Creating More Strategic Relevance for the Investment Banking Sector

Many people think of investment banks as firms with a rolodex of fixed income and equity investors and companies that could be for sale.

Partly true, of course, but the infrastructure behind the larger banks has pushed fundraising and M&A activity to unprecedented volumes. Apart from market forces, deal velocity has become crucial to cover those overheads — as has the need to report revenue growth quarter-over-quarter.

So, what has happened to the quality of deals on a post-transaction basis? Have some prospered? Was value really created years after a deal had been done?

Fortman Cline Capital Markets Ltd (FCCM), a boutique advisory firm covering South East Asia, has decided to pursue a low-volume, high-margin approach.

It has established a management consultancy to help clients prepare for sale, or assist clients with integration and strategy implementation once a deal is consummated. In other cases, it has advised clients on strategy and internal restructuring before a sale is finalised. Engaging industry professionals in key verticals such as healthcare, consumer businesses, infrastructure services has allowed FCCM to perform well in a very competitive environment. It has highlighted the firm’s strategic and commercial expertise, and taken it far beyond the role of ordinary financial advisors.

“Having meaningful dialogues with clients over a company’s lifecycle is very important,” says Daniel Ibasco, Fortman Cline Capital Markets’ CEO and co-founder. “This develops customer loyalty, and annuity like revenue streams vis-à-vis a transaction-orientated approach to business.” Taking a holistic approach to clients’ individual situations has improved the quality of deal execution. A focused strategy on these verticals also creates discipline and focus for originating business.

Ibasco says we need to understand “the ecosystem, the key players, (and) the unmet nets in the sector” when originating transactions or mandates.