been signs that profits from equity and credit derivatives were much stronger. So there's a lot of pressure, which has companies scrambling a bit. Merrill Lynch seems intent on building up and has made a few choice hires from Deutsche Bank. There's been a lot of recruiting and raiding.

For more on Merrill:
- here's an article from Investment Dealers' Digest (for FierceFinance readers)

Reuters to finally top Bloomberg?

Sun, 20 May 2007 20:01:37 -0400

One of the more fascinating stories over the years has been the bitter battle for desktop space on Wall Street. Bloomberg has emerged as the apparent winner, besting a host of competitors, including Reuters. Traders swear by their Bloomberg terminals. But with the Reuters-Thomson combination, is Reuters finally ready to get back into the game? Breakingviews.com doubts that the merged company will be able to mount a huge offensive anytime soon. Bloomberg terminals just offer so much through its boxes. It will take a while for anyone to put together comparable content delivered so efficiently. That may be something of an advantage--if it can put together a cheaper a la carte service. It will be fun to watch. You can bet Bloomberg is not taking this lightly.

For more:
- here's the article from Breakingviews.com

Talent defections cause for worry at more firms

Wed, 09 May 2007 20:01:38 -0400

Poaching from your competitors is a time-honored practice in financial services, from stock brokers all the way up to M&A kingpins. A lot of legal hours have been--and will continue to be--purchased. There is a sense that the big names can bring over the clients. And many firms take steps to prevent this. Many have "garden leave" agreements for outgoing executives, during which they are barred from contacting colleagues or clients. This is paid leave of course. It basically gives firms an opportunity to limit whatever damage they fear. However, many will argue that most institutions, notably financial sponsors, are pretty loyal to banks, less so to humans. In a sense, the game has become more commoditized and less personality-driven. So a big name doesn't guarantee clients anymore.

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

Community banks on the rise?

Wed, 09 May 2007 20:01:35 -0400

Fortune notes that the FDIC added 191 new banks and savings entities in 2006. That's about double the number in 2002. Of course, the big boys dominate the industry in terms of assets. But community banks still constitute about 93 percent of all domestic banks. Publicly traded community banks have fared exceedingly well; many are seen as merger candidates. Behind a lot of this activity are private equity and hedge funds that have identified the niche as a lucrative one. The key seems to be finding a niche, whether ethnic, business or other, and then exploiting it to the fullest. Collectively, these guys have emerged as real competitors for the big national and regional banks--who will have to pay up to buy them.

For more:
- here's the Fortune article