Germany's Oldest Bank Is Pushing Into U.S., Hiring 20 Analysts

• February 20 2018
• Stephan Kahl

(Machine translation provided by Google and reviewed by Bloomberg editors.)

(Machine translation provided by Google and reviewed by Bloomberg editors.)

About 130 years after leaving the U.S., Germany based lender Joh. Berenberg Gossler & Co. KG is pushing back to the other side of the Atlantic. The second oldest bank in the world after Banca Monte dei Paschi di Siena S.p.A. wants to expand coverage of U.S. stocks dramatically.

After having hired ten analysts for its New York office over the past 12 months, the company plans to add another 20 over the next two years, according to Dave Mortlock, global head of investment banking. The goal is to increase the number of U.S. equities analyzed from 100 to 300 within two years. The coverage of around 100 American blue chips will be provided by the bank’s industry teams in Europe.

"Over the past decade, we’ve expanded our European business. In the next ten years, we will focus on the U.S.," Mortlock said in an interview from London.

Overall, Berenberg currently employs about 50 people in New York, including traders. In early February, the bank had moved into new offices. This step allows the bank to triple it’s New York investment banking staff to about 150 over the next two years.

Other German private banks are also seeing business opportunities in the American market. Two years ago, Bielefeld based Bankhaus Lampe KG founded it’s U.S. subsidiary Lampe Capital North America LLC, which advises institutional investors.

Berenberg is recruiting analysts from other banks as well as from the industries covered. "We are very picky, the bar is high," Mortlock said. At the same time, his company has a lot to offer and follows an approach to the market that is different from that of the competition, he added. "Working with us, analysts can prove to be real stock pickers. They will not just produce comments on balance sheet figures."

It’s about finding small and mid-sized U.S. stocks that are under-covered but have a strong business model and a good management team, according to Mortlock. Potential targets come from sectors like industrial, technology, media and telecommunications.

Berenberg’s European expertise in dealing with smaller companies will be an advantage while expanding into small and mid-sized caps in the U.S., Mortlock said. "We are very open minded in terms of coverage."

The Hamburg based lender has global investors as potential research buyers in mind. The company sees revenue potential by adding smaller companies to it’s blue chips coverage. Berenberg wants to establish itself as a "one-stop shop" and is currently working for more than 700 institutional investors.

However, Mortlock is not looking to expand into Asian or emerging markets local stocks: "We have no ambitions in this regard. We want to focus on building our U.S. business."

That is not the first try. Provided with letters to business friends in New England, then 23-year-old partner Johann Heinrich Gossler III left Hamburg in 1828 for the United States. Initially great business was followed by speculative losses, which caused the company to withdraw from the country starting in 1880. It was not until 2011 that Berenberg decided to do business in the U.S. again.

Original Story:
Deutschlands älteste Bank drängt in die USA, sucht 20 Analysten