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BayernLB - Hypo Alpe Adria: no point blaming former CEO

Yesterday's news that the German authorities conducted house searches connected with an investigation into circumstances surrounding the purchase of Hypo Alpe Adria by BayernLb in May 2007 demonstrates that Acquisitions pose a substantial risk and any transactions should be scrutinised thoroughly. All too often senior management - usually led by the CEO - 'fall in love' with a transaction and push aside any rational argument against proceeding with the deal (or at least offering a lower price).
15-Oct-2010

Private Equity burns its fingers with BAWAG-PSK

News that the value of the stake in Austria's BAWAG-PSK bank that the private equity fund Cerberus bought in conjunction with an investor group may only be worth a quarter of the purchase price makes sobering reading. It demonstrates that overpriced acquisitions are not only the consequence of muddled thinking by the managements of established banks but can also lead the hard-nosed managers of private equity funds astray. While traditional managers are often seduced by the excitement of the hunt the fund managers may be pressurised by the need to put to work the money they have collected in the fund.
11-April-10

Lloyds-TSB: Failure to heed the warning signs

Management has stubbornly refused to call off the acquisition of HBOS. The warning was on the wall in CAPITAL LETTERS and for all to see. We understand that leading a large organisation is a lonely job but that does not mean that executives have to be pig-headed to the extend that they doom their companies à la Fred Goodwin. The defacto demise of RBS as a free-standing business should have been warning enough and no one can claim that the extend of the decline in financial markets and the world's economies could not have been foreseen last autumn. For an excellent analysis of this debacle read 'Brown cannot shirk the blame for Lloyds' (The Times, 9 Mar 2008). It is difficult to see how the Chief Executive and Chairman can remain in their posts.
8-Mar-09

Case Study: Common sense still essential in deal making

When ING went on a last spending spree in the first half of 2008 we had strong reservations about the merits of the purchases: paying $2.67 billion in cash for Oyak Bank of Turkey (four times book) and Euro 416 million for the German Mortgage Broker InterHyp (five times book) looked out of line with a rapidly deteriorating financial market background.
The 2007 purchase of ATF Bank of Kazakhstan by Unicredit's Bank Austria unit seemed to benefit from better timing but closer inspection also reveals that the valuation - approximately 5 times book - was very much in the seller's favour.
19-Feb-09

Barclays paid $745 million for Russia's Expobank

This transaction looked extravagant at the time it was announced in March 2008 as the situation in the financial markets was already tense. More than six months later one can only call it wildly extravagant. Small details raised a red flag as a look at Expobank's website at the time of the deal's announcement revealed that the bank did not seem to be able (or bothered) to update it's key financial figures on the website.
07-Nov-08


Purchase of Lehman's US business

At first sight the opportunistic purchase of Lehman's US business lines looks like a masterstroke and we certainly are glad that 10,000 people do not have to fear losing their jobs - at least for the moment. At second thought we think that taking on such a large contingent during a time when investment banking faces a difficult - and rapidly changing - environment may lead to some indigestion.
There certainly will be some major overlaps in fixed income and derivatives (including equity derivatives). Debt Capital Markets should also be affected not to speak from commercial banking. So Bob Diamond has his work cut out and was well advised not to bid too aggressively for Lehman's European and Asian businesses. While we think that they could have been attractive additions to Barcap's line-up in those regions the job of integrating these regions as well would have called for superhuman management skills.
24-Sep-08

PS: given the good numbers that Barclays just has reported for the first half of 2009 maybe there are superhumans running the bank?
11-Aug-08


Case Study: How not to buy a Hedge Fund

Citigroup announced that it will close the Hedge Fund co-founded by CEO Vikram Pandit.
The bank paid more than $ 800 million in July 2007 for the hedge fund business co-founded by Vikram Pandit. Given the relatively short life-span of the fund we were surprised about the amount of money the bank was willing to splash out. Mr. Pandit had only left his former employer Morgan Stanley in early 2005 and although assets under management had reputedly reached $ 4 billion since the fund was founded we had doubts about the wisdom of the transaction. That Pandit in his new role of CEO of the purchaser Citigroup has to close down his own child provided a certain amount of irony to the sorry story of an acquisition gone wrong.
12-Jun-08


Are bigger banks better?

The troubles that have hit Citigroup in the past months have encouraged those analysts that have called for a break-up of the organisation. At the same time management consultants are still predicting a steady decline of margins in the banking industry and pressure to grow in order to reap the benefits of economy of scale.
Can both sides be right? Does it depend on the circumstances of the individual organisation?
4-Dec-07

Now the hard work can begin

Now that the deal has practically been won by the Royal Bank of Scotland-led consortium the hard work will only begin. Dividing the corpse into three different parts will be more difficult than expected and the fact that banks with different nationalities are involved will provide an added complication. One way or the other this will become a classic case study for all aspiring MBA-Candidates.
15-Oct-07


 

Sumitomo pays $93 mio for 5 pct stake in Moelis
This transaction confirms that - contrary to some cindications - the animal spirits in the financial markets are not yet completely extinct. Together with the sale of Royal Bank of Scotlands aircraft leasing business the other day the deal illustrates that Asian firms try to get a larger footprint in the financial services sector while their competitors - especially the European ones - are under pressure. One can only hope that they have the managerial capability to make the most of the good weather while it lasts, although the historic precedents from the previous forays during the 1980s and 1990s are not favourable.
19-Jan-2012


