BNP Paribas could come late to the infrastructure party and may have to pay staff handsomely. But tardiness didn't hinder it in European leveraged finance.
Financial News reported last week that BNP Paribas is hiring fund managers and advisors for a new €1bn infrastructure operation in Paris. The move could be interpreted as slightly ill-advised following last month's warning of an infrastructure bubble by ratings agency Standard & Poor's.
Simon Stevenson, managing director at Stevenson James Search & Selection, says infrastructure bankers don't come cheap, but that BNP Paribas' fund may prove an attractive proposition, "There are quite a few infrastructure bankers looking to move to a Macquarie-style operation on the buyside."
Leveraged financiers do the business
BNP Paribas declined to comment on the timing of its infrastructure debut. However, the French bank has a record of putting a late entrance to good effect. It's been building its European leveraged finance team this year, despite suggestions from the likes of the Financial Services Authority that we're nearing the top of the market.
William Allen, founding partner at debt financing advisor Blenheim Advisors, says BNP has scaled the leveraged financing ranks rapidly. In the first three quarters of 2006, the French bank accounted for 7.1% of all leveraged finance deals in Europe and ranked fourth in the market. Last year it accounted for 2.1% and ranked 17th.
Allen says it goes to show the importance of individual leveraged financiers. "Leveraged finance is very, very relationship driven. When a borrower has a good experience with an individual and that individual moves to a credible organisation like BNP, the borrower will move with them."
Perhaps leveraged financiers are worth those hefty pay packages and multi-year guaranteed bonuses after all.