Wednesday, 25 January 2012

Interview with the financier profiting from banks' pain

By Lionel Laurent and Matthieu Protard
PARIS, Jan 25 (Reuters) - Behind the doom and gloom of European banks offloading assets and scaling back lending in the face of the euro zone debt crisis, at least one financier is hoping to profit from their pain.

Veteran French banker Laurent Quirin, who heads financial services group Kepler Capital Markets, told Reuters on Wednesday his firm was broadening its reach beyond equity brokerage and poaching top talent from banks just as they were pulling back.

Kepler earlier this month launched a new business line designed to help banks offload "illiquid" - or hard to sell - assets such as mortgage-backed securities or consumer loans that would interest investors with available cash to hold them.

"We've already got quite a few mandates in this field," Quirin, 47, said in an interview at Kepler's Paris headquarters. "We have several mandates from European banks, including French ones."

French banks such as BNP Paribas and Societe Generale are at the centre of a fresh wave of asset sales across Europe's financial sector, with banks putting loan portfolios and entire activities on the block to build up precious loss-absorbing capital.

SocGen and smaller domestic rival Credit Agricole also still hold piles of toxic assets left over from the 2008 financial crisis, which they are gradually selling.

"Some products that were at some point securitised are still being held by banks, insurers and "bad-bank" structures," said Quirin. "These players can't hold them anymore."

Kepler, named after the pioneering 17th-century astronomer Johannes Kepler, narrowly escaped collapse in 2008 when the fall of its Icelandic parent Landsbanki pushed Quirin to lead a management buyout of the broker he co-founded a decade earlier.

Kepler's history of prudent business and total avoidance of proprietary trading meant its clients stayed loyal despite the crisis, said Quirin, who now wants to grow fixed-income and advisory amid a tough stock-market environment.

The new illiquid-assets business, headed by former SocGen banker Pascal Marionneau, is part of this strategy. Kepler has also set up a new structured-products unit under Nicolas Miara-Godet, another former SocGen banker, which has access to the capital resources of 22 partner banks.

The company got a vote of confidence last year when it raised 57 million euros in fresh capital by selling minority stakes to investors including French fund BlackFin and state bank Caisse des Depots. Management and employees still own 53 percent of the group.

Kepler is looking at possible acquisitions to add to its new business lines, according to former Credit Agricole banker Quirin.

"We're looking at a number of assets that might interest us, that might allow us to offer new business lines or to complement our existing lines," he said.

Kepler is targeting revenue of around 120 million euros ($155.77 million) this year after 100 million last year. The split between equities and other businesses is around 50-50, according to Quirin.
Quirin added there were no plans to extend a strategic alliance with Italy's Unicredit in Western European equity brokerage.

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