If you attended our
Corporate Dealmaker Forum on Oct. 2 and 3 in New York, you know our speakers had plenty to say on a range of timely topics, from bank consolidation to buying troubled companies to doing deals in emerging markets. If you couldn't make it, not to worry. Over the next couple of weeks we'll be highlighting some of what they had to say right here.
Tuesday, we hear from
Gary Talarico, a managing director with the private equity firm Sun Capital Partners Inc. and a former Lehman Brothers Holdings Inc. banker. Talarico spent 15 years at Lehman and says he was "shocked and distressed to see it go down. I have many old friends there who've experienced a lot of pain." And there may be more to come. "I think we're far from stabilization in banking because nobody knows where revenues are coming from. Certainly the revenues we saw in the last four or five years are not repeatable in many sectors."
Talarico predicts a further shrinking of the banking industry before we see stabilization, and then a "deconsolidation" fueled by the most productive and talented bankers. "There will be people who just don't want to be part of a big organization and can go off and create an advisory boutique. [Banks] will sign some contracts, but the really talented groups who see an opportunity to make money in principal trading, they'll go out and raise capital and spin off. "
Talarico says he has heard about different groups from Bear Stearns Cos. and Lehman that are looking to raise capital. He also predicts that the deals being struck now by Bank of America Corp., Merrill Lynch & Co., J.P. Morgan Chase & Co. and others will add value. "But my guess is [the deals] won't be as additive as some people think."
- Suzanne Stevens
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Juergen Lasowski
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