IN A sign that he is clearing the decks for his presidential run, the former New York City mayor, Rudolph Giuliani, has sold his boutique investment bank to Macquarie Bank.

It is a neat coincidence of American ambitions: Giuliani wants to capitalise his investments and avoid possible conflicts of interest during the next 20 months, while for Macquarie Bank it represents a significant expansion of its investment banking activities in the US.

Giuliani Capital Advisors has about 100 employees and offices in Chicago, New York, Los Angeles, Atlanta and Troy, Michigan. It works in mergers and acquisitions, corporate restructures and bankruptcy. It was bought from Ernst & Young in 2004 and was reported to have revenues of $US47.8 million ($61.6 million) in 2005 but incurred a net loss of about $US1.4 million.

Macquarie Bank has about 350 employees in investment banking in the United States.

The sale price was not disclosed, but the New York Times quoted one analyst as suggesting around $US76 million while others suggested $US100 million. Giuliani Partners is believed to own about 70 per cent of the investment bank. The rest is owned by its senior staff, who will come with the deal.

The bank was the most significant part of Giuliani's business empire, from which he has made millions since leaving public office in 2002.

Giuliani has also made millions in speaking fees since leaving office (he disclosed in 2002 divorce proceedings that he made $US8 million a year in speaking fees), and is also a partner in a Houston law firm, Bracewell & Giuliani.

The sale of the bank may be just one of the steps he will take to minimise potential problems.

In the past few months, he has become the clear front runner for the Republican nomination, despite his position on social issues being well to the left of most of the Republican faithful.

The investment bank was the most saleable of his businesses, with Giuliani having little day-to-day involvement.

A leaked document from the Giuliani campaign identified his business interests as one of many potential problems for the former mayor. Giuliani Capital Advisors has been criticised by unions for excessive fees in bankruptcy proceedings and had its fees reduced by court order.

But it was the least of the political worries for Giuliani. His law firm, Bracewell & Giuliani, represents energy interests which attract fierce opposition from environmental groups on pollution and greenhouse gas issues.

Giuliani has also been criticised for taking excessive fees at charity events. One occasion involved the Queen Elizabeth Research Hospital in Adelaide, where his reported $200,000 fee left only $15,000 in net proceeds. After criticism, he held a fundraiser in New York which raised $75,000.

http://www.smh.com.au/news/business/macquarie-takes-the-bank-as-giuliani-runs-for-president/2007/03/06/1173166697217.html

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