| Type | Private partnership |
|---|---|
| Industry | Investment Company |
| Founded | Paris, France, 1824 |
| Number of locations | Austria, United Kingdom |
| Products | Merchant banking Wealth management Investment banking Private Equity Syndicated lending Project Finance |
| Employees |
50+ Mathis Fournier, circa 1793 |
Defoe Fournier & Cie. is an investment and merchant banking company. As part of its traditional business the firm and its partners are a source of financial advice for high net worth individuals, specifically large stockholders and "family trusts" of listed family businesses.
Additionally, the firm acquires strategic and passive investment positions in various industries, often conducting its investment activities in the private placement marketplace and is an active investor in large project financing transactions, such as Langeled pipeline.[1] The firm co-invests with the likes of ABN AMRO and HSBC. Many offshore oil drilling platforms, power generation plants, and toll roads were funded by the group's capital, and investments often involve large ownership positions in blue chip European companies.[2][3][4]
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Founded as Defoe Fournier & Cie. in 1824 in Paris by Anatole Defoe and Mathis Fournier, the firm became a leading gold bullion trading house, establishing itself as a gold custodian and transfer agent. [5]
It was considered to be one of the most reliable partnerships and was recognized by many French and Belgian colony rulers who appointed Defoe Fournier & Cie. as their keepers of wealth. In the early years much of the character of Defoe Fournier & Cie. can be attributed to its junior co-founding partner Mathis Fournier. He came to maturity during the turbulent times of French Revolution followed by Napoleonic Wars and The Empire, a period when the atmosphere was of rebirth, innovation, and tradition. When he co-founded Defoe Fournier & Co., his partner Anatole Defoe had been in banking for more than 20 years; however, it was Fournier's avant-garde approach to banking, a profession of utmost conservatism, was the reason of strong foothold the partnership gained within the establishment. Serving the needs of clients in remote areas and specialty situations, exemplified by colonial assets and major projects, the younger partner was the most celebrated traveling banker in Paris, mostly serving Defoe Fournier & Cie. needs by traveling were business required, and referring to his occupation as "merchant". The ability of Defoe Fournier & Cie. and the willingness of one of its senior partners to travel to any length and provide the highest level of support to clients has earned the company its respectable rank, result oriented reputation and high levels of profitability for many years to come. The utmost cofidentiality maintained by Defoe Fournier & Cie. along with absolute financial prudence were the cornerstones of its business. [6]
Over next 180 years Defoe Fournier & Cie. did not really change. In the 1970s, it expanded its private banking capabilities and was relocated to Luxembourg, when it was a bank with very tight lips to the very wealthy European establishment, with just 70 employees, working under the governance of 30 or so partners. Dozens of subsidiaries and business units reported to the bank and its partners. With over $5 billion in capital, the bank was considered to be very solid. It never solicited business, and its partners, mostly hailing from European wealthy dynasties, were the discreet face of the bank, which had no obvious presence and its single Luxembourg office had no name plate.
In June 2007, committed to refocus on its core business globally, the group reverted its name back to Defoe Fournier & Cie. and became a global assets investment and merchant banking firm. During the same year, the number of partners was reduced dramatically, from estimated 35 to less than 15. The bulk of partners' capital was reduced due to this.
Prior to that, starting in 2002, the group initiated its strategy to develop small and mid-cap merchant banking business to supplement its blue-chip corporate focus in Europe. Starting in the U.S., it established a joint venture with CS Opportunity Group, a boutique investment bank focused on real estate intensive industry sectors.
In 2005, the group attempted to acquire Grubb & Ellis Company, the 4th world largest integrated commercial real estate services company with over 6,000 employees working globally through 150 offices. The purpose of acquiring Grubb & Ellis for over $110 million was to establish, in one big step, a global merchant banking group focused on small and medium size corporate customers, the core business of Grubb & Ellis.[7] The Board of Grubb & Ellis refused the Defoe Fournier's all cash offer and few months later was still forced to sell the company, via an ill-timed merger, to NNN Realty Advisers Inc. [8]
In 2009, Hill van Breen & Co., a project and industrial metals trade finance house, merged into Defoe Fournier & Cie. with two of its partners becoming partners within the merchant banking group and leading its project finance and commodity trade desk.
In 2010 Defoe Fournier & Cie. business lines were restructured as it was clear that there were two groups of partners in the firm with deferring strategic views. There were the traditionalists who saw little need for change of the firm's historical business or further expansions into new lines of business. Then there was the group of partners which was expanding the firm's small and mid-size company oriented business. As a result, the firm's emerging company merchant banking and project & commodity finance activities were spun off as Defoe Partners which was created as a separated company with head offices in New York. Defoe Partners Management Presentation made to the financial community and partner companies in July 2010 stated that - "We do not do acceptance or deposit business but act in the first place as a service house giving advice to our industrial and merchant clients, and in the second place as a placing house. In addition to the select group of clients, we have around us a group of 20 to 25 companies for all of which we act as general advisors and in many of which we have a sizable ownership voice on behalf of syndicates led by us and participated by others. For those 20 to 25 companies we not only arrange the financial facilities that they require both in the way of long-term and short-term money, but we also advise them on the issues of strategy. We have made it a rule that the financial risks which we take never represent in any case more than a certain very limited percentage of the capital of Defoe Partners. Our chief risk is in our overhead expenses which have to be relatively heavy considering that the sort of work we are doing depends on the highest possible quality of human talent and management." [9]
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