The deal business in Calgary may be sleepy right now, but in a good market the energy business can generate a big chunk of the investment banking dollars in Canada. Canadian Imperial Bank of Commerce is getting ready for the rebound in energy, whenever it comes, by adding a very senior banker plucked out of Goldman Sachs Group Inc.
CIBC announced internally Friday morning that it has hired Michael Freeborn to be managing director and head of energy investment banking. Mr. Freeborn had been running Canadian energy investment banking at Goldman, working on deals such as Nexen Inc.'s sale to a Chinese state-owned enterprise.
It's a return home of sorts for Mr. Freeborn. He joined Goldman in 2005 from CIBC. (From our archives, here's the story of his joining.) CIBC's last really high-profile Calgary hire, Mark Horsfall, moves from that role up to a vice chairman spot to concentrate on client coverage. The changes will be effective in August.
Mr. Freeborn "brings significant energy sector and advisory experience," CIBC investment banking head Geoff Belsher said in the internal announcement. In his new role, Mr. Horsfall will "continue to leverage his strong relationships in the sector and will be focused primarily on enhancing client coverage and growing our energy business."
CIBC is making a big bet on Calgary and energy. It has recently purchased an acquisition and divestiture specialist firm, and made some significant adds to its energy expertise.
In busy times, Calgary's utility and energy companies can produce close to half the investment banking fees in Canada. However, these are not busy times. With commodity prices on the weak side, investor appetite for energy stocks is in a lull, as is merger and acquisition activity. The result is that most banking firms are not nearly as busy as they were last year.
That's a blessing for Goldman because it will give the firm time to decide on how to deal with the departure of Mr. Freeborn.
"Our commitment to the market out there to the business and office is unchanged," said Jack Curtin, who heads Goldman's Canadian operations. "We do not view this as an opportunity to retreat."
He added that Goldman's main business in Calgary is serving mid- to large-sized companies in energy who are looking to do cross-border transactions, and "that will not change."
(Boyd Erman is a Globe and Mail Reporter & Streetwise Columnist.)
Return to Streetwise home page.