Commerzbank is expanding its financial sponsors business in Europe and has set up a new financial sponsors group. Former managing director of Credit Suisse First Boston’s financial sponsors group, Matthew Roeser has been appointed global head of the new group responsible for global coverage of financial sponsors with a particular focus on European business. He will report to head of capital markets, Mark Eban.
Eban said: “We see significant scope to expand our financial sponsors business in Europe. The recent addition of syndicated loans, structured acquisition finance and private equity to our capital markets platform completes the creation of an integrated product offering which gives us significant competitive advantage in this area.”
The financial sponsors group is a 25-strong team, which Eban deems large enough to cover deal flow. There are no intentions to expand the team, he says. “We have the resources necessary. It is a question of directing these resources and delivering the products in the right fashion.”
Integrated finance solutions continue to be popular particularly in the small- to mid-market and more institutions are looking to provide products of this type, according to a recent survey by Ernst & Young of the leading lenders in the leveraged buyout market. Commerzbank has already been active in arranging and underwriting leveraged transactions both in Germany and across Europe to the value of €1.378 billion.
Sponsors and lenders are looking to be more creative in structuring transactions and tailoring funding to match the business’ needs and although conversion rates are still poor there has been a significant increase in activity during April and May, according to the survey. Ernst & Young believes that given lengthening lead times and a greater emphasis from financial buyers on an exhaustive due diligence process, the increase in opportunities will not translate into completed deals until the end of the year at the earliest.