globalfinancial markets
Reshuffling equities
Extending capacities
Combining efforts
Promoting strengths
Encouraging dialogue
Global thinking
This point Cuthbert is at pains to
underscore: 'We're in business to capture
market opportunities and serve our
eustomers - and the customer doesn't care
whether he's served out of Utrecht or
London as long as he gets what he needs.
If we globalize our business we have to
widen our mentality as well.' This
globalization process also needs to extend
to the integration of infrastructure and
inanimate systems: 'We're anxious to get
our systems platforms reorganized so they
have a common language with those in
the rest of the group,' he says. What's
more, in the production not only of
vanilla products such FX or STIR hut also
of complex derivatives, we're really up
•igainst capacity constraints. We haven't
jot the machines to come up with the
tickets, the people to settle them, and the
accountants who can add up the results.
That's nohody's fault, just a result of the
pace at which the front office has grown.
Now, the integration of front and back
office has becorne a key priority.'
Apart front the organizational challenges
outlined above, Cuthbert spotlights
cultural and integrational issues as being
among the greatest challenges now faced
by GFM and the organization as a
whole. 'As far as GFM people are
concerned, they need to remember that
they're not sealed within some capsule
that happens to be located inside a
Rabobank shell. We're all here to rnake
•noney for Rabobank. We're owned by
labobank. We are Rabobank. So we
need to be ambassadorial and rnake a
real effort in terms of facing out and
saying: What can we do to help? Who
haven't we talked with and what markets
haven't we addressed? There's a
tremendous potential for synergy if we
can all coordinate our energies.'
With respect to better integration with RI,
Cuthbert has appointed a business
development manager to coordinate the
relationship with F&A. 'The challenge
will he to take the list of 2000 or so F&A
eustomers we deal with and look at what
we're doing with them today - in FX, in
credit product, in commodity products, in
equity derivatives - and ask what do we
tf^vant to be doing down the line. What are
our real competitive strengths? The
objective is to really marry GFM's product
expertise with the unique knowledge base
in F&A and our other target sectors.'
In this connection, says Cuthbert, research
should be primarily (although not
exclusively) focused on these target
sectors. 'Companies like Nomura and
James Capel, and Merrill Lynch have
hundreds of people under one roof - we
can't compete with that kind of scale and
scope. But our equity research in food and
beverages (F&A), health care including
pharmeceuticals and financials should
clearly be better than anyone else's,
especially since we're the ones who are
supposed to know what chickens really
feel like.'
Another top priority will be to permeate
GFM within the whole of the Rabobank
Group. One of Cuthbert's first expeditions
as head of GFM was the Group's
Eindhoven office to initiate a proper
dialogue with the management team. 'As
far as retail clients and small to medium-
sized corporates are concerned, the
member banks are the key distribution
platform for the factory represented by
Utrecht. We need to ardently address
ourselves to this platform. That's why
In further pursuit of our strategie
objective to become a highly-rated,
specialized equity house, our equity
businesses which operate in Amsterdam
under the umbrella of Rabo Securities,
and London will henceforth be fused
into a new entity, Rabobank
International Equities, that will operate
under the aegis of RI corporate finance.
Geographically, it will be rooted on
three legs: Amsterdam, London, and a
fresh base in New York.
There are several aims. The first is to
better target three pan-E,uropean
sectors - food and agribusiness (F&A),
pharma and health care, and first-class
financial institutions - and to cover all
the key players in these fields with
mid-range to large capitalization. Our
research capabilities will specialize on
these three fields as well as develop
products for the Benelux distribution
base (see related article on page 3 of
What's NewS January 1999). Within
the Benelux, we will focus more
broadly on lead management for mid-
cap companies in all business sectors
as well as seeking important roles in
we're looking for a business development
manager to interface with the member
banks. We're going to radically upgrade
the way our production factory and our
distribution platforms communicate.'
Cuthbert goes on to underscore the
importance of a vital dialogue with all
sides of the bank: the legal department,
human resources, and all the rest.
Indeed, if there is one word that
repeatedly surfaces in the interview, it is
dialogue. 'My culture is not the same as
the next guys' culture, but so what? The
important thing is how we communicate.
In the last couple of years - really in a
remarkably short time - RI has become a
genuinely international organization. One
that happens to have a strong Dutch
base. The business is global, our
eustomers are global, and so if we have
any ambition to really succeed then our
mentality is going to have to become
global as well. These days, if somebody
asks me about London, I immediately
say: "I don't work in London, I just
happen to livje there."'
larger transactions (including all deals
in our core sectors): this is one
geographic niche where our rating, the
size of our balance sheet, and the
quality of our research will all prove
strong advantages.
This combination of specializations -
the three target sectors and Benelux-
based mid-caps - clearly brings
together business lines of distinctly
different characteristics. However, it
will be managed as one business entity
under a single management committee
led by Andries Mak van Waay,
presently chairman of Rabo Securities.
London and New York will form the
base for a sales team specializing in
the target sectors. Amsterdam and
London will house those focusing on
Benelux sales. The hub for trading and
all syndication has been Amsterdam,
so that although some proprietary
trading and order execution
capabilities will be retained in London,
the current staff level in that operation
will be substantially reduced, integra-
ting back and middle office operations
into those of Rabobank Nederland.
