Entering the investment banking business last year by Cantor Fitzgerald wasn't the most opportune time, and that has played out in that way, as the company is now refocusing its efforts on its bond business, looking to that sector for growth until investment banking turns around.
The expansion by Cantor will be in relationship to their London office, where it will hire nine new people for its debt advisory division.
This will double the already-existing nine people manning the debt business in London, with five of them hired for debt origination itself, and four others for research, trading and marketing.
With lending from banks projected to remain subdued over the next two to four years, this offers debt financing and Cantor Fitzgerald an opportunity to grow out the business while banks hold back until there's more real and sustainable recovery.
Capital requirements are another issue the banks face, again, providing opportunities for Cantor Fitzgerald to expand its bond business to provide the financing many companies need.
Borrowers in need of significant capital are largely ignoring the bank market at this time, as the liquidity isn't there to fund their projects and requirements in the near term, making those able to help them raise funds in a strong position, with private equity companies also enjoying a resurgence in providing capital.
Europe could be especially open to new means of financing as projections are concerning banks providing loans to leveraged borrowers, it could plunge to only $68 billion over the next several years, which now stands at about four times that much that lenders have available, underscoring the ongoing weakness and vulnerability of the industry.
Until the extraordinary leverage currently existing in the financial system is removed, things will continue on in the bond markets for companies that step into the liquidity vacuum.
The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com
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