After a quarter of a century at Deutsche Bank, sub-investment grade debt specialist Anthony Forshaw says he’s looking to work more closely with clients at Houlihan Lokey in London
Anthony Forshaw‘s departure from Deutsche Bank AG (DB) after 25 years rising up the ranks had nothing to do with CEO John Cryan‘s sweeping reorganization of the German investment bank. Instead, when he left to join Houlihan Lokey Inc. (HLI), as a managing director in the capital markets group in London, it was the opportunity to do something new in an organization in expansionary mode.
“You don’t survive as long as I have – and with as little hair as I have and with my reputation – to be pushed out,” Forshaw said, laughing. “The reason I left was that… I took a view that it was time to do something new.
“Sitting where you do at Deutsche Bank, and you’ve got 50% or 60% market share of fixed income in Europe, you can see the landscape changing very quickly,” the former managing director in the Deutsche Bank corporate finance group continued. “At Deutsche Bank, along with other bulge-bracket investment banks, the firm has gone from being a primary intermediator of capital moving from one hand to another, particularly in my world, sub-investment grade, to being just one of multiple competitors.”
For someone with Forshaw’s background of putting together complex deals “with a lot of value-add” the challenge is much diminished. Before the financial crisis he had been “helping to lead” the teams that put together Kohlberg Kravis Roberts & Co. LP‘s (KKR) £12.1 billion ($15.25 billion) take-private of U.K. drugstore chain and wholesaler Alliance Boots plc in 2007.
He was also involved in the €15.6 billion ($16.7 billion) buyout of Danish telecoms group TDC A/S by a consortium of private equity firms including KKR, Apax Partners LLP, Blackstone Group LP (BX), Permira and Providence Equity Partners Inc.
“When interest rates are low, anyone can place a bond or do a leveraged loan,” Forshaw said. “There’s very little negotiation in the market, the documents are becoming sillier and sillier; so there’s no creative value-add to having someone who knows documents backwards, who knows where the investors are hiding and can help a client drive that extra quarter turn of leverage and win their auction.”
Instead, he argued, the opportunity for creativity would now lie in helping clients pick financiers, rather than help them put the structure of a deal together.
“What I think I’ve done, hopefully sensibly, is moved away from being at a bank that solved the structure for a client and instead moved to the client side advising them on raising finance … and on how to pick their banks and where to find the best sources of credit.”
Houlihan has traditionally been associated with financial restructuring, both in the U.S. and Europe, but is now expanding its corporate finance and debt advisory functions on both sides of the pond. In fact, as Forshaw was keen to point out, the corporate finance function now generates more revenues than the restructuring side.
“That’s the message we really want to get across,” he said, by way of clarifying his own role at Houlihan. “Debt advisory sits elegantly between restructuring and corporate finance. Obviously some of the deals I’ve done [in the past] have ended up being restructured. But equally one of the first things you do in a restructuring is put in the right debt load so the company performs because it is not being starved of cash, and then it’s immediately ripe for refinancing. A debt advisory platform can play very nicely into restructuring and at the same time plays automatically into corporate finance.”
Forshaw, 54, worked at Morgan Grenfell & Co. in New York before it was acquired by Deutsche Bank.
He has a disabled son and he and his wife also spend a lot of time working with charities for the disabled.
He keeps himself physically active. He was a member of the squash team at his alma mater, St. John’s College, Oxford, has maintained his passion for the sport and runs a squash team at his local club in one of London’s leafier suburbs.
“That keeps me crippled three days a week,” he jokes. “At my age if you play one tough game you can’t walk for a couple of days.”
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