Investment bankers in the upstream energy space are continuing to expand their services to E&P executives by bringing asset-brokerage into their suite of offerings. The newest member of this growing North American club is Calgary-based Scotiabank, which has acquired asset-broker Waterous & Co., a long-time player in both the North American and international asset-divestment space. The combined practice, Scotia Waterous, will include Scotiabank's existing M&A, or corporate-transaction, desk and the asset-transaction firm. Other recent combinations include the mergers of Calgary-based I-banker Tristone Capital with Denver-based asset-broker Petroleum Place; asset-broker Randall & Dewey with I-banker Jefferies Group Inc.; and Houston-based asset-divestment firm Albrecht & Associates with Memphis-headquartered I-banker Morgan Keegan. In an alliance rather than a full combination, asset-broker Griffis & Associates has joined I-banker Simmons & Co. International. Both are based in Houston. "From a marketing perspective, our industry knowledge, coupled with our relationships, not only at the CEO and CFO levels but also with the evaluation teams, allows us to focus on the most likely buyers," Gerald Carman, a Simmons managing director, says of the Simmons-Griffis asset-broker/investment-banking combination. George Gosbee, chairman and chief executive of Tristone Capital, says Tristone's combination with Petroleum Place gives each firm strength in both asset- and corporate-transaction services. Tristone did both types of transactions prior to the deal with Petroleum Place; now the latter has access to Tristone's I-banking suite of services, and Tristone has access to Petroleum Place's popular asset-auction business, The Oil & Gas Asset Clearinghouse. "Investment bankers have focused on a top-down approach to mergers and acquisitions, while A&D firms have been bottom-up when marketing a property," Gosbee says. "By combining the two, we have been able to have both a bottom-up and top-down approach." Gosbee is referring to below-ground asset evaluation-reservoir characteristics, reserve life, downspacing opportunities and such-and above-ground corporate analysis-a company's fiscal profile and other traits that may or may not be interesting to a buyer. Two other asset-brokers to change their ownership affiliation are long-timers in the space: Randall & Dewey and Albrecht & Associates. Each has been a fore-runner in upstream asset divestment. "Randall & Dewey had been approached several times over the years by investment-banking firms...," says chief executive officer Claire Farley. "Jefferies understood and valued our high-substance, deep-in-the-weeds approach to advising clients on M&A. They also understood our strategy to expand internationally." The firm had recently expanded outside the U.S., opening practices in Calgary and London. "We were going to win the work and add a team member. It is a conservative way to go about it," Farley says. That process could be rather slow, however, and a combination with Jefferies offered faster expansion opportunities as well as other opportunities. Expanding outside their traditional boundaries has been key to some of the asset-brokers' combinations with investment bankers. Waterous & Co. has been a well-established deal-maker abroad, giving Scotiabank that leg up. Tristone has taken a good market share in Western Canada in its few years, giving Petroleum Place a firm entrance there. Meanwhile, Tristone gains a stronger presence in the U.S. Part of the push for these combinations is the growing number of asset transactions, and fewer corporate transactions in the upstream M&A space. Whole-company deals are rarer today than ones in which just the seller's assets are involved while the company itself continues. Deals involving stock more often require the authorizations and expertise of investment bankers. Meanwhile, companies doing asset deals have increasingly sought the services of asset-brokers, which cast a wide marketing net. Gosbee says, "In the 1990s, investment banking became all about execution. More and more, people are realizing that many investment bankers didn't know anything about their clients' businesses and there is less confidence in investment banking today because of this." On the flip side, an asset-broker can be disadvantaged by not being familiar enough with today's financial instruments and fiscal pitfalls. "If you're not familiar with the capital markets, how can you give the best advice on which company a client should sell his assets to? Not always are we selling property to the highest bidder."