Can you introduce us to DC Advisory Partners?
We are a European mid-market M&A and debt advisory firm, with 200 people across eight offices in the UK, France, Germany, Spain and Poland. The firm's parent company, Daiwa Capital Markets, is a major global banking group with headquarters in Japan, which gives us an international presence and access to a strong network of companies in Asia. We also work with our partner company, Sagent Advisors, who are based in the US. We advise our clients on buying and selling businesses, and raising and structuring capital. The majority of our clients are private equity firms and corporates, and we focus on transactions worth between £100 and £500 million.
What differentiates the firm from other corporate finance advisors?
We have geographical breadth similar to a bulge bracket bank, yet the focus of a niche adviser - and our global network makes DC Advisory Partners the most international firm in the mid-market.
Unlike large investment banks which offer a number of products and services, we only sell one thing: advice. This fact means our focus is much deeper than that of a bulge-bracket firm. If, for example, a client is considering selling one of their portfolio companies, our objective is to provide specific and detailed advice about what's best for that client in that situation. We talk to them and tell them who the potential buyers are, what's going to interest them, and what's likely to concern them - and there's a very big market for this kind of quality, independent advice.
We have a strong record of working on European transactions and, of the total number of deals we have completed this financial year, about forty percent have been cross border deals. We are also unusual in that we provide cross-border European/Asian expertise. DC Advisory Partners has a London-based team called the Japan Asia Focus Group, which is dedicated to advising clients on opportunities into and out of Asia. Although its work represents only a proportion of our total deals done, the group is an important part of our business as it allows us to capitalise on the growing number of Japanese companies seeking to make acquisitions in Europe.
Why is the volume of transactions between Japan and Europe increasing?
Last year, the number of Japanese acquisitions into Europe increased by 200 per cent from 2010. We expect this trend to continue throughout 2012 and believe there are three principal drivers behind it. Firstly, a strong yen against both the euro and sterling has more than doubled Japanese companies' buying power in these markets over the past four years. Secondly, in the wake of the earthquake and tsunami last March, many Japanese companies want to diversify geographically in order to limit the impact should a similar disaster occur in the future. Thirdly, Japanese companies are cash-rich, having spent two decades repairing their balance sheets, which affords them the opportunity to make investments overseas.
Could you tell us about an interesting cross-border deal the firm has worked on recently?
By working with our international network of firms, we advised EQT, a Nordic private equity firm, on selling VTI Technologies, an automotive electronics business, to the Japanese company Murata Manufacturing.
Together with Danske Bank, our partners in the Scandinavia region, we advised EQT against taking the business to auction straight away. Instead, the firm's senior management went to Oslo to discuss the dynamics of the buyer group with EQT. We then worked with our partners in Norway, Japan and the US to present EQT with four buyers - two Japanese and two American. The Japan Asia Focus Group thought very carefully about the Japanese buyers, enabling them to maximise both their interest in VTI Technologies, and the price EQT got for the business. When a price was agreed, we ran a very focused and fast process to execute the deal with Murata.
Has the current economic climate presented any challenges for your business?
The current M&A market is a difficult one, but 2011 was a very good year for the firm because we have a strong understanding of buyer dynamics, and have been able to use that knowledge to our advantage. The one specific problem we've seen is that, in contrast to the Japanese appetite for European businesses, American companies are somewhat wary of doing deals in Europe. If, for example, you were to put a European M&A proposition to a board in the US now, it's likely that they wouldn't be interested. As the US faces its own debt crisis, American companies are particularly concerned about the economic stability of the eurozone and they regard investment in Europe principally as a risk, rather than an opportunity.
Why is DC Advisory Partners a good place for graduates to start their career?
The main advantage of starting your career at DC Advisory Partners is that you will get real transaction experience from almost the moment you join your team. We don't have enormous deal teams, so we can help graduates gain experience and develop their skills faster than a bulge-bracket firm can, and they will quickly be expected to contribute their views. Furthermore, client exposure is an integral part of our analysts' experience , so new joiners will be attending client meetings, building relationships with them and, if they are working on a cross-border project, perhaps travelling internationally to do so.
We also have a four week training programme, in which all new analysts from the European offices participate. The programme includes training in how to use Excel, financial analysis, financial modelling, business writing skills, meeting skills and presenting the right professional image. It's also a great way to network with peers and establish professional relationships that will be useful for doing business in the future.
What does the firm look for in graduates?
We look for people who are bright, with strong analytical skills. Analysts here must constantly develop their knowledge and skills, so graduates must be keen to gain new knowledge quickly. We also look for people who have interesting and engaging personalities, and a genuine interest in working with others. You need to be able to build relationships with colleagues and then with clients to earn their trust so that they are willing to take advice from you.
The role of analyst is a demanding one both intellectually and in terms of the time that it requires, so we need people who are enthusiastic, confident and energetic with resilience and determination.