Chillin' out till it needs to be funded
When Ken Griffin downed shutters last week, it was not clear to close watchers what would happen to the top ranked Investment Banking unit at Citadel as it evaluated its business in the light of new regulations. The team of 25 people led by Brian Maier, seemingly reported in at Wells Fargo tonight. Wells Fargo itself bought Wachovia with a $200 bln mortgage book and has not been losing money on those very suspect mortgages which forced Wachovia tto sell itself in 2008 a week after Lehman. Now Brian Maier and team will make a fresh start for the bank in Investment Banking and build fee based lines
The volume of deals in July has hit an all time high after a precarious low in June with $140 bln in deals in the US alone with nearly a 1000 deals, google also chancing its arm, picking up Motorola’s handsets business from the company split planned since 2010
With Cash rich Kraft forking away from its US groceries business and McGraw Hill looking to rationalise its business portfolio, the cash rich corporates are soon being challenged by the have nots looking to unlock value from their large diversified businesses. A lot fo large deals have been struck at the global level but none except the Deutsche Borse deal have yet passed muster and valuations are already ratcheting higher than investors can afford them, making it a very short honey moon for M&A
(Sorkin’s Dealbook)Citadel founded its unit in late 2008 in an effort to capitalize on the weakness of investment banks as a result of the financial crisis. The firm hired senior bankers from Wall Street for the practice, but from early on the effort was plagued by high-level departures. In 2009, the investment banks came roaring back to profitability, which also stymied business opportunities for the Citadel unit.
In addition to Mr. Maier, former Citadel executives Stephen Gerson, Aviv Laurence, Paul Pepe and Stavros Tsibiridis will join the investment bank practice at Wells Fargo, the statement said.