DG-Rabo Securities
- joining forces
t
mergernews
The fïrst mover in doser partnership
between DG Bank and Rabobank will
be Rabo Securities. DG will take a 50%
stake in the securities business,
creating more opportunities for the
Amsterdam-based unit.
New markets
Exchanging expertise
Practical terms
What's NewS
Monitoring exciting developments at Rabo Securities: Willem Beelaerts in the dealing room
The news coukl t be better for the
team at Rabo Securities (RS). A new
partner who brings to the table a number
of major advantages is a welcome addi-
tion to Rabo Securities' already strong do-
mestic business. By joining up with DG, it
now has access to a broader trading axis,
to more research and to the possibility of
developing more sophisticated products
with pan-European appeal. 'Basically,'
says Willem Beelaerts van Emmichoven,
'if DG hadn't been an option, we would
have been obliged to go out and find one.'
The reason, he says, are market forces.
Most equity firms like RS operate on a
single domestic market in the sense that
this is where their deep expertise lies. The
reality today is that most investors are
professionals who are looking for a
broader, pan-European playing field. By
combining DG's expertise, especially in
the so-called Neue Markt, with its own
track record, RS effectively opens up ex-
tensive new avenues for its clients.
'There are now two European trading
platforms,' Beelaerts explains. 'One is
Amsterdam-Brussels-Paris, which we
cover effectively. The other is Frankfurt-
London. Now, we will be able to trade on
both, comfortably giving our customers
greater access to a bigger market. These
days, you can't afford to work on a "cot
tage" basis. Our business now is IT-based,
with customers expecting rapid responses,
not only on the trading side, which tends
to be the easiest part of the transaction.
More importantly, we have to be just as
efficiënt on the settling and administration
end. So, if you look at the ambitions we
had as a firm, if you look at how we saw
the way forward for Rabo Securities, then
a liaison with another organization was
already part of the equation. For us, DG
offers various components of the goals we
hope to achieve. Their knowledge of the
Neue Markt is tremendously helpful and
will allow us to position our new issue
business on two trading platforms, offer
ing a dual listing where appropriate.'
The 50% path in relevant areas of activity
is part of the push towards the establish
ment of a pan-European cooperative fi-
nancial institution. The big picture is, of
course, exciting, but Beelaerts welcontes it
for other reasons as well - 'if we had
waited to find a partner, we would have
lost our edge in the business'. DG's re
search is top quality and comparable, ac-
cording to people at RS, with IRIS, the
joint Rabobank-Robeco offering. Obvi-
ously, access to each other's networks is
another. But Beelaerts is also quick to
point out that it is a two-way Street. 'DG
has a substantial exposure to retail in
vestors,' he explains. 'Around 80% of
their securities business flows through the
member banks. In contrast, RS has a com-
paratively autonomous cliënt base, most
of it non-Rabobank related. I can see us
exchanging expertise on both ap-
proaches.' Both operations also have 'for-
eign' cliënt bases, but very little interna
tional overlap. So the marriage is
advantageous there too. 'We're neither
strong nor weak in the same areas,' Bee
laerts concludes. 'So you won't be sur-
prised to find we're very excited about the
possible synergies coming into play here.'
Since the original letter of intent on coop-
eration with DG was signed in October,
there has been some speculation and ru-
mour on how the practicalities would be
worked out. What would such joint ven-
tures mean for staff? Would we see people
relocating? And so on. Says Beelaerts, 'the
neat thing about this move is that not very
much will change in practical terms for
our people. We will continue to operate
DG-Rabo Securities front Amsterdam and
the basic ingredients of what we do will
remain the same. The only difference be-
ing that we will have more opportunities.
It is now up to us at RS, and potentially
DG people coming in, but only if that is
appropriate and adds value, to make this
whole thing work. The fact that we have a
new chairman of our supervisory board,
Rolf Michael Betz of DG Bank, means we
can work on building this joint business
together. There is still a lot for us to learn
about DG's business. We have to get to
know it intimately so that we can get the
best out of this opportunity. I'm sure that
we can work together to devise very inge-
nious plans to synergize activities.'
