Even as they are faced with a role that is growing in scope, our clients have to contend with rapidly increasing regulatory oversight, corporate governance requirements, stakeholder accountability and risks of personal liability. It is therefore becoming even more important for them to pay attention to the detail.
Since they just don’t have the time to stay abreast of a fast-changing environment, they are being compelled to co-opt specialists to stay on top of the nuts and bolts.
Clients must decide whether to create these specialist capabilities in-house, outsource them or co-source them (a combination of the previous two options).
We recommend the co-sourcing solution because
However, it is critical that the service provider is independent, has aligned interests and possesses the requisite specialised skills.
Over time investment banks have evolved from being ‘niche players’ to ‘financial juggernauts’. This transformation has heightened the potential for conflicts of interest.
The problem is especially acute within the Markets divisions of investment banks where securities are traded. The practices of erecting ‘Chinese Walls’, creating ‘private-side’ teams and transaction-based ‘wall-crossing’ can sometimes be ineffective mechanisms for managing these conflicts.
There are many examples which illustrate this point.
While banks provide access to the markets in which they operate, their own proprietary participation may at times undermine their ability to act independently and in their clients’ best interests.
In addition, their informational advantage, specialist skills and tools, and transaction-based remuneration schemes provide them with both the opportunity and the incentive to retain value.
The simple solution to these challenges is to level the playing field by uncovering all the hidden value, ensuring its equitable distribution. Advize can help you ‘know the game’ better!
In most cases the optimal client solution comprises an integrated bundle of component parts from one or more investment banks, and/or from one or more of the divisions within these banks. However there are some challenges to achieving this. Perhaps the greatest impediment to the most efficient and cost effective result is the well-known ‘silo effect’, which exists on three different levels, namely:
Compensation structures are largely to blame for this. We help our clients to cut across these silos.
The ideal M&A/corporate restructuring approach requires the complete integration of both investment banking and global markets expertise from the inception of a transaction.
Although investment banks may be able to offer independent M&A/corporate restructuring advisory services to their clients, they are not able to provide independent global markets advisory services because they are selling the underlying products. A clear conflict exists. This problem can be overcome by retaining an independent global markets advisor to advise on the markets aspects of the transaction.
The addition of independent global markets advisors to the M&A/corporate restructuring process:
Advize is an independent global financial markets advisor focusing on the provision of strategic liability, financial risk management and general global markets advisory services.