Healthcare investment banking revenues are not immune to the slowdown to hit banks' M&A divisions this year, but firms on Wall Street are still competing for senior bankers even as front office hiring slows elsewhere.
One of the latest examples is Vincent Lozada, a managing director within Credit Suisse's healthcare M&A team who has just been hired by RBC Capital Markets. Lozada worked at Credit Suisse for over nine years, but only switched into healthcare investment banking when he joined the Swiss bank in 2007.
Before this, he worked in a business development role at NBCUniversal for a year. He originally left banking for a corporate role after working in technology investment banking at Bank of America between 2004 and 2006.
Global healthcare M&A volume was down to 1,895 completed deals with a total value of $250.6bn over the first eight months of this year (69% of which was in the U.S.) compared to its record levels of 2,109 completed deals with a total value of $473bn over the same period the previous year (82% of which was in the U.S.). The global year-to-date healthcare IB revenue of $4.1bn is not on pace to match last year's net revenue of $9.7bn.
That said, it's still doing relatively well. This has prompted a number of senior investment bankers in the sector to move.
Last month, Michael Muntner, the former co-head of the Americas healthcare investment banking group at Credit Suisse, left to join Centerview Partners. He'd spent 16 years at Credit Suisse. Before that, he'd taken time out of the industry as a VP of strategic planning at Hanger Orthopedic Group.
Stuart Smith, head of healthcare investment banking at Credit Suisse, also left the bank to join Centerview. Credit Suisse has plugged the gap by promoting David Kostel and Punit Mehta to as global co-heads of its healthcare investment banking team.
In March, Barclays poached Deutsche Bank's top healthcare bankers in the U.S. – Jason Haas and David Levin. Haas is now managing director and head of Americas healthcare, while Levin is managing director and co-head of healthcare M&A
Here are the current leaders in the U.S. healthcare sector based year-to-date investment banking revenue, according to Dealogic data:
Compare that to Dealogic's global healthcare investment banking revenue for 2015:
The banks that have the same ranking on both lists include J.P. Morgan in the top spot, Citi in fifth place and Credit Suisse in eighth. The ones that were stronger on the 2015 list compared to the 2016 year-to-date ranking include Goldman Sachs, Morgan Stanley and Deutsche Bank. The banks that are on pace to be stronger this year compared to last year include Bank of America Merrill Lynch, Barclays, Jefferies and Centerview Partners.
"There is movement within healthcare IB from life sciences and healthcare technology-oriented companies to healthcare services, most specifically in the managed-care/acute space," said Cesar DeLara, a senior consultant in the investment banking practice at Selby Jennings. "This movement has led to a surge in the need for healthcare-services bankers and is an opportunity for senior bankers with strong relationships to move to a boutique and make a name for themselves."
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