Lars Andersson, the dealmaker who helped Morgan Stanley earn as much as $120m for advising US agribusiness Monsanto on its $66bn sale to Germany’s Bayer in September, is leaving the US funding financial institution to launch a brand new boutique advisory agency.
His deliberate departure, which was confirmed by individuals with direct information of his choice, marks the newest instance of a senior dealmaker exiting a prime international financial institution to start out a enterprise that goals to eat into the income pool sometimes dominated by huge establishments.
The transfer comes weeks after the Monetary Occasions revealed that the $120m Morgan Stanley stands to earn if Monsanto is bought to Bayer would rank as the most important dealmaking charge paid to a financial institution for advising an organization on its sale.
An individual near Morgan Stanley stated on the time that the hefty sum was a reward given by Monsanto as a result of the seed and crop chemical compounds firm had been suggested by Mr Andersson virtually for no charge for greater than a decade.
Mr Andersson, who has been a vice-chairman of funding banking at Morgan Stanley in New York after stints at different banks, plans to start out a agency targeted on advising and investing in corporations within the life sciences and know-how sector, added one of many individuals conscious of his plans. The timing of his departure is uncommon, as most bankers sometimes wait till annual bonuses are paid within the new yr earlier than making a choice to give up.
Mr Andersson, 50, didn’t reply to a number of requests for remark, whereas Morgan Stanley declined to remark.
A wave of senior bankers, together with many from Morgan Stanley, have efficiently began smaller advisory companies over the previous decade, after leaving the establishments the place they constructed their profession and Rolodex.
These bankers have claimed that life outdoors of the shackles of an enormous financial institution is extra enjoyable, extra profitable, and permits them to offer battle-free recommendation, as a result of boutiques don’t have different merchandise to promote to shoppers. The companies vary in measurement from the micro-boutiques, similar to London’s Robey Warshaw and Zaoui & Co, to these with bigger groups similar to New York-based mostly Perella Weinberg Companions and PJT Companions.
Ducera Companions, for instance — a agency set-up by Michael Kramer, a restructuring specialist — additionally suggested Monsanto on its cope with Bayer alongside Morgan Stanley. Ducera, which employs a tiny fraction of what Morgan Stanley does, stands to obtain $45m if the deal closes.
An enormous payday from the sale of Monsanto is just not assured. The deal is happening because the agribusiness sector is present process an enormous consolidation and Bayer is predicted to face robust regulatory scrutiny. The merger between Dow and DuPont, and a takeover of Switzerland’s Syngenta by ChemChina are additionally anticipated to be intently watched by regulators. The three offers will put management of greater than 60 per cent of the worldwide agribusiness within the arms of simply three corporations. However Morgan Stanley might nonetheless obtain as a lot as $96m even when the deal collapses and Ducera would obtain $28m.
Huge banks are more and more acknowledging that a rising variety of boutique advisory companies are biting into their market share. Nevertheless, they contend that boutique advisers are incentivised to push offers on shoppers, as a result of they typically depend on charges from transactions, and that most of the world’s main firms require entry to capital, which solely establishments with a stability sheet and capital markets capabilities can ship.
Further reporting by James Fontanella-Khan