“Financial Management Strategy” for Investment Banking boutique

Objective:

• Holistic financial steering concept for a partner-founded, mid-sized Investment Banking boutique
• Business focus: issuing & trading of structured products, pension solutions & alternative investment funds
• Transformation of financial management concept from “start-up modus” into “operationally stable state”
• Decision-making framework for investments, business development & daily financial management
• Reflection of business specifics & strategic objectives of shareholders:
  • Mid-term "Corporate Control Transaction" plans
  • Geographical footprint
  • Growth initiatives
  • Operational set-up
  • Available resources & financing means
• Detailed review of current systems, data environment & processes
• In-depth review of accounting & controlling system functionalities
• In-depth review of corporate & location business cases

Solution:

• Stringent orientation on strategic priorities & corporate value creation
• Business development decisions focused on value enhancements at corporate & business area levels
• Holistic concept stringently integrating valuation, strategy and financial management:
  • “Investor relations” & overall governance related topics
  • Internal corporate valuation (“buy-side”)
  • Profit distribution & reinvestment principles
  • Definition of value drivers / KPIs for each business area, location and company as a whole
  • Performance-metrics based target setting
  • Investment decision criteria
  • Pragmatic budgeting mechanics, accountability & decision-making processes
  • Set-up of profit & cost centers logic
  • Business & strategic project controlling, escalation points and processes
  • Amendments to operational “Finance” topics, e.g., revenue and expense types
  • Identification of weaknesses of current accounting / controlling systems (input-output matrices)
  • Definition of all other data requirements
• Development & use of valuation & financial steering tool:
  • Business specifics: value drivers & operational metrics
  • Location-specifics: timing, growth pattern, business focus, cost & pricing levels, taxation, etc.
  • Operating model impact of new asset classes, locations, etc.
  • Valuation & assessment of each business / location on a stand-alone & consolidated basis
  • Financial & operational impact of initiatives on headquarters
  • Consideration of alternative taxation models
  • Impact on funding capacity & capital requirements per location & headquarter
  • Profit distribution & reinvestment mechanics
  • Both cash-flow & accounting views integrated
• Recommendation to adjust business development / case at corporate & initiative levels

Main value added:

• Systematic connection of strategy, financial steering mechanisms & business decision making with valuation
• Steering mechanics linking business specifics with investor’s expectations
• Stringent focus on measurable performance dimensions
• Several changes regarding timing, width and depth of strategic initiatives from financial / operating model perspectives
• Several adjustments made to governance and decision-making processes
• Large number of technical implementation projects launched
• “Business requirements” for technical implementation of accounting / controlling system enhancements