By Ross Kelly
U.S. investment bank Houlihan Lokey said Tuesday it has opened
an office in Australia, hoping to fill a gap left by rivals that
are slimming their operations Down Under as the local economy
slows.
In its first major investment in Asia in four years, the Los
Angeles-based firm--which typically advises on merger and
acquisitions deals under US$5 billion--said it hired three senior
staffers from CIMB Group Holdings Bhd. to jointly head up the
operation, located in Sydney.
They include Nicholas Rowe and Oscar Ludwigson, CIMB's former
Australian country chief and head of investment banking,
respectively. Also joining is former CIMB senior banker David
Tozer.
The office will have nine professional staffers including the
three heads.
Its launch comes as other overseas-based investment banks depart
Australia, where a decadelong economic boom fueled by high
commodity prices is fading as demand from China cools. Royal Bank
of Scotland International--the former international division of
Lloyds Banking Group PLC--and Royal Bank of Scotland Group PLC have
also sold their Australian business units in recent years.
"The economic malaise in Australia has certainly dampened the
pull factor, but there's still push factors that are driving
companies in places like the U.S. to look abroad," Mr. Ludwigson
said in an interview. Lures include a rapid decline in the value of
the Australian dollar, he said, which makes targets in Australia
cheaper to buy. There is also a large amount of capital washing
around that is looking for a home, while Houlihan's restructuring
business provides some diversification in the market, he said.
"The market's slowing down here a bit, but at the same time
there's some places where people are seeing value," said Mr. Rowe,
who pointed to the recent takeover bid for engineering company
Bradken Ltd. by private-equity firms as evidence that deals are
still being pursued. Bain Capital LLC and Australia's Pacific
Equity Partners have offered to buy the company for close to US$800
million.
Houlihan will be hoping to emulate the success of U.S. rival
Moelis & Co., which opened an Australian office in 2009 after
hiring bankers from firms including UBS AG and J.P. Morgan Chase
& Co. Since then, Moelis's Australian team has successfully
positioned itself as an independent adviser on deals from
power-plant restructurings to sales of forestry assets.
Houlihan already has experience working on Australian deals,
including the 3 billion Australian dollar (US$2.38 billion)
restructuring of mall owner and operator Centro Properties
Group.
Write to Ross Kelly at ross.kelly@wsj.com
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