Infrastructure mergers and acquisitions advisory, once the exclusive realm of large, global investment banks like Goldman Sachs, Morgan Stanley and Macquarie, is quickly becoming a more retail profession.
In February, Kevin Carney, a former executive director in JPMorgan’s Infrastructure Advisory team in New York, officially launched his own firm – Infrastructure Capital Advisors – to carry out the same work on his own.
“I’m able to provide my clients with a more customised service,” Carney, who left JPMorgan in December, told InfrastructureInvestor.
Those clients include the Port of Corpus Christi in Texas, which is seeking investors to develop a 1,100-acre multi-use cargo terminal, and CenterPoint Properties, which is seeking to lease the assets of the Port of Virginia for 60 years.
Both transactions originated while he was still at JPMorgan and Carney is working alongside JPMorgan in advising those clients. He was one of the founding members of JPMorgan’s infrastructure advisory team, which is headed by New York-based Paul Ryan.
Carney isn’t the only infrastructure investment banker to leave the bulge bracket. In late March, Rob Collins, the head of infrastructure investment banking for the Americas at Morgan Stanley, left the firm to join boutique investment bank Greenhill & Co. At Greenhill, he will head the firm’s advisory effort for infrastructure in the Americas. His first day at the firm will be Tuesday, 23 June.
And in February, boutique investment bank Evercore Partners announced that it had tapped George Ackert to establish and lead its transportation and infrastructure practice. Ackert, who is based in New York, previously led the same group at Merrill Lynch. His signature infrastructure transactions at Merrill included the sale of Dakota, Minnesota and Eastern Railroad to Canadian Pacific Railway in October 2007 for $1.48 billion.
For other investment bankers considering the same move, boutiques like Greenhill and Evercore offer the prospect of fewer conflicts of interest than large global investment banks due to their more limited scale of activities. More limited activities, though, can translate to fewer global resources and a smaller footprint than that of the big banks.
Infrastructure investment banking, like the asset class itself, has remained a resilient source of cashflows for many large investment banks despite the downturn in the economy.
At Macquarie Capital, long regarded by many as the leader in the field of infrastructure principal and advisory, infrastructure was the sole industry vertical to record “solid advisory activity,” according to an annual results presentation. Macquarie advised on 66 deals globally valued at approximately A$95 billion (€53 billion; $70 billion). The only other vertical to come close was resources, with 90 deals valued at A$69 billion. Macquarie described all other verticals as having “reasonable advisory activity”.
As others are trying to build out their infrastructure advisory platforms, Macquarie is broadening out beyond it. The firm has been busily hiring former investment bankers from Lehman, Goldman and Morgan Stanley with expertise in areas such as media, financial institutions and energy. Its North American investment banking business made all of these hires in an effort to grow its business beyond infrastructure.