Mizuho Americas LLC is in growth mode and has recently beefed up its investment banking coverage in several verticals including automotive, consumer, energy and financial sponsors.
Within the last month, the U.S. arm of Japan-based Mizuho Financial Group Inc. hired two managing directors on the consumer and retail team — Heidi Sandquist and Stephen Robb. The firm also hired five others, including Managing Director Jeffrey Tuckel, Director Robert Minikes and Vice President Joseph Flores in the financial sponsors business; Managing Director Andrew Karnovsky in automotive; and Deputy Head of Energy and Managing Director Angela McCracken.
"Some of the additional hiring we've been making in these verticals is to really deepen and grow our capabilities in other products, specifically equities, leveraged finance and M&A," Keith Wargo, co-head of corporate and investment banking for Mizuho Americas, said in an interview.
Mizuho's strengths traditionally lie in debt-oriented products, including debt capital markets, loan syndication and derivatives, said Michael Keating, co-head of corporate and investment banking. But the company is looking to change that.
"A lot of what we've been doing is looking to broaden our capabilities, and the areas we're going in are more aligned with the needs of these industries," Keating said in an interview.
Wargo noted that the consumer i-bankers, Sandquist and Robb, have experience working on debt deals as well as strategic advisory assignments. He added that they have relationships in the different parts of the industry including food and beverage, consumer products and retail.
Sandquist is particularly experienced in handling international needs of large and mid-size companies in the food and beverage space, said Sherif Lotfi, head of consumer and retail corporate and investment banking for Mizuho Americas.
Robb, meanwhile, brings experience in working with companies of all sizes, including private equity players, Lotfi said.
"The way the sector is, you need people with experience working with both types of companies and everything in the middle in order to be successful, because so much change is happening in the sector both from the consumer side as well as the technology side, the supply chain side. It's across the board," Lotfi said in an interview.
Those changes include consumers wanting to know the source of the products they buy and companies understanding whether brands are living up to their images, as well as to the disruptive forces of new technology and competition, Lotfi said. Many consumer companies, meanwhile, are engaging in cross-border transactions to grow or diversify their customers and using technology to gain new opportunities to market and deliver products, Lotfi said.
"With the improvements in information technology, robotics and other things, sometimes size can you give an undue advantage beyond your ability to market your products but also on the logistics side," Lotfi said.
Lotfi said he sees a broad-based opportunity for the consumer team to work with clients. Lotfi not only wants the group to work on debt, equity and M&A deals but also provide more "bread and butter banking" services.
"Global trade finance, helping the companies managing their working capital more efficiently, helping companies with their risk management on both rates and [foreign exchange] — those are all things we expect both of these guys to do," Lotfi said.
But some of the new hires do see dealmaking opportunities. Karnovsky, the automotive i-banker, expects traditional suppliers — companies that make seating and related components, drivelines, axles and other elements that have been in cars for decades — will continue to buy smaller players so they serve customers globally, Karnovsky said. Emerging technologies will drive the consolidation, Karnovsky said.
"Some of those technologies will be purchased by the 'traditional supplier' as they continue to try to augment their businesses and move into what might be viewed as higher-technology, higher-margin, higher-growth products. I do think we're going to continue to see companies look to acquire emerging players, cutting-edge technologies," Karnovsky said.
In energy, many companies are coming out of "one of the worst commodity downturns in the last 30 years" and are seeing more opportunities as a result, McCracken said.
"We're starting to see an increase in M&A activity and so the clients are stronger, they're better capitalized, their opportunities going forward are significant — so being able to bring the opportunity set to a bank that hasn't had access to it before is exciting," McCracken said.
Mizuho's recent additions continue an expansion that began in 2015 when parent Mizuho acquired a $36.5 billion credit portfolio from Royal Bank of Scotland Group PLC, or RBS, comprising about 200 investment-grade corporations in the U.S. and Canada. Mizuho also hired about 150 people from RBS, Keating said.
Since then, the firm has steadily continued to hire across several areas and roles. Wargo said Mizuho Americas will continue hiring in its key verticals.
"We have a clear growth plan and we think the environment is both favorable to clients and people joining us that we have a clearly defined growth plan. That's somewhat unique in the industry backdrop right now," Wargo said.