Sal. Oppenheim jr. & Cie. KgaA

THE SCOOP

Over two centuries of Oppenheims

One of Europe's largest independent banking groups, Luxembourg-based Sal. Oppenheim has 4,330 employees in 30 offices worldwide and €41.4 billion in assets. Founded by Salomon Oppenheim Jr., the firm got its start in Bonn, Germany, in 1789, offering credit, commodities and foreign exchange services. Within a decade, it had moved its headquarters to Cologne; when Salomon Oppenheim died in 1828, his wife Therese and sons Simon and Abraham took over daily operations. The firm has remained in the family's hands ever since.

The Jewish Oppenheims had converted to Christianity in the 1850s, but the rise of Nazi rule in the 20th century forced them to hide their origins-and by extension, their bank's. The firm was briefly named after a partner, Robert Pfedmenges, but returned to its rightful moniker in 1947. Over the years, Sal. Oppenheim has played a big role in financing German infrastructure projects, including the national rail system and steamship routes along the Rhine. After World War II, the firm helped finance the German insurance industry, the Ruhr region's mining and steel industries, and the auto union that later became Audi AG. Today, Friedrich Carl Freiherr von Oppenheim is chairman of the shareholders' committee and serves as deputy chairman of the bank's supervisory board; his nephew Christopher Freiherr von Oppenheim is a personally liable partner, the seventh generation of Oppenheim leadership; and several other members of the family are also involved with the firm.

Smart growth

In modern times, Sal. Oppenheim has expanded to include offices and subsidiaries in Luxembourg, Germany, Switzerland, Austria, France, the UK, Italy, the Czech Republic, Poland and Hungary. A top-level reorganisation was completed in July 2007 when operating division Bank Sal. Oppenheim jr. & Cie. Luxembourg merged with holding company Sal. Oppenheim International SA to form Sal. Oppenheim jr. & Cie. S.C.A., now the group's official parent company, with headquarters in Luxembourg. Although it is still busy in its homeland of Germany, Sal. Oppenheim now generates one-third of its income from other countries, and the firm says it expects that figure will increase to 50 per cent in the near future. The firm has not, however, embarked on a reckless course of expansion. Its last major acquisition was the 2005 purchase of German private bank BHF-Bank, a move that doubled assets and employees.

From asset management to M&A

The firm's business is divided between asset management, which includes private and institutional asset management services; and investment banking, which includes a complete range of corporate finance and advisory services. Sal. Oppenheim also combines the expertise of industry and product teams to provide research and family office services.

When the firm's asset management and private banking divisions were combined in 2007, the investment competencies in all asset classes were bundled under its investment policy committee (IPC). The IPC prepares short-term market forecasts for the most important asset classes and uses them to make investment decisions.

The firm's investment banking unit, which combines industry and product knowledge with transaction expertise, faced unique challenges due to the worldwide financial crisis in 2008, particularly in the second half of the year. The firm was satisfied with its corporate finance division's results. Its financial markets, in contrast, was adversely affected due to the drastic rise in volatility resulting from the financial crisis; the unit's trading, investment and hedging activities (as far as equities are concerned) were all negatively affected.

 

Opportunity for Oppenheim

 

In late 2008 and early 2009, Sal. Oppenheim's investment banking teams found plenty of work with clients across Europe. They advised Aurelius AG on its purchase of a 75.1 per cent stake in Berentzen Group, and assisted NFI Empik Media & Fashion Group on its acquisition of Spiele Max AG. On the sell side, the firm advised Beirsdorf AG on the sale of BODE Chemie GmbH to Paul Hartmann AG, and advised RWE Energy AG on the sale of its stake in electricity supplier Cegedel to assist the reorganization of Luxembourg's energy supply. In equity deals, the firm served as sole lead manager on EdiSun Power's CHF 18 million IPO.


Not a record

For 2008, Sal. Oppenheim reported a net loss of €117 million, down from its net income for 2007 of â'¬255 million. Assets under management were €132, down from the €152 billion it held at the beginning of the year. However, thanks to the support of the bank's owners, Sal. Oppenheim is in a position to digest a loss of these proportions. In addition, investment inflows have been encouraging, the firm's equity position remains high (at 12 per cent) and its advisory business has been busy, successfully concluding many mandates in 2008. According to Sal. Oppenheim, its 27 transactions worth a total of US$6 billion put it among the top five M&A advisors in German-speaking countries for the year.

Reaching East (and South)

Several new offices sprouted in 2008, deepening Sal. Oppenheim's links to markets outside Germany. A representative office in Warsaw and a branch in Budapest were unveiled early in the year, joining a representative office in Prague to make up Sal. Oppenheim's presence in Eastern Europe, and bringing a full range of asset management and investment banking services to clients in Poland and Hungary. Then in September 2008, the firm opened a branch in Lugano, Switzerland, as part of its efforts to expand in the Italian-speaking market. The Lugano team has a focus on private banking and asset management, and works in tandem with competence centres in Switzerland, Luxembourg and Germany. Sal. Oppenheim's Swiss subsidiary has seen consistent growth in recent years, both in terms of clients and average net new assets. Given Lugano's perch near the Italian border, all senior personnel based there speak a minimum of two languages, German and Italian.

In July 2008, the firm's real estate division consolidated its real estate investment management activities, creating a new company called 4IP (For Indirect Properties) Management AG, based in Zurich. Operating as a subsidiary of Sal. Oppenheim's Swiss real estate investment banking division, 4IP focuses on both unlisted real estate funds and listed real estate companies in Europe, Asia and America.

Yet another new office debuted in December 2008-and once again, the focus was on Italy. Sal. Oppenheim opened its latest location, in Milan. This office focuses on corporate finance services, including financial strategy, structuring advisory, mergers and acquisitions, IPOs and other equity capital market transactions. The team of eight local bankers relies on the firm's other investment banking units in Frankfurt and Zurich for execution support and expertise. Sal. Oppenheim's interest in Italy is not a new thing-the firm nabbed a 10 per cent stake in Italian private bank Prader Bank AG in 2006, and in 2007 it acquired a 1.7 per cent share of Milan-based investment and industrial bank Mediobanca.


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Sal. Oppenheim jr. & Cie. KgaA


4, rue Jean Monnet
L 2180 Luxembourg
Luxembourg D-50667
Phone: +352 221522-1
Fax: +352 221522-690
www.oppenheim.lu

STATS


  • Employer Type: Private
  • Chairman of the Supervisory Board: Georg Baron von Ullmann
  • 2009 Employees: 4,224

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