New York-based investment bank Berkshire Capital Securities has opened an office in Australia to tap into merger and acquisition activity in the sector of boutique investment management backers, such as Pinnacle, nabInvest and Challenger.
Berkshire has appointed Ian Martin as Berkshire Asia Pacific vice chairman. Martin has held a number of senior positions in the Australian wealth management industry.
He was BT Financial Group chief executive until 2002, when Westpac acquired the fund manager from Principal Financial Group.
He was also the inaugural chairman of the Industry and Financial Services Association - which has recently been renamed the Financial Services Council - from 1998 until 2000.
More recently, Martin was a member of the Super System Review panel led by Jeremy Cooper.
Berkshire sees opportunities in helping multi-boutique managers expand overseas, Martin said.
"When you look at their particular business structures they tend to be overweight Aussie equities in particular. Clearly, it is in their strategic interest to diversify and that is where we can help," he said.
Berkshire chief executive and co-founder Bruce Cameron said the firm also sees opportunities in helping independent boutiques with succession.
"There are some independent boutiques here that have been started by people that may now be in their fifties or early sixties, and part of the process of keeping these firms going is moving the ownership from the older guys into the next generation," he said.
"That seems easy but the valuation parameters and how you price that and structure that can create a lot of issues between partners that have to work together every day.
"We have done that for a lot with firms in the US which were started in the early 70s."
Berkshire is not planning to add a spate of new staff to the firm, as the Sydney office can tap into the expertise of the offices in New York and London.
"We are not going to try to replicate Berkshire's New York and London offices - we are going to leverage off them," Martin said. "People are not part of my key performance indicators."
Berkshire hopes to set itself apart from other investment banks by specialising in the investment and wealth management sector.
This sector is characterised by a tight-knit network and any transactions require a higher degree of discretion than other sectors, Martin said.
"Transactions are often done privately. Public auctions or unfriendly bids are a no-no in this sector," he said.
"This market, let's face it, is a fish bowl. A lot of those issues that apply in the industry get magnified here.
"For a boutique that is thinking about its future and succession issues, that makes them circumspect about the people they can discuss these issues with, without the fear of it becoming common knowledge."
Berkshire Capital was started in 1983 by Cameron and his business partner Bruce McEver.
The firm, which was named after McEver's house in the Berkshire Mountains, has no connections to Warren Buffett's Berkshire Hathaway.
"It occasionally has caused confusion, but I suppose there are worse people to be confused with than Warren Buffett," Cameron said.
