Lazard is top merger adviser in a poor year for bids

Lazard, the world's largest privately owned investment bank, has toppled Morgan Stanley from the top slot as adviser to the most clients in the technology, telecoms and media industries in Europe.

In a year that has been as quiet as a graveyard for most investment banks, Lazard has advised on takeovers worth $23.6bn (£15.7bn) in Europe, up 52 per cent from 2001.

The increase catapults Lazard from being the ninth biggest adviser to companies doing deals to number one, with the bank managing to gain market share as the value of deals in those industries halved to $73.1bn.

Lazard is one of the few banks to focus on offering advice to clients and has not tried to sell them a full package of services such as loans and foreign exchange. The strategy has been successful for Lazard and other more focused groups, including the stockbroker Cazenove & Co and even the much larger Goldman Sachs.

In contrast, banks such as JP Morgan, which have tried to adopt a "universal bank" strategy, by using their own huge balance sheets to lend money in order to grab clients, have struggled in the last few years.

Banks which have not aggressively tried to lend money at the same time as offering advice on deals have found favour with investors, partly because they are perceived to have less of a conflict of interest between different departments.

Companies have also not wanted to borrow large sums to expand, because of the sustained economic downturn.

The bank with the second biggest slice of advisory work this year was UBS Warburg, according to the survey, which was compiled by Bloomberg news wire. Goldman was third and Merrill Lynch was fourth. Morgan Stanley fell from the top slot last year to number five.

Lazard is advising Granada Group on its acquisition of its rival Carlton Communications - a transaction valued at £1.3bn. In September, the bank helped the Paris-based Publicis to become the fourth-biggest advertising company by buying Bcom3 for $3.2bn.

Lazard this year advised Vivendi Universal on four transactions, totalling about $5.2bn. The close relationship now looks under threat after Jean-Marie Messier, a former Lazard banker, was fired from his position as chief executive of Vivendi in July.

The value of acquisitions this year plunged 58 per cent in the telecommunications and technology industries as a drop in equity values and overcapacity on phone networks prompted businesses to curtail expansion. The media industry declined less – by 7.3 per cent to $29.8bn.

Lazard's media clients accounted for 44 per cent of its European business in the three industries and helped the bank weather the decline.