It was inevitable that, having worked out their 'gardening leave', Simon Mordant, Ron Malek and Jamie Garis would return to investment banking.
Mordant and Malek were, with Peter Hunt, founders of the boutique advisory firm Caliburn in 1999 which they sold to a US investment bank, Greenhill, in 2010 for about $US180 million. Garis joined them in 2002 before all three resigned from the firm early last year.
Today they confirmed that they were establishing a new firm, Luminis Partners, which will have a strategic alliance with the New York-listed investment bank Evercore Partners.
Evercore, founded in 1995, has a market capitalisation of about $US2.3 billion, 76 partners, 1000 employees, operates in the US, Latin America and Europe and has offices or alliances throughout Asia. It has invested an undisclosed amount in Luminis, which it can convert to an equity stake in 2017.
For Evercore, a bank with global investment banking aspirations, a presence within Australia, which has been one of the livelier mergers and acquisitions markets in the world post-crisis and is often also regarded as a safe platform and window into Asia, was inevitable. A relationship with three veteran and well-connected bankers is the perfect entrée.
For Mordant, Malek and Garis, the experience with Greenhill obviously convinced them that in a world of increasing cross-border activity, a tie-up with an international bank was desirable.
The model for Luminis will be the Caliburn model of an advice-only and independent practice. Evercore does have securities and asset management businesses (although it eschews proprietary trading), but Luminis’ relationship will be with Evercore’s advisory business, which pursues a similar advice-driven strategy to their own.
The conversion option for the equity the US group is contributing has been deferred until 2017 to ensure the three founders of the new firm have the autonomy to establish it as they wish.
It is no surprise that once their handcuffs fell away, the three co-founders of the new firm would return to the sector they have been involved in for decades.
They have deep relationships with the blue-chip end of the corporate sector. During their time at Caliburn they carved out, with Lazard and Gresham, a major niche in the advisory space for advisory services unconflicted by the securities markets businesses owned by the big full-service investment banks.
Given that independent investment banking is a relationship-driven business, they’d expect to easily reprise the Caliburn experience. Certainly their enthusiasm for the industry hasn’t waned, despite their relatively length layoffs.
A point of difference between Caliburn and Luminis is that the trio plans to create a foundation focused on the arts, education, health and welfare. Mordant is a major patron of the arts and is on a number of boards or councils of major arts museums and organisations, as well as the board of the ABC. A percentage of Luminis’ profits will be directed to the Luminis Foundation.
Even as Mordant, Malek and Garis are returning to investment banking, their major (and fierce) rival in the independent advisory sector, John Wylie, is departing it. Wylie, who co-founded Carnegie Wylie with Mark Carnegie in 2000 before they sold the firm to Lazard in 2007, announced his retirement from Lazard late last year.
While he will retain a limited 'special adviser' role with Lazard this year, the withdrawal from the sector of one of its most prominent figures just as they return to it won’t have escaped the Luminis partners.