Goldman Sachs Group Inc. has lost its ranking as the world’s top mergers and acquisitions adviser for the first time in five years.
(Bloomberg) — Goldman Sachs Group Inc. has lost its ranking as the world’s top mergers and acquisitions adviser for the first time in five years.
JPMorgan Chase & Co. has taken its spot as the No. 1 M&A adviser globally so far this year, with credit on $284 billion of deals translating into a 22.5% market share, according to data compiled by Bloomberg. Goldman fell to the second spot, with a role on $237 billion of transactions giving it an 18.8% market share.
The last time Goldman ranked second for any half-year period was in the first half of 2018, the data show.
Global deal volumes have fallen 42% this year to $1.3 trillion in one of the worst periods for M&A in the last decade. Banks that ramped up hiring in 2020 and 2021 amid a surge in dealmaking are now grappling with sharp declines in fees.
That’s triggered major headcount reductions across Wall Street, with Goldman recently starting job cuts that will see 125 managing directors across different parts of the bank lose their jobs, Bloomberg News reported this month. The moves are part of a deep cost-savings drive at the bank, which has seen at least three rounds of job cuts in less than a year.
Dearth of Megadeals
Valeriya Vitkova, a senior lecturer at City University of London’s Bayes Business School, said there have been fewer megadeals, which can impact league tables.
“We have seen a structural shift in the type of M&A deals that get announced,” Vitkova said. “It would be interesting and important to see whether this is a sustained drop over the coming months and years or whether this is just a temporary shift.”
Given the sharp decline in overall deal volumes, league table rankings may be less illustrative than in a robust year. And Goldman could still climb its way back to the top ranking by the end of December, as it’s done in the past.
While its deal tally trailed Morgan Stanley’s by $13 billion at the mid-year in 2018, Goldman easily leapfrogged its competitor to regain the top spot for the full year. In fact, there have been only three times in the last two decades when Goldman wasn’t No. 1 globally for a full year, Bloomberg-compiled data show.
Representatives for Goldman and JPMorgan declined to comment.
Other banks have also seen their fortunes shift this year. Guggenheim, which ranked 57th for full year 2022, soared to 9th place. That’s thanks to its role advising Pfizer Inc. on the biggest takeover globally this year, the $43 billion acquisition of cancer drugmaker Seagen Inc. Centerview Partners, which advised Seagen on the deal, jumped nine spots.
“A change in the league table ranking could indicate a reduction in the M&A advisory business that a given bank is engaged in and this can weigh on the bank’s revenues as well as profits over the near future,” Vitkova said. “And this would be something that senior executives are likely to focus their attention on.”
–With assistance from Fareed Sahloul and Ben Scent.
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