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Best Emerging Markets Equity House: Goldman Sachs |
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Also nominated: Morgan Stanley, Credit Suisse and Deutsche Bank |
Goldman Sachs was not just present on a large number of high-profile equity offerings in the emerging markets this year – it led many of them and executed effectively in wild times.
With heightened index volatility as a result of a dizzying array of global macroeconomic threats, navigating the equity capital markets was a challenge in both developed and emerging markets.
“I think the diversity of what we have done by country and by sector, not just in IPOs but also in blocks, follow-ons and secondary deals, marks us out from our competitors,” says Matthew Westerman, co-head of investment banking at Goldman Sachs for Asia Pacific ex-Japan, who until earlier this year was global head of equity capital markets.
Among landmark transactions led by Goldman Sachs in the emerging markets were the IPOs of Prada, Yandex and BTG Pactual, as well as a number of accelerated equity and equity-linked transactions including the $2.5 billion block trade for ICBC, the largest ever sole-bookrunner block trade in Hong Kong.
Goldman also carried out the biggest-ever capital raising by a solely onshore corporate in South Africa, for Shoprite, and the first-ever publicly distributed convertible bond in Brazil, for Minerva. The global reach of the bank’s emerging market franchise was probably best demonstrated by the international listings, beyond their home markets, of Prada, Yandex and AVG.
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“The diversity of what we have done by country and by sector, not just in IPOs but also in blocks, follow-ons and secondary deals marks us out from our competitors”
Matthew Westerman, co-head of investment banking at Goldman Sachs for Asia Pacific ex-Japan |
In Asia, where competition in equities remains fierce, the bank won leading roles on some of the largest transactions in a difficult year. Granted, that could also be said of a host of other banks, as the number of banks present on certain deals became near-ridiculous. But Goldman, along with the other shortlisted banks, was lead, co-lead or global coordinator on many of the largest transactions. Deal highlights for Asia included the $2.5 billion IPO of Prada, the first luxury brand to be listed in Hong Kong and the largest Hong Kong IPO of 2011; the $2.5 billion IPO of Shanghai Pharmaceuticals, the largest ever healthcare IPO in Asia ex-Japan; and the $2 billion flotation of Chow Tai Fook. In Asia in particular the block-trading and follow-on businesses have propped up the wider equity capital markets in recent times. Goldman was involved in many such deals, notably ICBC’s $2.5 billion accelerated bookbuild offering and the $6 billion AIA follow-on offering.
In emerging Europe, the Middle East and Africa, deal highlights include the $1.4 billion IPO of Yandex, the third-largest-ever internet deal globally, and the $1.9 billion IPO of JSW. Goldman’s geographic reach in the region was impressive: it acted for the largest issuers in the largest markets in EMEA, such as Russia, Turkey and South Africa. Its impressive performance last year is backed by the opening to this year, with Goldman ranked number one year to date, with a market share of 15% in the region.
Westerman concedes that in terms of its global emerging market equity franchise, Latin America is where the bank still has most work to do. Historically it has lagged behind rivals such as Credit Suisse and UBS in the region. However, Westerman says that although this might still be the case, it is closing the gap. Goldman tends to serve as joint bookrunner on deals in Latin America and will be hoping to get onto some tickets as joint global coordinator or sole lead to further strengthen its presence in the region.
Most notably in Latin America over the period of the awards, Goldman served as joint bookrunner on BTG Pactual’s $1.7 billion IPO: the first independent investment bank offering in Brazil. It also served as joint bookrunner on Qualicorp’s $678 million IPO, the largest-ever sponsor IPO in Brazil and the largest healthcare IPO since before the start of the global financial crisis. It then secured repeat business in the form of Qualicorp’s $412 million follow-on, the first, largest and best-performing follow-on offering of this year.
Morgan Stanley was almost as impressive as Goldman Sachs in global emerging market equities this year, leading 32 transactions and raising total volume of $9 billion.
Indeed, but for a slight slip down the league tables this year by Morgan Stanley, it would have been almost impossible to choose between the two US houses. Both were on most of the marquee deals of the year and Morgan Stanley led more than its fair share. In the end, Goldman’s consistency throughout our awards period is what tips the balance in its favour.
