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Macquarie Group Ltd. (MQBKY, MQG.AU), in a move to revitalize its investment banking business with private equity clients, named Jorge Mora senior managing director and head of its U.S. financial sponsors practice within Macquarie Capital.
Mora is a former managing director in financial sponsor banking at UBS (UBS), where he worked for eight years until 2008 with clients including Blackstone Group L.P. (BX), Kelso & Co., and Providence Equity Partners. Most recently he was head of financial sponsors for Lazard Ltd. (LAZ). He has also had stints at Donaldson Lufkin & Jenrette and The Exxel Group.
Australia-based Macquarie is building its financial sponsors group with the expectation that demand from private equity funds for investment banking will pick up when the current market uncertainty lifts. Macquarie, known as the largest infrastructure fund manager globally, with more than 30 funds managing 97 infrastructure assets across 23 countries, has also made use of the disruption from the financial crisis to build its investment banking business in the U.S.
The firm also hired William Baumgart, a former UBS and DLJ colleague of Mora's, to join as managing director in its financial sponsors group. Baumgart was most recently head of financial sponsors at Citadel Securities.
Financial sponsors as a group are among Wall Street's most lucrative client bases. They paid $7.4 billion in investment banking fees in the first half of this year, up 74% from last year as the deal markets rebound. Financial sponsors contributed 18% of overall investment banking fees, according to Dealogic.
J.P. Morgan Chase & Co. (JPM), Bank of America (BAC), and Goldman Sachs Group Inc. (GS) rank as the top three in fees from financial sponsors in the first half of the year, according to Dealogic, taking in 28% collectively of fees paid by sponsors.
Robert Redmond, vice chairman and head of U.S. corporate finance at Macquarie Capital, said in an interview that the firm's willingness to invest equity directly to facilitate client transactions is what sets it apart from its U.S. bank competitors.
For example, earlier this year Macquarie advised Cumulus Media Inc. (CMLS) in its merger with Citadel Broadcasting Corp., and provided $250 million in equity financing. UBS, which was Cumulus's lead financial adviser, committed to debt financing.
Banks typically provide the loans and debt financing for client transactions. And U.S. banks face stricter rules for investments in private equity funds following the financial crisis.
Mora began working at Macquarie two weeks ago. Some of his past deals include advising Rowland Coffee Roasters Inc. in its $360 million sale to J.M. Smucker Co. (SJM) in May, advising selling shareholders in Net-a-Porter's $530 million sale to Richemont last year, and advising Blackstone and One Equity Partners in their $4.3 billion acquisition of Travelport in 2006.
-By Liz Moyer, Dow Jones Newswires; 212-416-2512; email@example.com