• Fresh Amplify’s new performance-based ranking identifies top 10 capital raising firms of 2022
  • Barrenjoey tops the rankings followed by Moelis Australia based on the criteria
  • Fresh Amplify forecasts headwinds and a tougher environment for cap raises in 2023 

Integrated investment house Barrenjoey was the top ASX capital raising firm of 2022, according to a detailed analysis of over 670 placements.

Fintech Fresh Amplify ranked Australia’s top 10 brokers and investment banks through compiling and assessing raises between September 2021 and August 2022.

The dates were chosen to allow for analysis of a three-month post-placement analysis period, which Amplify data shows is a high-risk period for market selloffs.


Top 10 Australian capital raising firms 2022

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The ranking assessment criteria assessed ability for the firm to maximise shareholder value. Each deals’ pricing, incentivisation, aftermarket performance, shareholder access, and dilution was considered, giving each overall deal a grade ranging from A+ down to D – a failed deal.


Ranking methodology

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The ranking was adjusted to weigh firms fairly on the number of placements they secured over this period and discounts offered. The highest grade achieved in ASX capital raising in 2022 was an A with the elusive A+ not being seen in equity capital markets since 2020.


Barrenjoey consistently scores mix of A and B-

Barrenjoey only pulled ahead of Moelis Australia in the ranking, securing a consistent mix of A and B-grade capital raises across its seven transactions, and scoring high for deals such as the Cleanaway (ASX:CWY) $350 million placement in August this year.

Despite superior performance from Moelis’ placements, the firm was marginally marked down in comparison to Barrenjoey for leading less deals over the assessment period.

Moeilis did however, score an A grade for 100% of its deals, including the $40.15 million placement for Maas Group Holdings (ASX:MGH), which made 2022 close to a perfect year.

Company and investor-led deals landed in third place, with 77% of the 62 deals scoring an A-grade or B-grade.

Deals in this group included the $3.3 million February placement of Metallica Minerals (ASX:MLM) and $2.13 million January placement for IODM (ASX:IOD).


A-Grade deals fall in 2022

There were 64 A-grade deals in 2022, down from 94 in 2021. The best placement of 2022 was a $4.75m capital raise by The Environmental Group (ASX:EGL).

Other placements scoring As in the ranking included a $12 million placement by Dreadnought Resources (ASX:DRE) led by Canaccord Genuity, and a $21 million placement by Peel Mining (ASX:PEX)..

Of the 64 A-Grade placements, 45% were for sub-$50m nano caps, 36% micro caps, 11% small caps, and 8% mid-caps.


Impact of capital raises vital in gauging success

Fresh Amplify co-founder and CEO Ben Williamson said it was the first ranking of its kind that not only looks at the deal itself, but both its after-market performance and the volume of raises undertaken by each firm.

“Successful capital raises occur over a period of years, not days, and it is no surprise to see that those firms with strong reputations are also the firms that consistently performed the best throughout 2022,” he said.

“By creating this ranking we’re attempting to set a new standard for capital raising in Australia.

“It isn’t about the greatest volume or the highest figures, but rather the best long-term outcome.”


Tough environment for capital raising in 2023

Williamson said in 2023 he expects smaller raises to be completed, with a higher percentage to insiders and high conviction investors.

He said a fall in market caps among the smaller end of the market will also make it tougher for ASX capital raising this year.

He said there are ~2200 companies listed on the ASX and the S&P ASX 200 accounts for ~80% of the value whilst being less than 10% of the number rule.

“The growth companies which could be future ASX 200 are struggling to get access to funds,” he said.

“If you look at last year and other years it was very easy to make money in companies capital raising.

“They were all done at discounts and a quarter of them had options, so you had a lot of tourist investors and brokers coming in but then the storm comes through and only the locals are left.

He said large raises in 2023 will come from either companies doing a big recap like Star Entertainment (ASX:SGR) or M&A activity, where well positioned companies can use their balance sheet to buy out competition.

“At the bottom end you have companies that have gone from say a $20 million market cap to $6 million.

“From a model point of view it used to be worth $20 million and they could dilute by 20% to 25% and raise $4 to $5 million in a placement.

“You take $1 million out to run the business and then have a disproportionate impact on your market cap.

“Now if you’ve gone from $20 million to $6 million you can only raise $1.5 million and it still costs $1 million to run the business but now they only have $500k to have that disproportionate impact on share price.”


Change of tactic needed for companies

Williamson said companies which will do well realise the investing climate has changed and use technology to scale their message and understand the different aspects of the market.

“There’s not one type of investor, there’s institutions, brokers, retail, high net worth and they all have different amounts of money, there’s different numbers of them and they have different drivers,” he said.

“The companies doing well are the ones engaging their existing base, making sure they’re investors, the people who determine their share price, market cap are on the journey with them.”

He said if you log into a trading platform for example and look up a ticker code you really only see the price, chart, bid etc.

“But it doesn’t convey who the company is, their journey, who are the people and what is their strategy so the companies that can highlight what they are doing behind the code really well will out compete time and time again,” he said.