How Latin investment banking just got bigger
The region’s rapid growth is changing the investment banking landscape beyond recognition as the fee pool grows. How are the major international firms tackling the opportunities, and which new products are creating the biggest buzz?
EXACTLY A YEAR ago, Merrill Lynch CEO Stan O’Neal asked Jim Quigley to take charge of the bank’s Latin American business. It was both a statement of intent and a recognition that things needed to be shaken up in its Latin American franchise. Quigley is a Merrill Lynch stalwart who has spent his entire career at the bank and is one of its senior executives.
He set about overhauling a global markets and investment banking business that was relatively successful in the region but limited in its scope. The firm’s standing in debt capital markets was well established. In May 2005 it was one of the international advisers on Argentina’s record-breaking restructuring of its defaulted debt. The bank was one of the pioneers of securitizations, subordinated debt and perpetual bond deals. From a geographical standpoint, Merrill Lynch was competitive in Brazil and Mexico. But beyond these core products and markets, the US bank lagged behind certain rivals that had a much more comprehensive investment banking service. It was, for example, missing opportunities in principal finance, real estate and even equities and M&A.
Quigley engineered a big reorganization of the bank’s Latin American business.