Paul Taubman’s PJT Buys DeNovo to Cash In on Mideast Deals Boom - Bloomberg

Paul Taubman’s PJT Buys DeNovo to Cash In on Mideast Deals Boom - Bloomberg

PJT Partners agreed to acquire Dubai-based advisory firm deNovo Partners, giving Paul Taubman’s investment bank a greater foothold in the Middle East amid a surge in regional dealmaking activity.

The deal brings together two Morgan Stanley alumni: Taubman set up PJT about a decade ago after 30 years at the firm. Meantime, deNovo was founded in 2010 by May Nasrallah, who worked at the Wall Street Bank for 15 years and is regarded as one of the Middle East’s most seasoned dealmakers.

She will continue leading the Middle East franchise, overseeing key regional clients and join PJT’s senior team.

The firms didn’t disclose financial details of the deal, which is subject to regulatory approvals and expected to close in October, according to a statement.

The move will allow New York-based PJT to expand its global footprint, working both with clients in the Middle East and those based elsewhere with business interests in the region, said Taubman, who is the firm’s chairman and chief executive officer.

The deal marks just the second acquisition for the US firm, which was spun off from Blackstone. PJT has been enjoying bumper revenue for its work helping struggling firms restructure in recent months. The investment bank has said it expects its restructuring activity to remain high and approach last year’s record.

PJT and deNovo have previously collaborated on deals through a 2020 agreement, working with Middle East-based entities including sovereign funds, companies and family groups.

The combination comes amid a surge in investment banking activity in the Gulf. There’s been a flurry of outbound deals and initial public offerings in recent years, especially in Saudi Arabia and the United Arab Emirates, where governments are spending billions to diversify their economies and deepen capital markets.

In the first half of this year alone, Middle Eastern sovereign wealth funds accounted for more than half the value of all deals done by global state-backed investors, according to consultancy Global SWF.

Global advisory firms including Rothschild & Co. and Moelis & Co. have been adding staff or opening offices in Abu Dhabi or Riyadh to grab a slice of that growing market. Their expansion coincides with the arrival of hedge funds, private equity firms and asset managers in the UAE, attracted by the ease of doing business and the presence of deep-pocketed sovereign funds.

Nasrallah was previously the head of Morgan Stanley’s investment bank in the region and helped establish its Dubai office.

She later set up deNovo, and through the years built it into one of most prominent independent advisory firms in the Gulf. The boutique now has a team of about 20 bankers, predominantly based in Dubai’s financial center, and recently acquired a license to operate in Saudi Arabia’s capital Riyadh.

The firm has already advised on several high-profile deals this year — a multi-billion agreement involving one of the world’s largest school operators, GEMS Education, and an investment by T.J. Maxx’s owner in Dubai’s Brands for Less.