Rothschild Co has struck a deal that will take the advisory boutique into the UK lower mid-market, in the latest effort by the bank to expand the scope of its City operations in the shadow of Brexit and Mifid II.
The Anglo-French investment bank on Thursday announced that it had agreed to buy Livingstone’s UK business, a 34-strong partnership that provides dealmaking, debt and special situations advice to privately owned companies and entrepreneurs.
Terms of the deal were not disclosed.
Rothschild’s acquisition of Livingstone in the UK comes as the bank has sought to take advantage of the shake-up in the City caused by Mifid II, the pan-European regulations introduced last year that have overhauled the economics of trading and research services.
The bank in July unveiled a minority stake in research house Redburn, a rare vote of confidence in European equity research at a time when others have cut back coverage amid a price war driven by the bulge bracket banks.
In February, meanwhile, Rothschild launched an investor advisory service for corporate clients that put it head-to-head with established City brokers as competitors were grappling with how to respond to constraints imposed by the new EU rules.
The Livingstone deal also comes at a time when groups are choosing to put off public listings for longer. Although Rothschild already serves larger private companies, the lower end of the mid-market is dominated by a small number of boutiques such as Livingstone and Cavendish Corporate Finance, bought by City stockbroker FinnCap last year, as well as the Big Four accountancy firms.
Alex Midgen, co-head of Rothschild’s UK global advisory business, said he was “optimistic” but not “bullish” about the sector’s prospects in London as the capital readied for Brexit
“We’ve had a very strong year. There’s been no slowdown in our UK mid-to-large cap M&A business,” he said. The Livingstone deal would “add incremental business to what we’ve already got by dipping into the [lower mid] market”, but the business would be run as a separate unit and would not be branded as Rothschild Co, he added.
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