bank shot

Switching to the Other Side

Oliver Behrens is headed to Morgan Stanley. Source: DDP
I'm off. Oliver Behrens is headed to Morgan Stanley.
  • Why it matters

    Why it matters

    Morgan Stanley’s business in Germany is going well, but a few issues from the past still need to be resolved. Mr. Behrens hopes to take over with a clean slate.

  • Facts

    Facts

    • Mr. Behrens’ contract with Deka runs through 2015. He is hoping to get out early.
    • The interim CEO at Morgan Stanley wants to resolve thorny issues involving a deal for energy provider Energie Baden-Württemberg.
    • Morgan Stanley was an adviser in the acquisition of Merck’s non-prescription drug division by German rival Bayer.
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    Audio

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Oliver Behrens, the deputy chief executive at Deka Investments, has been chosen as new head of German operations for U.S. banking giant Morgan Stanley, Handelsblatt has learned.

Mr. Behrens, who wears characteristic round, horn-rimmed glasses, is considered the right manager to help move Morgan Stanley’s German branch forward. Business has been going well and its stake in mergers and acquisitions has been growing. But it might not be all smooth sailing, as some thorny issues from the bank’s past still need to be resolved.

An expert in capital markets, Mr. Behrens still has a few details to work out with his current employer Deka, which is based in Frankfurt and is the securities-services arm of the national network of savings and loan banks in Germany. He wanted to leave by the end of September, but negotiations with the management board are going slowly. He didn’t anticipate this problem, although his contract was due to run to the end of 2015.

Insiders say Mr. Behrens is eager for his new challenge and is ready to compromise. But the 50-year-old is caught in the crossfire. Word is that Georg Fahrenschon, the head of Deka’s supervisory board and president of the national savings bank association, came to an agreement with Mr. Behrens. But he underestimated resistance from the savings association’s presidential committee. Its members include Mr. Fahrenschon’s long-time adversary Rolf Gerlach, who heads a regional savings bank chapter in North Rhine-Westphalia. Critics accuse Mr. Fahrenschon of making concessions too quickly.

The fact is, however, the savings banks owe a lot to the managerial skills of Mr. Behrens. He left his job as global head of structured securities and money-market products at Deutsche Bank in spring 2012. The head manager at Deka at the time, Franz Waas, had unexpectedly been fired the day before at the company’s annual press briefing.

In mergers and takeovers in Germany, Morgan Stanley ranked fourth after the first nine months of 2014, behind BNP Paribas, Deutsche Bank and Goldman Sachs.

Mr. Behrens took over Mr. Waas’ job for a half-year. He would have been happy to continue as head of the firm specializing in public-law funds, he said publicly. But the savings banks preferred another candidate: Michael Rüdiger, formerly of Credit Suisse.

Now that is all in the past.

Mr. Behrens is putting his hopes in a meeting Monday of the presidential and nominating committee of Deka’s management board. Insiders say there is a 50-50 chance they will reach a solution that is acceptable to all parties.

Mr. Behrens is fortunate his new employer is in no hurry. Lutz Raettig, who later intends to become head of the supervisory board, is leading Morgan Stanley’s Frankfurt subsidiary in the interim. Mr. Raettig can simply stay on for a few extra weeks.

Before handing over the office, though, the 71-year-old Mr. Raettig wants to resolve thorny issues involving a deal for the energy provider Energie Baden-Württemberg.

Morgan Stanley’s former CEO Dirk Notheis and then-state premier of Baden-Württemberg, Stefan Mappus, had negotiated the repurchase of shares in EnBW from Électricité de France. A controversial exchange of e-mails involving the deal later emerged in which, among other things, German Chancellor Angela Merkel was referred to as “Mutti,” German for  “mom.” Mr. Notheis later apologized for  “inappropriate and unprofessional language.” Today he is working as an adviser for the Austrian government on the liquidation of the struggling bank Hypo Alpe Adria.

What remained was the suspicion that, at a price of €4.7 billion ($6 billion), Baden-Württemberg paid too much for a 45 percent share. The judiciary system in the state capital of Stuttgart is investigating possible breach of trust. The word in financial circles is Morgan Stanley hopes to reach a solution by the end of the year.

Morgan Stanley’s newly-designated chief executive, Mr. Behrens, could then take on his new position unencumbered by burdens of the past.

The New-York based global financial institution has only recently become a high-profit earner again. On Friday, James Gorman, the head of Morgan Stanley, announced “all the signs are set for us to deliver outstanding profits.”

Morgan Stanley’s day-to-day business in Germany appears to be going well. In mergers and takeovers in Germany, it ranked fourth after the first nine months of 2014, behind BNP Paribas, Deutsche Bank and Goldman Sachs. Morgan Stanley in Germany negotiated 17 deals with a volume of almost €45 billion, according to financial-data provider Thomson Reuters. The bank was also an adviser in the acquisition of Merck’s non-prescription drug division by German rival Bayer. With a volume of more than $14 billion, it is the year’s biggest transaction so far.

Mr. Behrens can build on this. Just like Mr. Raettig, he doesn’t fit the stereotype of the investment banker. The manager, who has a tendency to be ironic, is known as a team player by former colleagues. They expect him to do a good job — even if he comes from the investment-manager side of the table.

 

Robert Landgraf is deputy head of the finance section of Handelsblatt, and based in Frankfurt. To contact the author: landgraf@handelsblatt.com.

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