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Capital Markets

Capital markets: What future for FIG?

Non-DCM FIG revenues have fallen sharply this year as clients remain focused on balance sheet housekeeping, and many rights issues have proven to be a tough sell. Is FIG turning into the preserve of the bond market bookrunners?

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It has been a tough year so far for FIG. Global FIG revenue is down 15% year-on-year, according to Dealogic, and there is little evidence of a reversal any time soon. As the business mix becomes ever-less diverse and pressure for mandates intensifies, there could soon be casualties among second-tier players.

FIG revenues have been falling steadily since the first half of 2014. They have also been sharply skewing away from equity and towards debt capital markets. According to Dealogic, in the first half of 2014 ECM business accounted for 21% of FIG revenues globally, for the first half of this year it was just 10%. The DCM equivalents have gone from 55% in 2014 to 61% today. M&A has risen from 16% of total global first half FIG revenue to 24%. 

“It’s been a slow year across the street for FIG in M&A and ECM,” says Brian Heyworth, global head of FIG at HSBC. “Banks and insurers have been shoring up balance sheets, so 2016 has been mainly about DCM.

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