PG buys 40% stake in Saxo Bank from General Atlantic and Espirito Santo for US$ 560 mio valuing the bank in the mid-teens
Saxo Bank proves that the financial service sector does not have to be dominated by the incumbent market leaders as long as market niches and trends are used in an intelligent and cost-effective way to build market share.
26-Aug-11

UBP Geneva buys ABN Amro's Swiss Private Banking Unit
The trend towards a concentration of private banking activities in stronger hands is continuing with UBP's purchase of the unit that managed Euro 11 billion in client assets.
16-Aug-11

IPO may value Russian Nomos Bank at 27 pct of assets
If Nomos can get away the sale of 20 pct of the share capital it would highlight the disparities in the valuation of banks. Memories of pre-crash euphoria cannot be dispelled.
31-Mar-11

CB Richard Ellis buys ING Real Estate Investment for $940 million
Contrary to talk of a property glut and property being overvalued there is strong underlying demand for the asset class as investors are seeking a refuge from volatile equities, bonds and hedge funds.
16-Feb-11

Bank Leumi pays Sfr 177 mio for Geneva's Banque Safdie
At just under 3 pct of assets under management the price seems to be a fair one.
10-Feb-11

Raiffeisen buys 70 pct of Polbank - valuation more realistic than pre-crunch
News that the Austrian Raiffeisen International buys a 70 pct stake in the aptly named Polbank in Poland confirms that the market for banking assets in the emerging markets is still decoupled from the market valuations in many developed markets. The price paid to the former holder of the stake, the Greek Eurobank EFG, represents around 12.7 pct of Polbanks balance sheet of Euro 5.5 billion (per Sept 2010). This is a much less aggressive valuation than those seen applied to banks in Eastern Europe a few years ago but still puts a lot of hope into the possibilities of reaping economies of scale from merging the business with Raiffeisen's existing network in Poland.
4-Feb-11

BBVA acquires 24.9 % stake in Turkey's Garanti Bank
While the price may appear to be high compared to still depressed share prices in most banks it is not a dramatic premium compared to prices paid for banks in emerging markets during the pre-crunch euphoria when they were way above intrinsic value.
3-Nov-10

Ampega-Gerling buys 32.6% of Austria's C-Quadrat
Consolidation in the asset management industry continues as this opportunistic acquisition demonstrates.
14-Oct-10

Siemens AG sells its Austrian investment management unit Innovest to Macquarie
The Australian firm continues its expansion into the gaps left in the market by the demise or merger of several large financial houses during the past few years
7-Oct-10

Credit Suisse pays $425 million for a 30% stake in hedge fund firm York Capital Management
The animal spirits are alive and well - at least at Credit Suisse! But is a minority stake really necessary to get access?
16-Sep-10

Santander to pay Euro 555 Mio for SEB's German Assets
Not a cheap price for Euro 8.5 Bio in loans and 4.6 Bio in deposits
13-Jul-10

RHJ completes £225 Mio purchase of Kleinwort Benson
From day one we thought that Dresdner overpaid for KB so this should be a happy departure for a name that still offers cachet.
5-Jul-10

Santander buys remaining 25% in Santander Mexicano
$2.5 Bio may be small change for the bank but it implies a hefty 20 percent plus of assets
1--Jun-10

Man Group plc will buy GLG Partners for $1.6 billion in cash and stock
This could turn out to be a turbulent marriage
28-May-10

Sciens Capital Management acquires Partners Group Hedge Fund platform
11-Apr-10

F&C buys Thames River Capital
Let's hope this helps F&C's share price
29-Apr-10

Nomura to acquire Nexen Energy Marketing UK
The commodity space remains hot - let's hope it is not a just another bubble
15-Feb-10

Affiliated Management Group (AMG) buys Artemis Fund Management
How large can you grow a multi-boutique asset manager?
12-Feb-10

Macquarie acquires Canadian Wealth Manager Blackmont Capital
Asset gathering remains the name of the game
31-Dec-2009

Nomura to acquire London Investment Banking boutique Tricorn Partners
Not all boutiques enjoy to stay single
16-Dec2009

Consortium buys troubled Constantia Private Bank
The worship of the 'Great Leader' as management style led another ship onto the rocks
26-Nov-09

Macquarie buys Fox-Pitt Kelton
Space vacated by the demise of some large investment banks gets populated by new players
01-Oct-09

Ameriprise to Buy Bank of America’s Columbia Funds
Another admission that  banking and asset management often make unhappy bedfellows
30-Sep-09

Bank of New York Mellon buys largest part of Insight Investment
The transaction demonstrates that prices for institutional asset managers remain depressed
13-Aug-09

Standard Bank South Africa takes 33% stake in Troika Dialog
A gutsy transaction in extremely difficult times
9-Mar-09


TD Ameritrade to buy options specialist thinkorswim
Future of the brokerage industry is not as dark as many commentators predict
9-Jan-09


Mitsubishi UJF takes stake in Capula Invesment Management
Minority stakes in hedge fund management companies tend to be problematic - for the buyers!
21-Oct-08

Citibank buys 20% stake in AK Bank
A hefty price for a minority stake
20-Oct-06

Dexia buys 75% of Denizbank
A very full price
01-Jun-06