What’s a better way to get access to talent while expanding in a certain industry than through acquisitions? Especially in the heavily regulated, competitive investment banking sector. TD is hoping it has the right idea when it announced that is buying Cowen for $1.3 billion.
TD is gaining 1,700 professionals from Cowen, while growing its services in investment banking and equity research. Establishing a presence in investment banking by buying one has been the way to go for larger financial institutions, and TD is not the only one going down that route. Earlier in 2022, B. Riley said it is buying FocalPoint Securities for $175 million.
Hiring a top dealmaker and building out a team underneath them takes at least a couple of years, and a cultural fit is not guaranteed. On other hand, acquiring a proven investment bank is a quicker process.
And TD is likely not done dealmaking. “Our M&A strategy includes pursuing growth opportunities to add capabilities where we identified needs in our own businesses,” said TD CEO Bharat Masrani on a conference call.
– Demitri Diakantonis