THE New York investment bank Moelis & Company has accelerated its incursion into the Australian banking and stockbroking scene in dramatic fashion by signing up JPMorgan’s Andrew Pridham.
Mr Pridham, the departing chairman of JPMorgan’s investment bank, has joined John Steinthal, the former head of equities for UBS Australia, to spearhead the expansion of Moelis into corporate finance, equity capital markets, equities research, and sales and trading in Australia.
The firm will be 50 per cent owned by the New York parent, and prospective hirings will be offered equity in either or both. It will focus on agency or client business and plans to service the institutional market rather than private clients.
The chief executive of Moelis & Company, Ken Moelis, told Business-Day the market had become ”jaded” with the financial conglomerate model of investment banking and the time was now ripe for a new, strong and independent player in the Australian market.
”I had seen what Andrew [Pridham] had done in building the UBS franchise [in Australia]. He built it to last,” Mr Moelis said.
”I have had a handle on how successful the Australian business could be if you have the right people and the right franchise.”
The appointments of Mr Pridham and Mr Steinthal are sure to instil trepidation in rival investment banks and brokerages this week, as Mr Pridham has been one of the market’s pre-eminent deal-doers of the past two decades.
While the head of investment banking for UBS Australia and overseeing its present managers, led by Matthew Grounds, he had built the real estate trust business from scratch and presided over a swathe of large corporate transactions.
Roughly half of the property sector’s $14 billion in underwritten capital was raised by UBS, then known as Warburg, in the seven years to 1999, and much of it from Coles Myer.
In 2004 Mr Pridham was recruited to chair JPMorgan’s investment bank, reputedly on a $25 million deal over five years, and he brought a number of prominent clients with him, including the Westfield chairman, Frank Lowy. That business was unprofitable when he joined but now, according to sources, brings in revenues of about $250 million. Mr Pridham’s high price-tag may well have been covered by one transaction – a $25 million fee on a $1 billion capital raising for the property group Centro.
However, it was also Centro that earned more than $100 million in fees, but subsequently dented Mr Pridham’s reputation when it collapsed in the wake of the subprime crisis in 2007.
Moelis & Company counts Hilton Hotels and Yahoo! among its global clients and through the appointments of Pridham and Steinthal will look to add some blue-chip Australian corporate names to the list.