Bankers Trust New York Corp. last week won two assignments to lead- manage equity issues - the second and third such coveted roles for the bank since it gained equity powers in 1992.
BT Securities, the investment banking arm of Bankers Trust, will lead initial public offerings of $55 million for Asia Pacific Wire and Cable and $27 million for Transeastern.
Bankers Trust led a secondary offering in April for Anchor Gaming.
"We will get more and more lead-managed deals as chief executive officers and investors start becoming more comfortable with the fact that we're getting bigger and bigger in the equity business," said Ed Garden, a managing director and head of U.S. equity at BT Securities.
Mr. Garden said that in the increasingly competitive world of one-stop shopping, the challenge for his 85-person equity team is to develop the business ahead of the investment banks' syndicated lending franchises.
"The ability to further develop integrated finance is critical," Mr. Garden said.
"The name of the game in wholesale financial services is how do you maximize share of wallet with large-scale relationships," said Judah Kraushaar, a bank analyst at Merrill Lynch & Co.
The Bankers Trust executive hopes to double his staff and make the list of the top 15 lead managers of equity deals within 12 months.
This year, Bankers Trust has been a co-manager on over 40 deals.
"When you look at the co-leads, the number has been doubling every year since 1993," said industry analyst Robert B. Albertson of Goldman, Sachs & Co., New York. He described equity underwriting as the "premiere business which gives the bank the closest relationship to its customers."
Michael D. Rumbolz, president and chief operating officer of Anchor Gaming, said Bankers Trust's reputation as a co-manager gave him comfort in awarding the bank the business over the eight or nine other bidders, which included some Wall Street firms.
"We felt loyal to the fact that they had been analyzing our company for a while, while many of the others had not," Mr. Rumbolz said. "We'd be happy to recommend them to other gaming firms looking to go to the secondary markets."
To be sure, three lead-managed equity deals does not a franchise make.
"To date, most of the commercial banks that have invested in investment- grade debt and equity underwriting have done so on a defensive basis," Mr. Kraushaar said. "Only J.P. Morgan has begun to cross over and argue that they've established a critical mass and bottom-line profitability."
The bigger question, says Mr. Kraushaar, is whether investment in the equity business can really be profitable except to the extent of "protecting revenues that would have gone out the door."
