Subject category:
Strategy and General Management
Published by:
IBS Case Development Center
Length: 5 pages
Data source: Published sources
Topics:
Cazenove Group Plc; David Mayhew; Financial advisory; Investment banking; Corporate broking; JP Morgan; Lehman Bros; Restructuring strategies; Failed initial public offer (IPO); Mergers & acquisitions (M&A); Investment research; Foreign financial institutions; Britain's blue-chip companies; Joint venture; Structured finance market
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Abstract
Cazenove Group Plc, the oldest and largest British financial services firm, serves a client base comprising of top UK-based companies. Since its inception in 1823, it had operated independently and discreetly, much to the approval of its clientele, dealing with fund management and investment banking, besides providing corporate finance advisory, securities distribution and research services. The firm ran into rough weather in 2003 due to the stock market crash and corpus erosion in its fund management business. The changing circumstances and increasing competition required aggressive fund management and innovative investment banking which further required expertise and funds. Failing to generate enough revenue to attract fresh talent and structure new products, Cazenove started looking for alliances which could provide the required competence while preserving its independence. After some deliberations Cazenove formed a joint venture with JP Morgan, which was providing it with both independence and competence. But the deal generated apprehension among its clients and some of them were contemplating severing long-standing relationships with Cazenove. The case presents the travails of Cazenove in restructuring its operations and raises a debate on whether the strategy it had adopted to overcome its problems was a rational decision or a mistake committed in haste.
Location:
Industry:
Size:
GBP546 million (market value 2003)
Other setting(s):
2001-2004
About
Abstract
Cazenove Group Plc, the oldest and largest British financial services firm, serves a client base comprising of top UK-based companies. Since its inception in 1823, it had operated independently and discreetly, much to the approval of its clientele, dealing with fund management and investment banking, besides providing corporate finance advisory, securities distribution and research services. The firm ran into rough weather in 2003 due to the stock market crash and corpus erosion in its fund management business. The changing circumstances and increasing competition required aggressive fund management and innovative investment banking which further required expertise and funds. Failing to generate enough revenue to attract fresh talent and structure new products, Cazenove started looking for alliances which could provide the required competence while preserving its independence. After some deliberations Cazenove formed a joint venture with JP Morgan, which was providing it with both independence and competence. But the deal generated apprehension among its clients and some of them were contemplating severing long-standing relationships with Cazenove. The case presents the travails of Cazenove in restructuring its operations and raises a debate on whether the strategy it had adopted to overcome its problems was a rational decision or a mistake committed in haste.
Settings
Location:
Industry:
Size:
GBP546 million (market value 2003)
Other setting(s):
2001-2004