The former head of FIG at ING in Asia, Grenville Thynne, returned to his native Australia earlier this year to become head of investment banking for the Dutch bank. The role has been vacant for more than 12 months and ING only ranks twelfth in the M&A league tables. Thynne explains how he plans to increase deal flow in 2004 and rebuild the bank's franchise.
What's the core of your strategy?
Thynne: To focus on corporate advisory and use our balance sheet strategically to supplement our M&A product. We are good at giving advice and we will lead with this product in any of the deals that we do. We're neither a full-service bank nor a true niche investment bank. We're in a unique position in the Australian market.
Can you achieve your strategy without having debt and equity capabilities to back up your advisory team?
We are certainly prepared to use our balance sheet to support deals and this balance sheet is significant given the size of the ING Group globally. The bank has a strong loan product and a small structured finance operation in Australia and these will support our M&A activity. It is true, however, that we are not a full-service house with a history of debt capital markets or bond origination and distribution.
Does the proposed sale of ING's equity business in Asia to Macquarie Bank have any impact in Australia?
No, there is no equities sales, research and trading business here so there is no local significance to the deal.
What deals are you working on?
None has been publicly announced so I can't talk about them, but I can list a few of our more recent deals. We acted for National Australia Bank in its acquisition of the wealth manager MLC. In 2002 we completed two deals for Goodman Fielder who sold their milling and mixing business in Australia to Graincorp/Cargill and their Taiwanese operation to McCain Foods. We also helped Wizard Mortgage Corporation buy a 50% interest in Australian Mortgage Securities. We also do the advisory work for ING in the region and we advised the bank on the establishment of a life and funds management joint venture with ANZ.
Are you concentrating on certain sector?
The financial institutions sector is of great interest but we are also strong in oil and gas and resources. We're also trying to open up areas in utilities, which is significant in Australia. We'll do this by leveraging off the experience of our utilities team in Asia.
What's the size of your team?
We have ten executives in total. Myself and two other directors run the show and then we have vice presidents and associates. We're also recruiting two new analysts to boost our origination capabilities.
How are you going to differentiate yourself in such a competitive market?
We'll focus on key sectors, we'll strategically use the bank's balance sheet and we'll continue to bring ideas to our clients. We can help to bankroll deals through acquisition financing, bridges with a take-out or straight bilateral lending.
What characterizes the Australian M&A market?
It is a mature, sophisticated and well-analysed market where many of the transactions are driven by companies seeking scale. This way they can bring about cost efficiencies and introduce their products and services to a wider audience. The strengthening Australian dollar will generate more offshore opportunities in the next 12 months. Another trend this year will be the continued disposal of local assets by foreign companies, particularly in the utilities sector.
What about cross-border deals with Asia?
Some financial institutions are now looking at assets in Asia, while Asian companies are looking down here for resources and utilities opportunities. I think there will be a steady flow of cross border deals between the two regions.