Kepler Capital Markets is a leading independent European financial services company specialised in intermediation and advisory services. The company is 53% majority owned by employees and management and 47% owned by minority investors: la Caisse des Dépôts, Gruppo Banca Leonardo, Crédit Mutuel Arkéa and BlackFin Capital Partners. The group consists of 370 employees. Kepler is active in equity research and brokerage, fixed income, derivatives, structured products and corporate finance. Kepler has built a reputation for the quality and independence of its research and intermediation via its multi-local platform in Amsterdam, Frankfurt, Geneva, London, Madrid, Milan, Munich, Paris, Vienna, Zurich and New York. In November 2011 and June 2012 respectively, Kepler announced strategic alliances with UniCredit for the research and distribution of Western European and Central and Eastern European cash equities. In July, 2012 Kepler announced that it was in exclusive negotiations to acquire Cheuvreux from Crédit Agricole CIB.
Founded in Paris in July 1997, as the equity brokerage business of Bank Julius Baer, the Swiss-based private bank, Kepler has evolved into a leading European financial intermediary with seven business lines:
Fixed Income Agency
Fixed Income Inter Dealer Broker
Many of the original founders of Kepler are still in place and during the course of various changes of ownership they have helped to define the key Kepler characteristics: independence, entrepreneurship, and robustness.
Through three changes of ownership (Bank Julius Baer, Lightyear Capital, Landsbanki) in the period 1997 – 2008, Kepler was able to keep itself semi-independent due to a separate management and due to a different brand (‘Kepler’ from February, 2004). Having endured three different owners, by the time that Landsbanki went into administration in late 2008, the Kepler managers were more than ready to control their own destiny and stick to the core business of financial intermediation. We also felt that this desire for independence mirrored clients’ expectations: at that time (and still today) there was a blurring of interest between what was good for the investment banks and what was good for their own clients. So, in December 2008, in the teeth of the Lehman and Icelandic financial crises, Kepler staff and management rescued Kepler via an MBO from the wreckage of the Landsbanki blow-up. In April 2011, Kepler announced the entry of four prestigious minority shareholders who allow us to preserve our independence while adding capital resources, expertise and potential deal flow. Staff and management retain just over 50% of the company.
The entrepreneurial spirit is demonstrated by the record speed with which we concluded the December 2008 MBO and gained the necessary regulatory approvals. Originally based on just one business line, equity brokerage, Kepler has diversified away from the equity brokerage business cycle. 40% of total Revenues are now generated in activities which did not exist three years ago. The ratio of front office staff to management and support is 3:1 which we feel also reflects our entrepreneurial mind-set. The arrival of new minority investors brings additional resources which will help us to seize even more entrepreneurial opportunities via organic growth and acquisition.
What does robust mean?
Kepler is a survivor for the long haul. The successful conclusion of an MBO in the heat of the worst financial crisis for a generation gives a certain confidence and poise. Kepler has been described as ‘the broker they couldn’t kill’. Even before the arrival of new minority shareholders, Kepler’s balance sheet was in strong shape with a consolidated capital adequacy ratio under Basel II of 17.2%. Post conclusion of the capital raising, the consolidated capital adequacy ratio under Basel II rises to over 40% versus a minimum regulatory requirement of 8%. This robustness of balance sheet provides a reassuring signal to clients during volatile financial markets.