was it just my irrational exuberance..?

Time passes frighteningly fast in the absence of any reality checks in the form of exams which are tormenting the hell outta my brethren (or whoever’s left of the pack) back in perth right now. I’m now into the third month of my entrapment in Singapore’s biggest rat maze. I guess this routine life, bereft of any milestones or time-markers typifies the monotony of working life. And I suspect that the one thing that’s really keeping me enthusiastic about my work (apart from my misplaced faith that I can actually meet that special someone in the maze) is the fact that I see the finitude in my time in the rat maze, for now at least. Against the sweet temptation of procrastination, I’ve finally lodged my official honours application a good month before the deadline and if all goes well, I should be back in perth by feb.

************************

just last Thursday, I followed a senior to a client meeting to take minutes for an information session to draft the pitchbook for this subsidiary which we were going to sell. The parent company was looking to divest the subsidiary and the management of the subsi was understandably rather apprehensive especially since it’s a rather tightly knitted industry, and interested acquirers will in much-likelihood be a local competitor who is also likely to be a former employer of most of the managers at the subsi - although that doesn’t necessarily have to be the case either. And so the good o’ folks at the subsi who painstakingly built up the business from scratch, naturally became a little emotional about the whole process and the information session gradually side-tracked to an exercise into nostalgia.

My colleague tried to explain to them that a divestment isn’t necessarily a bad thing especially since a strategic buyer from a complementing industry may create new synergies. That didn’t seem to stick. The managers of the subsi were all middle-aged, traditional Chinese uncles. So in an effort to placate their fears, I tried to draw an analogy which had been going through my mind for the past couple of days.

I tried telling them that selling a subsidiary off, is like ‘marrying (betrothing would probably be a more appropriate word) off a daughter’. And that every parent would wish to find the only the best for a husband to their daughter, and likewise, the board (of the parent) will not hang the subsi out to dry and sell them off to a competitor only to see their ‘daughter’ cannibalized. ‘We (my colleague and i), are the matchmakers’, and if they wish to find a good match and ‘maximise the dowry so as to speak’, we need to have more information regard their future strategic plans such that we need not limit the potential buyers to players in the same industry and market. So implicitly, to help themselves from the prospect to getting acquired by a competitor who is likely to discontinue their competing line of product, they should provide more quality information. Well, I’m not too sure if most of them got what I was trying to get at, and I didn’t exactly get the ‘orh…ah…’ response that I would have wanted, but the meeting did proceed reasonably well after that.

*******************

The longer I work, the more parallels I seem to draw between romance and financial advisory and appreciate the uncanny similarities in the machinations of the two.

Pitching
Courtship is like the pitching phase in every engagement. One prepares and sends teasers (how aptly named) on a massive scale in a desperate attempt to source out interested parties, sending vibes to girls who may show only the remotest of interest. Most of them probably can’t be fucked about responding, and if you’re like me, there probably won’t even be any interested parties to speak of. But as a wise-friend once said, ‘dating is a game of statistics, the more indiscriminate you are, eventually you’re gonna find someone somehow’. The same probably goes for the teaser circulation where the number of interested parties would be a direct function of the length of the circulation list.

Once there’re interested parties, you make them sign a non-disclosure agreement (NDA) and then u prepare the pitchbook. This pitchbook drafting phase would probably be akin to a casual dating phase where the NDA represents some form of obligations between parties and the pitchbook itself as a feeble attempt to justify why you one should necessarily be accorded with exclusive dating or mating rights. A corollary of this would of course be the ubiquitous league-tables attached to most, if not all pitchbooks - yet another desperate attempt to tweak chicks into believing that you are the Alpha Male of the pack. You sell yourself to the chicks, and at times, packaging your dignity away too.

Valuations

Just as how there are many who’ve had the luxury to venture beyond dating nor expressions of interest, some will just never secure any mandates for any engagements. For those lucky ones who do, there comes the valuations phase. It’s a mutual thing I guess. Some guys would value girls on their multiples and see how they fare in comparison to the girlfriends of their mates, the metaphorical ‘transactions multiples’, probably better known as ‘the word around the locker room’. While some girls will probably perform a Discounted Cashflow valuation taking into the account the present value of all future income streams from the poor bloke.

It is however, only the truly astute ones will see beyond the surface and make reasonable estimates about the future growth in the value of the individual, decide on whether there will be returns that will exceed the return on equity that one has invested into his/her better half, as well as the unquantified synergies that will be accrued from a blissful union of the two. Unfortunately, astute men & women alike, are probably as few and far between as truly fundamental investors, and we are probably all guilty of this to some degree.

Due Dilligence

For the truly blessed who found themselves a suitable target who is also palatable to the idea of being acquired, or more politically correct, a supposed ‘merger of equals’, there comes the due diligence (due d) phase. This would probably be the prelude to marital commitments just before a couple takes the leap of faith. It’s there, but not quite there yet. Assertions will be challenged, lies will be exposed. Each will be (or rather, should be) granted unfettered access to data room in search of potential alarms and glitches that would nullify the entire deal. That porsche 911 turbo which he claimed to have parked neatly in his garage just happened to be at the workshop when u dropped by for a surprise visit, or that suspicious bulge at her bikini bottom which you never really noticed until you found oestrogen supplements tucked in a discrete corner of 'her' cabinet. Time to call off the deal. Sad but true, important as it is, due d is probably not on the agenda of most couples.

Transaction Integration/ Corporate Restructuring

Statistically, marriages can hardly be considered the final phase of romance. Ditto, mergers & acquisitions. Measures must be undertaken to facilitate the union merger and changes have to be made. Should things stuff up eventually, more changes have to be made, and financial advisors would turn out to be the proverbial marriage consultants trying to make good of a distressed relationship. Some eventually succeed, but for those who don’t, the private equity firms carved an entire industry out of painting themselves as the white knights in shining armour saving desperate/embittered/unfulfilled housewives from a life of misery.

If a married individual can be described as a security delisted from the stock exchange of courtship, then a key lesson would be, always always, maintain a decent book value and fundamentals, cos' you never know when you'll have to be floated again.

*************************************

Most pure financial advisors pride themselves in offering neutral, unconflicted, independent opinion, perhaps to the extent that of being somewhat detached from the scenario. And just like these less sexy stalwarts in corporate courship, many of us will be destined for a life of living vicariously through the mega deals & dalliances of others, always the agent, but never the principal .

We can only dream of being the proprietor of our own courtship, the fundamental-focused counterweights to the frenzied exuberance of this mad rush for love. It won't be a bubble And if only she knew that.