Reshuffling corporate finance
1
corporatefinance
Management Team Corporate Finance
Corporate Finance in all its forms
continues to play a critical role in the
banks' continuing strategie evolution.
Recent developments indude a fresh
set of priorities and the formation of
a new management team.
Incentive systems
Crucial research
Globalization
Rapid consolidation
Important relations
What'sNewS Issue 5 May 1998 I
Our bank is presently
engineering an important
strategie move away from the
more traditional, balanee-sheet
driven activities. Although such
business remains important, 'it
only one of many tools that
we have at our disposal within
corporate finance,' explains
Wouter Kolff of the managing
board. The aim is to provide innovative,
cross-border, solution-led wholesale
banking in selected fields where we have a
reasonable chance of achieving
critical mass and clearly-defined levels
of profitability. 'Our ultimate goal is
to provide value to our customer.
That involves total solutions not any
one individual product.'
Because straight loans have become
loss-leaders in solvency terms, the
incentives system will be accordingly
modified to discourage their use. 'What
•ve wish to promote instead is the virtual
'anking concept, where we pool our
resources into cliënt- and deal-specific
teams.' M&A, strategie advisory,
acquisition finance, structured finance and
structured trade finance, as well as
syndication are all part of the arsenal.
Credit is just another product. Says Kolff,
'we hire relationship managers to advise
clients on a whole spectrum of
possibilities - to tailor paekages that meet
their specific needs. Henceforth, they have
to consider themselves content organizers.
They have to change into corporate
advisers able to lead a team-oriented
approach.'
High-quality research will play a crucial
role in broadening our product base,
Hiys Kolff. 'We will be moving much more
to individual company research, not
only looking at overall industry trends,
but also trving to position our cliënt
within this broader context and pro-
actively recommending an appropriate
strategie response. Research is a vehicle
that we can use to get things moving
along. Indeed, as far as return on solvency
(RoS) is concerned, movement is the
message.' Research will be crucial in three
specific areas: relationship management,
M&A, and in the equity and capital
markets. 'It's fantastic
to be so knowledgeable
in F&A, but knowledge
on its own simply isn't
enough. Whether we're
talking about Europe,
Wouter Kolff, chairman
demonstrate one's industry know-how,
and therefore of real strategie importance
to our bank.'
Another key strategie component is
managing our globalization. 'Up to
now, corporate finance was centred in
Holland, but the position of other
countries in the overall mix should be
improved. The US is high on our list of
priorities, particularly in M&A advisory,
where we can really demonstrate our
Willem van 't Hooft
Shafik Gabr
Berend du Pon
the Americas or the Far
East, our goal is to
translate this globally-
recognized base of
knowledge into useful
proposals and actual
products that
immediately benefit our important F&A
and health care clients.'
The rapid pace of consolidation is an
important source of banking
opportunity. It underlies our increasingly
rapid push to widen our M&A presence
world-wide. The near future will bring
greater investments in western Europe,
the Americas, as well as the Far East. The
importance of M&A in the overall picture
is also underlined by the appointment of
M&A global product manager Brian
Havill to the new management team.
Apart from that, we will have a number
of coördinators, as opposed to global
product managers, who will oversee a
number of other important activities like
syndicated loans, export finance, project
finance, and so forth. 'In M&A, we have
seen a number of mandates coming in, but
they are only a start. We need to intensify
and improve our capability. M&A should
not only have a positive result on its own,
but it should open the door for cross-
selling other kinds of profitable business.
It is an optimal context in which to
Brian Havill
know-how in
the F&A field.'
Another important area of activity will be
linked to Gilde Investments and its Gilde
private equity fund, which is known to
be seeking a substantial internationally-
oriented investor for initiatives in the
F&A in all three major geographical
regions.
A gain, relationships are important: if
t\ you can do equity investment, you
can come up with the more mezzanine-
type or term financing arrangements and
advisory mandates as well. Needless to
say, structured finance remains our main
rnoney spinner. Off balance sheet, tax-
driven, and mezzanine type transactions,
for example. Finally, in project finance, we
want to be active in such fields as health
care, energy co-generation, water
treatment, renewable energy and
corporate joint ventures rather than large
infrastructure-type deals.' These are
admittedly ambitious goals and Kolff is
quick to stress that 'it will take the right
people and the right attitudes to really
make this work. There clearly is room for
improving and creating focused
knowledge-based value-added network
banking. The managing board, general
managers, relationship managers and
specialists all have their role to play to
make this happen.'
