In each of equity and debt capital markets, syndicated loans and M&A advisory, Truist Securities ranked higher than its super-regional peers in 2023, according to Dealogic. For its consistency and the progress it has made since the merger of SunTrust and BB&T that created the firm at the end of 2019, Truist wins the award for the US’s best super-regional investment bank this year.
“We have the funding base and the talent base to be consistent in the market, and what I am most proud of is that we could see that this consistency was valued by clients in 2023,” says Tom Hackett, chief executive of Truist Securities since taking over from John Gregg in March 2023. Hackett has been at the firm since 2008, previously as COO.
For platforms like Truist’s, with solid and stable backing from the wider group, down-cycles are opportunities to take market share. And while Hackett says the franchise is very much a growth story, he says it is also still in building mode.
There is still work to do on the markets side, for instance, given that revenues in Truist’s trading business are probably only about a third of what they are in investment banking. That is no surprise: banks building businesses tend to start with issuers and build distribution, and then add products and services for investors.
Many of the bank’s core product areas were up substantially; leveraged finance, ECM, public finance and project finance all showed meaningful growth. Hackett argues that the bank has had the capacity to invest in teams in a way that not all peers have been able to do.
Some of the efforts to broaden the focus of the franchise have resulted in striking shifts. The bank is taking share in M&A and DCM, but while five years ago practically all of its M&A advisory work would have been sell-side mandates for owner-operators of firms, in 2023 it was about 40% buy-side mandates for public situations.
“Our M&A franchise is multiples of where it used to be,” says Hackett. “When you are building a franchise, M&A is a really good barometer of the market share and the mindshare that you are taking.”
Where that shows up is in the seniority of role, rather than the pure volume of deals the bank has been involved in. Stripping out self-led transactions and explicitly non-lead advisory roles, Truist in 2023 ranked 23rd overall in completed M&A involving US targets, making it the leading super-regional on that basis, according to Dealogic. But its market share of such mandates was more than triple what it had been in the past, because it is getting on bigger deals.
Among the super-regional banks, Truist has ranked top for ECM bookrunner mandates since 2019. In 2023 it did again, securing roles on big deals such as the $1.8 billion sell-down of shares in Agilon Health by Clayton Dubilier & Rice, or the $1.7 billion convertible bond for energy utility Southern Co.
Among the super-regional banks, Truist has ranked top for ECM bookrunner mandates since 2019. In 2023 it did again
In DCM, the bank also ranked top, even excluding self-led deals and just ahead of its biggest DCM regional rival, US Bancorp. Its biggest deal was the $6.5 billion four-tranche bond from UnitedHealth Group, which saw six-, 10-, 30- and 40-year paper sold.
But a deal like that boasts a raft of banks on the top level. More notable perhaps were mandates like the $3 billion two-tranche deal for Enbridge, where Truist was one of five firms leading the trade, which included a 10-year sustainability-linked tranche. The deal was an example of how the bank’s energy practice stood out in 2023, although healthcare was another highlight.
Showcasing the bank’s asset-backed capabilities were auto finance deals such as a $1.2 billion securitization for CarMax that was led by Truist alongside Barclays, BofA Securities and RBC Capital Markets. Or a $776 million World Omni deal, where it was alongside BofA Securities, JPMorgan and MUFG.
But Hackett says that at Truist today there is much more to the business than the typical flow credit card and auto business.
“Our ABS business has grown dramatically, particularly in the more esoteric areas like speciality finance and rentals, and there is rarely a transaction that we are not leading or playing a meaningful part,” he says.
Deals included a $1.1 billion green ABS for Vantage Data Centers and a $637 million deal for Dell, among many others. The bank had a 1.3% market share in US ABS in 2023, up from about 0.2% in 2019, and its share of esoteric deals has climbed by more.
The environment was already uncertain going into 2023, and the regional banking turmoil in March only added to that. But Hackett is pleased with how the bank was able to stay on track.
“We went into the year with so many uncontrollables in the broader environment, so we said let’s focus on what we can control and not let a tough environment interrupt morale,” he says.
