Deutsche deploys executives to attract Wall Street’s most active dealmakers
CEO Christian Sewing and other senior managers at the bank have fanned out in recent weeks
New York — Deutsche Bank is deploying top executives, as well as billions of dollars, as it seeks to win more business with Wall Street’s most active dealmakers.
CEO Christian Sewing and other senior managers at the bank have fanned out in recent weeks to meet leaders of big US private equity firms, looking to strengthen relationships and drum up mandates for financing buyouts, according to people with knowledge of the strategy. The charm offensive follows a decision by the bank this year to make more money available for noninvestment-grade debt — dedicating roughly $16bn of its balance sheet to the effort, up from about $12bn previously, one person said.
"It’s a piece that does fit as part of our strengths within the Americas, we’re not going to hide from that," said Mark Fedorcik, co-president of the investment-banking business, who declined to comment on the balance-sheet commitment. "We have strong relationships historically with private equity."
Buyout firms amassed a record amount of cash last year to make acquisitions — firepower they typically magnify by borrowing heavily with help from banks. Frankfurt-based Deutsche Bank is looking to rebuild its share of the US market, despite recent defections by senior dealmakers. The firm ranked among the top five arrangers of US leveraged loans before the financial crisis, and slid to No 9 last year, data compiled by Bloomberg shows.
This year, Deutsche Bank has climbed back to number seven. It won top spots on Blackstone Group’s agreement to buy Spanish gaming company Cirsa Gaming Corporation and Stars Group’s purchase of Sky Betting & Gaming, one of the biggest new-money deals in the market.
The gains are a bright spot as Deutsche Bank’s shares trade near the record low they touched last month, after a management reshuffling and plans to reduce its global presence failed to win over investors.
The lender is cutting at least 7,000 jobs and paring back businesses in the US and Asia after three attempts to restore profitability in recent years ended up eroding revenue. It has also hired a unit of Cerberus Capital Management for advice on how to reach Sewing’s profit targets.
The leveraged-lending business is dear to Fedorcik, who estimates the high-yield bond market and leveraged loan pool to be about €20bn globally. He climbed Deutsche Bank’s ranks by winning corporate-finance deals. In May, the firm promoted him again, putting him at the forefront of a push to cut costs while focusing on areas of strength.