Investment Banking (2024)

Providing investment banking solutions, including M&A, capital raising and risk management, for a broad range of corporations, institutions and governments

|PODCAST

2024 Investment Banking Outlook

David Rawlings hosts Jay Horine, North America Head of Investment Banking and Co-Head of Global Energy, Power, Renewables and Mining, for a conversation about what’s ahead for investment banking. They explore market dynamics, the U.S. and global economy, sector trends and the outlook for deal-making in 2024. Jay also shares insights into industry innovation and how CEOs and boards can navigate the evolving investment banking landscape.

Healthcare Symposium

Vis Raghavan: A very warm welcome to this, our inaugural innovation symposium in the health care space. It's absolutely fantastic that you can all kind of join us here today.

Dania Chehab: There is quite a lot of innovation coming from health care. And this really permeates across all subsectors, be it cutting edge R&D in biotech, genetic sequencing, and life science tools and diagnostic-- the consumerization of health care, which we have seen accelerate over the last couple of years.

Jeremy Hunt: Life sciences is one that we are particularly proud of, not just because we are home to a third of the European life science startups, but because we can see the impact on ordinary families of what happens when you have a strong life science sector.

Christian Wolfum: We have a growing, but also aging population. There's a strong need for more and more precise medicine. And life science companies help there a lot. The life science industry, it's an industry where you have partners from corporate, academia providers. You can really create an ecosystem of open innovation, bringing new ideas into your company, really seeing what will impact health care and the clinical practice in a couple of years from now.

Rose Nguyen: Over the past 5 to 10 years, there has been tremendous progress in the field in some areas that even exceeded our expectations. We believe that there is a technological revolution going on in health care and life sciences.

Shobi Khan: There's so much innovation going on. And I think to be in that space now, to be able to participate in those discoveries is an extraordinary opportunity.

David Redfern: We feel very optimistic about the level of science. There's a lot of great innovation happening, a lot of great science happening. It is being accelerated by the tech revolution. And the interface of data science with biological and genetic science is hugely exciting.

Juha Anjala: We support innovation in many different ways. We have always been willing to invest early in a relationship with innovators. We are a relationship-based organization that invests in our clients early, consistently, and over time.

David Ke: I'm very excited by a number of the strong innovations that we have coming out of the health care sector. For example, whether it's the latest cutting edge science coming out of biotechnology. It's been unique and remarkable to see just the globalization within the health care industry over the past decade, whether it's European companies that want to list in the U.S., but also attract capital from Asia, or Asia companies thinking about listing in London, but also wanting to attract U.S. investors.

Chris Hollowood: We're incredibly lucky relative to some other industries, where clearly you need to create value for shareholders, but also you create value for so many other stakeholders. At the scientific level translating world-beating science into medicines, then at the medicine level when you see the impact on patients. And the wonderful thing is actually when you serve all three, all three have the greatest success. So there's an alignment there. So if you can't get out of bed in the morning energized by all of that, I don't know what you can.

Fred Turpin: There’s been an extraordinarily challenging backdrop. It's harder to get deals done today than it used to be. Rates are higher, equity markets are less forgiving, but there is no shortage of strategic activity. Everything we thought about meeting communications valuations for course segments over the last three or four years has changed. So what's driving some of these changes? Obviously, the economics of streaming are very different than the economics of linear content on cable.

Fred Turpin:And I do think that it seems self-evident that over the next five years we're going to see reductions in content spending, more consolidation and probably higher prices for all of us to watch Yellowstone and Succession.

Fred Turpin: Another area that we're very focused on our practice is audio. There's a lot more opportunity to grow, share and to advertise more effectively on audio right now than there may be on video, because it's video is just kind of overwhelmed with high quality content and competitors. Gaming has exploded and the community that is very focused on gaming as a form of entertainment are also very active online.

Fred Turpin: And it makes them very, very attractive and important consumers for leading edge technology companies. There is a scramble to try to make sure that platforms have access to those really important, incredibly dedicated and high intensity users. And gaming is often a platform for that.

Fred Turpin: One of the biggest changes we've seen over the last three years since COVID has been in consumer broadband. We saw valuations hit all time highs for cable companies and for certain wireless companies. Since the pandemic ended, and the technology cost of deploying very high quality broadband has is dramatically less than it was five years ago. So we've seen competition come into a number of these markets and it's become a much more dynamic marketplace where for 20 years, basically cable companies had home broadband to themselves.

Fred Turpin: We do continue to see growth in fiber to the home. There's a half a dozen players that are driving that very capital intensive. But these are 50 year assets.

Fred Turpin: The market cap that has been created in the tower sector, in the data center sector, as well as the fiber sector over the last ten years is is dramatic. Right. And while it's down from the peaks, it's certainly still amazingly value creating for both the companies and the investors that have been early to the space. We continue to believe that we're in the early innings, third, fourth inning of the total architecture of the digital infrastructure for the United States and then subsequently the world demand for advanced devices, Internet connected devices and data creation continue to explode, whether it's storage, connectivity, compute latency.

Fred Turpin: These trends are here with us to stay. If your sovereign wealth fund, if you're a major PE fund, if you've got a dedicated infrastructure fund, how are you not a participant in the datacenter sector, in the cloud sector, in the tower sector, in the DAS sector, in fiber, like every zero sum game, there are going to be winners and they're going to be losers and boardrooms and CEOs and management teams across America and the world are very, very focused right now in my sector, I'm trying to make sure that they're putting the pieces in place to ensure that they have competitive advantage in a consumer facing business in the future that’s going to allow them to create value.

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Chris Grose: The future today, in my opinion, is as bright as it’s ever been. TMC is going to continue to be the engine for the U.S. economy. Now on the M&A side, companies remain cautious given the macro uncertainty. What’s the one lone bright spot? It’s been sponsor activity. So we’ve seen a good amount of take privates and we expect to see more. And the debt markets has just been, frankly, more resilient than the equity markets. And we expect a relatively healthy financing backdrop to support M&A going forward.

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