Investment bankers await bonus day after a bumper year of deals

A customer inspects the first ever Porsche sportscar made in 1948, at the new Porsche dealership showroom at Alexandria in Sydney.

As investment bankers start to wind down for 2018 the most important date of the year — bonus day — will still occupy their attention over the holidays.

The majority of the international investment banks base their Australian bankers’ remuneration off performance and deal flow over the past calendar year.

That means by late January, usually around the time the hospitality is in full swing at the Australian Open, news of the bonuses start to come through.

Macquarie bankers have to wait until May because the bank has a March year-end date.

Despite the recent surge in market volatility, it has been a bumper year for corporate deals in Australia, especially for mergers and acquisitions. For equity capital market bankers, it has been a mixed year.

There’s still been a steady flow of smaller deals and transactions, like Viva Energy and Coronado Coal, but there were no mega-deals to help bump up the pay packets this year.

Deals like Latitude and the float of PEXA, alongside the smaller floats of Prospa and ReadyTech, were put on hold.

So far this year, $US162.82 billion worth of M&A deals, up from $US118.1bn, have been carried out in Australia in 1969 transactions. The biggest of those was the $33bn Westfield and Unibail Rodamco deal.

UBS has retained the top spot on the investment banking M&A league tables with a market share of 34.1 per cent. Macquarie came in second with 31.3 per cent, while Goldman Sachs is ranked third with 27.6 per cent.

Those three have traditionally dominated the league tables but have the biggest workforces, with Macquarie employing about 200 bankers while UBS has 160 and Goldman Sachs about 120.

It’s also worth noting that, while the value and volume of deals has increased, several big transactions did not proceed. The $14.4bn bid by Harbour for Santos failed to materialise and the $13bn proposal from CKI to APA Group was blocked by the government. The bankers on those deals would not have been paid, despite months of work going into the planning.

In equity capital markets, there has been $US5.38bn raised in 65 IPOs this year. UBS was again the top-ranked bank, with a 17.4 per cent market share, while Deutsche Bank and BAML shot up the rankings, thanks to Viva Energy’s $1.4bn IPO.