US Mid-Market Equity House: TD Cowen
Leading the pod TD Securities’ purchase of Cowen brought together balance sheet strength with the high-touch investment banking needed to service client growth. For building a combined platform that is greater than the sum of its parts, TD Cowen is IFR’s US Mid-Market Equity House of the Year.
In 2024, TD Cowen began to realise the potential from TD Securities’ US$1.3bn acquisition of Cowen by serving a greater number of clients through equity capital market transactions, providing a foundation for growth.
The bank was a bookrunner on 61 equity and equity-linked transactions with US$4.9bn of apportioned credit, giving it a 2% market share. That is nearly double the US$2.6bn the bank was credited with across 42 deals in 2023.
“Cowen was a hand-in-glove fit with TD Bank,” said Sante Corona, head of global ECM at the bank. Corona, a TD Securities veteran and one-time banker at Goldman Sachs, likened TD Cowen to “a smaller, more entrepreneurial version of JP Morgan”.
The acquisition was agreed in August 2022 and closed in March 2023, though full integration of operations took until April 1 2024 when TD Cowen received regulatory approval to unite the two broker-dealer platforms into a single unit.
Central to entrepreneurial banking are pod leaders, Cowen’s term for those who oversee capital raises from origination through syndication to pricing.
“Our philosophy has not changed,” said Grant Miller, a Cowen veteran who heads capital markets. “Bring great and seasoned professionals into transactions and let them do their thing.”
From legacy Cowen, Mariel Healy, Michael Campbell and Chris Weekes are pod leaders overseeing biotechnology, medtech/software and tech/industrials/SPACs, respectively. At-the-market stock sales programmes, a strength of Cowen’s, are led by Michael Murphy.
To help broaden the platform, TD Cowen hired Scott Robertson from Bank of America to lead FIG ECM banking and hired Carey Squires, a former BMO Capital Markets banker, to lead equity-linked origination. Those hires were part of broader buildouts of FIG and EQL across banking and sales and trading.
A key strength of Cowen's legacy platform is biotech. Of the 61 bookrun transactions completed last year, 39 were for biotechs totalling US$2.2bn.
The biotech business included IPOs for Bicara Therapeutics (US$362m), Septerna (US$331.2m) and Upstream Bio (US$293.3m).
Although it missed CG Oncology’s high-flying IPO in January, TD Cowen was added as a bookrunner for the late-stage cancer specialist's US$257.6m first follow-on in December.
“Life science bankers all know the same people so it is important to build a track record of bringing high-quality deals to market in good times and bad,” said biotech pod leader Healy.
Some clients require more creative solutions, especially in tough markets.
While IPOs and follow-ons are part of that effort, so are private placements, ATM programmes and alternative financing solutions.
In a particularly heavy lift, TD Cowen advised Sable Offshore on two PIPEs that raised US$590m to help the former SPAC revive exploration at dormant oil fields off coastal Southern California it bought from ExxonMobil. Its predecessor raised US$287.5m from a SPAC IPO in 2021, but heavy redemptions left just US$62m in trust when the SPAC merger closed.
Though the asset purchase was funded with a US$600m seller’s note, Sable needed more money to fund its enormous capex.
Since Sable had no active registration statement on file, TD Cowen pitched investors confidentially on a US$440m PIPE in February priced at US$10. The shares had more than doubled by September when Sable returned with a US$150m PIPE at US$20 per share.
Sable, which closed the year with its shares at US$22.90, plans to revive operations in 2025.
TD Cowen tested the depth of its ECM platform in August on a US$2.5bn block of Charles Schwab shares owned by its parent, Toronto-Dominion Bank.
“Schwab was something neither TD Securities nor Cowen could have done on their own,” said Robertson.
Although the Schwab block was widely expected, with 85% going to existing holders, separately TD Bank lacked the US distribution and Cowen the balance sheet necessary for a deal of that size.
TD Cowen was also a key player helping MicroStrategy raise massive sums in US ECM to fund its bitcoin purchases.
The bank laid the groundwork with CEO Michael Saylor in 2020 at a Miami bitcoin conference.
A string of ATM programmes led to bookrunner roles on four of the five convertible bonds MicroStrategy sold last year, capped by a massive US$21bn ATM programme launched in October.
TD Cowen remains committed to frontier sectors like nuclear energy, space exploration and bitcoin.
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