M&A in the middle

The smaller end of the M&A advisory market has not escaped the broad downturn in M&A activity, with volumes in Australia, US and Europe falling by between 17 and 50 per cent in the first nine months of the year.

According to Thomson-Reuters, the potentially lucrative but highly disparate mid-market M&A sector in Australia amounted to $US25 billion for the first nine months of 2008, a 23 per cent fall from the same period a year ago.

Leading accounting firms KPMG and PricewaterhouseCoopers continue to dominate Australia's market, with PwC particularly strong at the smaller end, leading the up-to-$US50 million category with $US111 million of deals, and KPMG leading the broader up-to-$US100 million category, with $US425 million of deals.

Behind PwC in the $US50 million category comes KPMG, RBS, Deloitte, CIBC, UBS, and Bell Potter Securities. Following KPMG in the $US100 million category is Gresham, Macquarie, Grant Samuel, JPMorgan, RBS, Euroz, UBS, and Azure Capital.

Australia ranks 5th in the mid-market sector behind the US, UK, China and Japan.

The one region to actually show an increase over the first nine months of the year is the so-called "Hochinma”, which comprises Hong Kong, China, India and Malaysia.

It gained 7 per cent in value over the same period a year ago, but the striking feature was the emergence of boutique advisory firms, which dominated the rankings in the period.

These included firms such as Hong Kong-based Optima Capital, which topped each of the ranking categories. It is led by an all-female management team including Mei Leung, who bought the business last year, and managing director Beatrice Lung.

Other boutiques to perform strongly in that market included CIMB Investment Bank, AmInvestment Bank Group, Access Capital, Veda Capital, and the curiously named Yes Bank, an Indian advisory firm established several years ago by Rana Kapoor, a former country head of ANZ Grindlays.