Australia’s Macquarie Group Ltd (MQG.AX) shed close to 15 percent of its U.S. investment banking workforce this month to replenish its ranks with star performers in North America, according to people familiar with the matter.
The action comes as other international banks reconsider their U.S. investment banking strategy. Earlier this week, Japan’s Nomura Holdings Inc (8604.T), for example, laid off more than two-thirds of the bankers working at its leveraged buyouts group.
Like Nomura, Macquarie has focused in the last few years on advising on and financing private equity deals, as a way to gain investment banking market share with corporate America. But most of the layoffs at Macquarie, which were announced internally earlier this month, targeted industry coverage rather than leveraged buyout bankers.
The job cuts came as Macquarie merged several industry groups in its investment banking division, the people said on Wednesday.
The industrials group was disbanded and some chemicals bankers joined the infrastructure team, the people said. The consumer group was merged with the gaming and leisure group, while the healthcare services information technology group was absorbed by the technology, media and telecommunications group, the people said.
In total, Macquarie’s U.S. investment banking division will continue to employ more than 200 staff, the people said, asking not to be identified because the layoffs have not been announced publicly. A Macquarie spokesman declined to comment.
Macquarie is also looking to hire investment bankers with strong sector expertise who have carved out niches for themselves, the people said. An example would be David Berman, who joined Macquarie in 2011 covering gaming, lodging and leisure, the people added.
Jorge Mora, who heads Macquarie’s financial sponsor coverage, has also taken on origination, working with the industry groups to attract top bankers and deals, the people said.
Macquarie made its debut as the top bookrunner of loans backing U.S. private equity buyouts in the league tables for the first quarter of 2016, as intense market volatility and regulation designed to curb risky lending weighed on traditional lenders.
Many of Macquarie’s competitors suffered from “hung” debt deals last year, which they struggled to syndicate. But the Australian bank made money on most of the deals it chose to underwrite, according to the sources.
Because of its foreign funding base, Macquarie is also exempt from U.S. regulations introduced in 2013 to curb the issuance of junk-related loans
Macquarie continues to turn down many deals and focuses primarily on the so-called U.S. middle-market, where transactions are smaller than $5 billion, the people said. For example, Macquarie last year refused to finance Dell Inc’s $67 billion acquisition of EMC Corp (EMC.N) because its participation in the debt package would have been relatively small, the people added.