As William Wells is fond of reminding people, Rothschild has been doing business in central and eastern Europe for a very long time.
“When anyone asks us how committed we are to the region, we take great pleasure in telling them that our first major investments were in the 1830s,” says Wells, executive vice-chairman for CEE.
Another aspect the firm is keen to emphasize, in an era of suitcase banking, is its extensive physical network in the region. As well as offices in Warsaw, Istanbul and Athens, Rothschild has representatives in Budapest, Bucharest and Zagreb, plus a number of local exclusive affiliations.
This allows the firm to act on mid-market deals that would normally be below the radar of its global investment banking rivals and that are, as Wells notes, not only a good source of revenue but also of local intelligence.
“Our regional philosophy is that to know what’s going on we need to be in the market all the time, one way or another,” says Wells. “That is where we have an edge over our global rivals. We have the local knowledge that helps us understand how to use or adapt international techniques to address local situations.”
Depth and breadth
Rothschild’s network also enables the firm to provide the depth and breadth of advice required by CEE’s increasingly sophisticated and demanding corporate clients, he adds.
“People are seeking answers to complex strategic and financing challenges with very few reference points or familiarity among their local peer group,” he says. “That puts a big burden on our network across the region in terms of the mutual education and analysis process with our clients.”
The growing maturity of CEE markets also gives international players a competitive advantage over the plethora of smaller firms and boutiques offering advisory services across the region, says Wells: “As the market becomes ever more sophisticated, local players find it difficult to have the volume of activity and breadth of resources and knowledge to deliver.”
In addition to equity capital markets advisory, Wells says CEE clients are showing an increasing appetite for debt advisory services.
“Something we do quite a lot is help local corporates look at international sources of finance, the range and variety of which has expanded enormously in the last decade,” he says. “This can act as a great stimulant to banks, whether locally owned or part of international groups, to price aggressively and improve terms and conditions to try to protect their market.”