TD Bank Acquires Cowen, Eyes More U.S. Investment Banking Business


Hi. I am Aaron Weinman. Toronto-Dominion Bank agreed to buy an investment bank Cowen for $1.3 billion on Tuesday.

Let’s understand how this deal underscores the Canadian bank’s investment banking ambitions in the United States and how it reflects the broader transaction market for financial institutions.

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TD One Vanderbilt Bank

TD Bank / Anthony Quintano

1. Toronto-Dominion Bank $1.3 billion transfer for Cowen points out that the Canadian lender wants more of the pie from US investment banks. The deal comes after TD agreed to buy First Horizon Corp., based in Memphis. for $13.4 billion in February.

Cowen provides investment research and advisory services for mergers and acquisitions. TD will fund the acquisition from the $1.9 billion proceeds it will receive from the sale of a portion of its stake in Charles Schwab.

TD also hopes to improve its business share in U.S. capital markets by leveraging its balance sheet with Cowen’s expertise in investment banking, said a banker specializing in mergers and acquisitions for financial institutions.

While big bank mergers and acquisitions are rare, there is room for smaller, strategic deals like TD’s move to Cowen. The small and midsize banking space in the United States remains fragmented and there is room for consolidation, according to Sid Khosla, managing partner and head of mergers and acquisitions for financial services strategy at EY.

“There are adjacent areas where these banks can benefit from inorganic growth,” Khosla said of big lenders making acquisitions. “Not necessarily a game of scale in retail banking, but a game around another set of products that can utilize the deposit base these banks may have.”

During Tuesday morning’s conference call announcing the deal, Riaz Ahmed, group head for wholesale banking at TD Securities, said a pressing issue when determining an acquisition is finding a target. with “complementary skills”.

“It’s hard to time things exactly based on the markets. When you have a long-term view of the business, then what you’re really looking for is – can you find a part that has complementary skills, and then you worry less about the timing,” Ahmed said in response to a question about why TD was making the purchase amid broader market volatility.

TD was advised by Perella Weinberg, and Simpson Thacher & Bartlett and Torys LLP served as legal counsel. Ardea Partners and Perkins Advisors worked with Cowen, while Cravath, Swaine & Moore acted as legal counsel.

In other news:

Igor Tulchinsky

Igor Tulchinsky changed the way hedge funds view quants.

Mike Blake/Reuters

2. The $7 billion WorldQuant is launching a new competition to recruit talent. Those who fight can win up to $20,000 in cash or land a job.

3. Wells Fargo is relaunching and revising a policy that led to bogus job interviews, by this report from the New York Times. The bank is reactivating the practice it halted earlier this year after a former employee revealed it led managers to interview non-white applicants for previously filled jobs.

4. Andreessen Horowitz wants to manage wealthy startup founders’ money, Bloomberg reported. The venture capital firm has hired Michael Del Buono as chief investment officer for a new venture that will provide wealth management services. Meanwhile, Marc Andreessen is one of the key investors dragged into Twitter’s legal battle with Elon Musk.

5. Two investment bankers with Centerview Partners left the company to start their own boutique, according to the Wall Street Journal. Negotiators David Handler and David Neequaye secured backing from Consello and 25madison to start a business focused on advising technology companies.

6. Robinhood’s crypto unit was fined $30 million by the New York State Department of Financial Services. The NYDFS said the company’s crypto-anti-money laundering and cybersecurity program was understaffed and lacked sufficient resources to deal with the risks. Robinhood also said on Tuesday it would cut 23% of its workforce.

7. This NFT-based loyalty startup just raised $16 million from Kevin Durant and investors like Paradigm and Mr. Beast. Here’s the 10-slide pitch deck Hang used to secure the funding.

8. PwC is recruiting for 4,000 positions across the company. Here’s what incoming partners need to know, according to PwC’s hiring manager.

9. Blockchain engineers are in high demand at companies like Google and Deloitte. Even amid the crypto layoffs, recruiters said the pay and job offers for these gigs remain high.

10. HBO’s “Industry” shows how much investment banking bosses hate employees working from home. The show, about the lives of junior employees at a fictional London-based bank, returned for its second season on Monday.

Offers concluded:

  • Carlyle’s credit platform has launched a decarbonization-related financing program. The initiative incentivizes borrowers to reduce their greenhouse gas emissions or achieve other climate-related goals. It is one of the first in the American private credit market.
  • Orthodontic company Impress has merged with Uniform Teeth to create a network of orthodontic clinics. Impress is a Barcelona-based company founded by Dr. Khaled Kasem, and Uniform Teeth was created in San Francisco. Uniform is backed by investors Canaan Partners, Lerer Hippeau, Slow Ventures and Refactor Capital.

Organized by Aaron Weinman in New York. Tips? E-mail [email protected] or tweet @aaronw11. Edited by Hallam Bullock (tweet @hallam_bullock) in London.


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