Guy Norton in Almaty -
A new boutique investment bank has been established to service clients in the Baltic states and the Commonwealth of Independent States (CIS) who are looking for moderate yielding, low volatility investment opportunities.
Maximus Capital - which is headquartered in the Latvian capital Riga but also has offices in Baku, Kyiv, London and Moscow - was founded by Gene Zolotarev, who boasts more than 20 years of experience in investment banking and asset management. Before setting up Zolotarev spent 10 years at Parex Bank, Latvia's second biggest financial institution, most recently as deputy chairman with responsibility for capital markets, asset management, brokerage, investment banking and investor relations.
Commenting on the decision to establish Maximus, Zolotarev says: "At Parex Bank we accumulated a wealth of knowledge and experience and felt the timing was right to strike out on our own," adding that a number of the Maximus team worked together at Parex and established a strong track record of delivering positive returns for investors month in, month out.
Maximus is looking to focus on four core areas. First, wealth management, where it will offer clients third-party investment funds as well as tax, estate planning, trustee and corporate services offered by banks and asset managers in the Baltics, France, Germany, Switzerland and the UK. Its key partner is London-based ZAN Partners, a private banking firm established in 2001 by Zain Naqi, a former executive director of investment management at Goldman Sachs, where he managed $800m in assets. "We won't be running a prop book or offering our own funds, as that might create a conflict of interest. We'll be offering third-party products from people we have known for five to 10 years and who boast strong track records of producing consistent returns," says Zolotarev.
With so many people having lost money recently and unhappy with their current service providers, Zolotarev says that the wealth management business is already seeing strong inflows, with around 25% of customers coming from the Baltics and the balance from Russia, Ukraine, Azerbaijan and Kazakhstan. "The message we are sending out to clients is that we will produce consistent, stable results, significantly above bank deposit rates but with minimum volatility - we won't be chasing every last buck and putting principal investment at risk."
The second element of the business will be a full service online brokerage for every asset class, product, currency or derivative on every major exchange around the world. This business will be co-headed by Vladimir Ginzburg, who spent eight years at Parex Bank as head of equity and fixed income brokerage operations, and Jury Volodjonok, who was head of foreign exchange and brokerage services at Parex Bank for nine years. Given the recent sharp fall in markets in the Baltics and the CIS, Zolotarev says there is a growing demand for geographic diversification among its investor base. "A lot of our clients want diversification away from their domestic markets and we can trade 24/7 around the globe."
The third piece in the Maximus jigsaw is investment banking, where it will provide a comprehensive range of financial advisory services on M&A and capital raising transactions for corporate clients in the Baltic and CIS region. "The current tough market conditions are actually favourable for investment banking as we are seeing growing industry consolidation and demand for capital raising services," says Zolotarev. "We can leverage our wealth management client base, who are economically very active in the region. There's no shortage of business, but we'll only be picking the deals that we know we can execute and deliver results on." The investment banking business will be run by a quintet of managing directors including David Lasky, most recently head of global real estate at Russian investment bank Renaissance Capital and a former managing director of debt capital markets at Deutsche Bank in London.
These first three areas of operation are already up and running, while in 2009 Maximus is looking to launch a family of private equity funds that will invest in both the Baltic and CIS markets. "We'll be going out to the markets in the first or second quarter of next year with a view to raising capital for a fund that will target distressed investment-type opportunities in the Baltics and the CIS region."
So far, Maximus has 20 investment professionals based in its five offices and Zolotarev expects this number to grow to 30-35 by the end of the year. "Thereafter we will look to add around 5-10 people a year," says Zolotarev, adding that the current grizzly bear environment for investment banks, means that Maximus is well placed to attract additional high quality, experienced personnel. The firm is also looking to expand its geographical presence, with the likely addition over the coming year of an office in Kazakhstan alongside St Petersburg in Russia and Dnipropetrovs'k in Ukraine. "We are also looking at the possibly of obtaining an asset management license for an operation in Switzerland."
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