Jefferies to Hire Up to Four Bankers for Russian ExpansionJason Corcoran
Jefferies Group LLC, the investment bank that sold itself to Leucadia National Corp., is hiring as many as four investment bankers for its first office in Moscow as international competitors retreat from Russia.
The U.S. bank lured Ildar Iksanov from Deutsche Bank AG in June to lead the business, which will focus on mergers and acquisitions, high-yield financing and global equity distribution, according to Peter Bacchus, co-head of Europe investment banking at Jefferies in London.
“A lot of what we are doing might be viewed as going against the grain or flow of traffic,” Bacchus, 44, said in a phone interview. “We see banks scaling back in Moscow, including those that have been very successful in the past.”
Jefferies, based in New York, is expanding as some investment banks retrench in Moscow amid competition from state-controlled OAO Sberbank and VTB Group. UniCredit SpA, Italy’s largest lender, said a year ago it would shutter its securities operation in Russia. ING Groep NV, the biggest Dutch financial-services company, said in October it would close its equities unit there. Credit Suisse Group AG, Switzerland’s second-largest bank, moved part of its Russian capital-markets and advisory businesses to London from Moscow, two people with knowledge of the matter said in December.
Jefferies will cater to large-capitalization companies as well as “quality smaller companies” and closely held firms, Bacchus said.
“The local banks do not have the same global capabilities that we do, with teams located in Shanghai or Beijing,” Bacchus said. Larger international banks “do have a similar global footprint to us, but they really only mobilize that infrastructure for the very largest companies,” he said.
Iskanov, 41, said he is initially seeking to hire “three to four investment banking professionals,” before growing further over the next 12 months. “Our build-out will reflect the pipeline of deals that we build. We see consolidation in the gold space, iron one, and coking coal but less so in steel and base metals.”
Russian mergers and acquisitions totaled more than $27 billion in 31 transactions this year, compared with 95 deals valued at more than $100 billion for all of 2012, data compiled by Bloomberg show.
Jefferies was hired in March of last year as corporate broker to Russian miner Nord Gold NV after it was spun out of steelmaker OAO Severstal. The firm advised Nord Gold on its takeover of High River Gold in Canada and helped organize its inaugural $500 million bond, Bacchus said.
Bacchus compared the bank’s Russian strategy to the opening of its first Canadian office in June 2012.
“In Canada, since getting started last year, our impact has been enormous,” he said. “Canada and Russia have similar markets in many ways. Both are arguably over-banked, but I believe there is a significant niche opportunity to exploit in both.”
Jefferies led the hostile takeover of Inmet Mining Corp. for First Quantum Minerals Ltd., and has also “been active in high-yield financing,” arranging bond sales for First Quantum and HudBay Minerals Inc., Bacchus said.
The bank’s ranking in Canadian M&A jumped to 15th this year after advising on 10 deals compared with 31st for all of last year, according to data compiled by Bloomberg.
Jefferies’s expansion in Europe has “now been largely executed,” Bacchus said. “We have critical mass in the places we want to be.”
Leucadia, based in New York, acquired Jefferies in March.