Newly merged Cavendish launches in London as bank bosses face ‘really tough’ conditions
Newly merged investment bank Cavendish has launched to the market today after the completion of a tie up between City firms Cenkos Securities and FinnCap, in the latest in a wave of consolidation in the mid-market banking sector.
The deal brings together two of the City’s mid-market banks and brokers amid a torrid time for the market in which smaller firms have been rocked by a slowdown in dealmaking and drop-off in IPOs.
The mid-market segment of the market has seen a flurry of deals this year after as firms hunt for scale. The Cavendish tie-up follows the takeover of investment bank Numis by Deutsche in April.
Bosses of the newly merged outfit told City A.M. this morning that it would allow them to continue operating profitably despite the downturn.
“[A deals slowdown] has been going on for quite a long time in the sort of mid and smaller parts of of the market, so what we’ve got now we’ve got a platform that will make us profitable even in the really, really tough market conditions,” former Cenkos boss and now Cavendish co-chief Julian Morse, told Morning Wire
The newly merged firm brings together some 200 people across its headquarters in One Bartholomew Close, London and its Scottish office in Edinburgh.
With around 220 quoted clients, Cavendish said it now has the largest retained client base amongst UK small and midcap investment banks.
Bosses said this morning they were now also seeing an increase in appetite for deals despite still tricky conditions.
“Even though it’s quiet, it’s not closed. We are still transacting and closed a deal last week, and we closed a deal three weeks ago,” Morse added.
Co-chief John Farrugia, who previously led FinnCap, added that the firm was not ruling out more acquisitions in the coming year.
“We’ll be opportunistic – that’s the right word to use,” he said. “If anything interesting comes up, we’ll be opportunistic about it.”
The two companies both have a market capitalisation of around £21m.