How Have Total M&A Deals Closed By Major U.S. Investment Banks Trended In The Last 5 Quarters?
Global M&A activity levels were depressed over the first nine months of 2016 due to an overall slowdown in global macroeconomic conditions. But with banks working through the strong pipeline of deals they created in late 2015, and with deal volumes recovering considerably in Q4 2016, the size of total deals closed for the quarter jumped to $936 billion from just over $800 billion in Q4 2015 and Q3 2016. This represents a 16% jump year-on-year as well as sequentially, and makes Q4 2016 the best quarter in terms of M&A deals completed in at least six years.
The chart below captures the total size of M&A deals completed by the five largest U.S. investment banks since Q4 2015. The green-to-red shading for figures along a row show the variations in deal size for a particular bank over this period.
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M&A advisory deal volumes for individual banks were taken from Thomson Reuters’ latest investment banking league tables. The table below captures the respective market shares for each of these banks over this period. The green-to-yellow shading for figures along a column should help compare the relative standings of these 5 banking giants in a particular quarter.
It should be noted that the largest M&A deals employ many investment banks, so the market share figures are not exclusive – explaining why total market share for these 5 banks is well above 100%.
Notably, Q4 2016 was one of the rare occasions when Goldman Sachs was beaten to the top spot in the list by one of its rivals. Goldman put up a strong showing for full-year 2016, though, with a market share of ~36% for the year compared to a figure of 31% for Morgan Stanley and 26% for JPMorgan. Morgan Stanley’s strong show in Q4 was almost completely due to its role as the sole advisor in LinkedIn’s acquisition by Microsoft.
Despite ranking below Morgan Stanley in terms of total deal size, Goldman grabbed the largest wallet share in the industry yet again – something we attribute to the fact that the latter usually acts as the lead advisor in the biggest M&A deals that close in a given quarter. You can see how changes to Goldman’s M&A advisory fees impact our price estimate for the bank by modifying the chart below.
See the links below for more information and analysis about the 5 largest U.S. investment banks:
- How Much In M&A Advisory Fees Did The 5 Largest U.S. Investment Banks Generate In 2015?
- How Much In Equity Underwriting Fees Did The 5 Largest U.S. Investment Banks Generate In 2015?
- How Much In Debt Origination Fees Did The 5 Largest U.S. Investment Banks Generate In 2015?
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