MALCOLM MAIDEN: Matthew Grounds and Alastair Lucas, the corporate crashes and scandals that adopted the 1990s boom led to tough new rules of engagement for securities marketplaces players and companies. You head up the Australian investment bank advisory businesses of UBS and Goldman Sachs JBWere, respectively, big global investment bank combines that also trade, lend and spend money on the markets. From your vantage point, is the idea of a global, one-stop-investment banking shop as attractive now as it used to be before the regulatory changes?
Are the shop firms that concentrate on merger and acquisition advice more practical? MATTHEW GROUNDS: Global investment banking institutions and boutiques offer different services, and almost always there is room for both. Boutiques can’t offer all the assistance and do not say that they actually, but there’s always going to be always a place on their behalf.
I don’t believe that there surely is whatever has happened on the market which has really had an impact on that. ALASTAIR LUCAS: We’ve used the US restrictions: the border between investment banking and research is greater than it was before, for example. But by the end of the day, the investment banking part and the trading aspect of a built-in investment bank or investment company are available of buying and offering securities. That’s all a takeover is: takeover offence is buying securities and takeover defence is offering securities, so we’re not finding as an integrated bank or investment company is a disadvantage.
Relationships remain the key to the business, whether you’re a store or a bank or investment company – but we think it’s an advantage to have market makers as part of our team. MAIDEN: Peter Hunt and John Wylie, you lead two of our best-known shop advisory homes, Carnegie Wylie, and Caliburn – do you agree with the fact? PETER HUNT: Boutiques will always be part of the Australian landscape, back from the birth of investment bank in the ’70s.
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But, when we started Caliburn seven years and discussed self-reliance ago, a number of corporates would think it is quite difficult to comprehend why self-reliance, of itself, was a competitive benefit. GROUNDS: Peter, I have no idea any investor who’s run the invest-ment banking business of UBS in Australasia. LUCAS: And I could assure you Hank Paulson (global mind of Goldman Sachs) is an invest-ment banker. JOHN WYLIE: But Jon Corzine was operating Goldman before him, and he was a investor.
PETER HUNT: And with Hank Paulson departing Goldman to be US Treasury Secretary, his likely successor, Lloyd Blankfein, does come from the trading table. GROUNDS: But what exactly are these issues you refer to? WYLIE: I could try that. The current model of the global investment bank or investment company was a product of the early stage of the global-isation of the financial markets.