With technology stocks continuing to flood to the markets, Credit Suisse First Boston remains very handily placed to take best advantage. For the last three years CSFB has put great effort into establishing its reputation in the technology sector. The high profile arrival of Frank Quattrone from Deutsche Bank has lent investment banking depth to strong secondary equity teams hired from UBS and added to the former BZW equity team acquired in 1998.
Charles Kirwan-Taylor, co-head of European equity capital markets, says the focus on technology has been rewarded by the upsurge in technology IPOs. “We have been a tremendous beneficiary of the overall capital requirement of the technology sector,” he says. “Not only is the volume in the market place increasing year-on-year at an accelerated rate, but the number of for which we are working is increasing even faster than the absolute volume would tell you.”
However, while Morgan Stanley and Goldman Sachs suffered setbacks with the lastminute.com and World Online flotations, CSFB has enjoyed a year of strong progress throughout the world’s markets.
Kirwan-Taylor says the team’s in-depth experience has been the big factor in this. “We’re not reliant on any one particular person in the department,” he says. “We’ve got very good people in France, Switzerland, Germany and elsewhere and strong specialists in technology, telecommunications and syndicate. Each area has an experienced person covering it.”
Being regarded as a technology specialist was the first step in challenging its investment banking peers but CSFB is also keen to point out that it has capabilities beyond that.
“I would say that we are a very balanced house,” says Kirwan-Taylor. “I think we do have a business which is geared towards the changing economy and takes account of the fact that there is an awful lot of capital required in the changing economy.”
However he says that many of the processes employed in an IPO in the changing economy are really just replication of processes employed in a more traditional transaction.
“Although the investment case is different, the internal processes, the documentation, the creation and transmission of the investment case, the transparency which is required between the investor and the market place are all similar,” he says.
By way of illustration, alongside its technology stock offerings of Freeserve ($2.4 billion) and QXL.com ($350 million), CSFB also ran the $2.3 billion flotation of Monte dei Paschi di Siena in Italy. Kirwan-Taylor says the deal involving the world’s oldest bank was very successful.
“It’s at the opposite end of the spectrum from a Freeserve,” he says. “But nevertheless one which was executed very well and which has outperformed its sector since flotation and which was a landmark in its own way.” Kirwan-Taylor points out that it was the first open priced IPO in the Italian retail market and secured, at that time, a record number of retail investors for a non-privatisation transaction.
Another old economy deal was Geberit in Switzerland. The piping and bathroom fittings manufacturer’s IPO was worth Sfr940 million ($580 million). “That was in as straight an old economy, industrial sector as one could imagine, a transaction which was executed in an absolutely classic fashion and traded very well,” says Kirwan-Taylor.
However it is the technology sector where CSFB is really making headway and with successful deals across all the main markets, including Germany where it floated Freenet, and in France, where it is the market leader in the Nouveau Marché, it is well set to continue its big strides forward.
