Barely a month after landing at Commerzbank to take up the role of global head of financial sponsors group Matthew Roeser is deep in the planning process. The structured finance activities have now been harnessed into his new group and, aside from a small expansion in headcount there, he is concentrating on plans for a European fund-of-funds business and a private equity investing business.
Roeser is already making his presence felt on the structured finance side given that according to International Financing Review (which like EVCJ is published by Thomson Financial) Commerzbank is a lead arranger (alongside JP Morgan) for EQT’s EURO1.7 billion LBO of Haarmann & Reimer, Bayer AG’s flavours manufacturing business. This deal will almost certainly put Commerzbank’s name in the top ten if not the top five, by value, of European buyout transactions in 2002. This is the sort of deal more expected of the likes of Credit Suisse First Boston, where Roeser was founding managing director of the financial sponsor’s group in London until departing for Commerzbank.
At this stage the plans for the fund-of-funds business looks likely to be a ring-fenced entity containing both Commerzbank and third party funds, rather than the off-balance sheet fund-of-funds business many banks have evolved. Also, and interestingly, the focus will be on investing with European GPs only.
The plans for private equity investing are less clear. Roeser is doubtless aware of the difficulties faced by Royal Bank of Scotland’s former approach which ultimately left it potentially competing against private equity investors it hoped to service on the structured finance side of the business. Bank of Scotland appears to have come up with a more workable solution with its integrated finance group, although there is no suggestion Commerzbank would follow suit. At present Commerzbank’s investing is limited to early stage venture capital investment, which is concentrated in Germany.
These processes take time though and if Roeser has clear indications of the size of business he is expected to build – at least on the fund-of-funds and private equity side he’s keeping his cards close to his chest for the time being. Expect more detail to emerge in the fourth quarter.
Roeser 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.”