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City Investments

City Investments. Best in France Case Study Sept - Dec 2004 . By: Ms. Khammar, Mr. Skibiski, Mr. Martini, Mr. Lang. Company Presentation Company Evolution Company Services Company Values Company Clients Why did it go to France Constraints in France Adaptation to France

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City Investments

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  1. City Investments Best in France Case Study Sept - Dec 2004 By: Ms. Khammar, Mr. Skibiski, Mr. Martini, Mr. Lang

  2. Company Presentation Company Evolution Company Services Company Values Company Clients Why did it go to France Constraints in France Adaptation to France Key Constraint Costs Key Benefit Numbers Essential Advice Executive Overview

  3. City Investments City Investments is a Pan-European private investment and financial advisory boutique in the fields of real estate, secondary private equity and corporate structured finance. • The company is currently staffed with 7 heads - 4 directors and 3 advisors • Nationality of the 3 co-founders: Italian, German and British • Company location: Paris Note Due to privacy reasons and along with its “discretion policy”, the company decided not to disclose any financial information in this case study.

  4. Company Evolution Practice Areas Extension Legal Constitution First Operations 2004 2002 2003

  5. Company Services

  6. Company Services Services: • Deal sourcing, selection and structuring • Valuation, audit and due diligence • Purchase and sale negotiations • Financing arrangements • Transaction oversight and facilitation • Portfolio analysis and optimization • Monitoring development and repositioning programs • Investment and disposal strategy formulation and execution

  7. Company Services Services: • Portfolio and fund analysis and optimization • Valuation of portfolios and underlying positions • Acquisition and divestment of limited partnership interests • Transaction coordination and marketing • Risk assessment and new product development • Evaluation of new fund offerings, covering management, strategy and structure

  8. Company Services Services: • Strategic analysis and business valuation • Business acquisitions, divestments and restructuring • Management buy-outs and buy-ins • Capital structure and dividend policy • Capital raising • Financial risk management and hedging

  9. Company Clients Main clients: • Major financial institutional clients (BNL, Merrill Lynch, etc) • Major private equity market operators (Sodipierre Finance, Toros Capital, etc) • Major Property Companies (Commerzleasing, Acanthe Development, etc) What are their expectations? • Counseling in originating, structuring and executing cross-border transactions • Specific knowledge for the target market of interest • Professionalism and competence

  10. Company Values “City Investment aims to build lasting relationships rather than maximize gains on transactions and believes that relationships can endure only if founded on integrity. City Investment derives satisfaction from devising effective solutions and stays with its client to see them through to their strategic and financial goals.” How do they fit with the french values? • The company members are well acquainted with the french values, given their Grande Ecole background education and the consistent business experience gained in the country. • From the beginning “no cultural friction” has been experienced. The perfect fit is further “guaranteed” by the newly acquired managing director: Mr. Pierre Nollet.

  11. Company: a French presence? • The company recently welcomed Mr. Pierre Nollet (french nationality) as a new Managing Director • The introduction of a french presence in the business partner’s base was considered “crucial” in order to expand the practise areas and to re-enforce the strategic network indispensable to succeed in the french business arena

  12. Why is it located in France The growing business opportunity provided by the French Real Estate market, which keeps on attracting foreign investors, was the primary key to locate the company in France Proprietary deal flow into France through strategic relationships provided by individual co-founders Priviledged networks of investors access

  13. 2004: The Real Estate Market opportunity Source: Inflowing investments in Real Estate products break-down Le Marche de l'Investissement (2004); AXA Reim Strategie d’Investissement 2004/05

  14. Did it consider another location? • Managers at City-Investments did not initially consider any other possible location given the French real estate brokering business perspective….. ……however, when asked about the future, they do not exclude to relocate should the business climate change or cost constraints become “too suffocating” !

  15. Constraints in France What are the principle constraints the company foresaw before going to France? • Bureaucracy • HR costs in terms of labor flexibility Did they discover any other? • No efficient government help or assistance programme for junior enterpreneurs Which are the worst constraints? • Bureaucracy is definitely the worst How do these constraints differ with possible other locations? • UK, Ireland, USA do seem to offer a more “business friendly” environment for enterpreneurs

  16. Key Constraint Costs What are the key costs of operating in France that are more or less than operating in other locations? • Corporate Tax, higher than other possible European locations • External consulting services, i.e. Legal assistance, higher than other possible european locations • Real estate is costly in the central Paris area

  17. Adaptation to France What kinds of adaptations was/is the company making to its people management systems? • All the member of the team are to be proficient in French given the high exposure to French business partners, therefore continuous focused language trainings are provided • Internal Communication Policies • Compensation strategy constantly evolving in accordance with the French constraints

  18. Key Benefit Numbers What are the key benefits of being in France? • Market potential • Central European location • Business platform testing possibility foreseeing the launchin other European countries • Quality of life • Prestige of the location (Paris) • Excellent transports available (TGV infrastructure)

  19. Essential Advice What advice do you offer to other companies in this sector concerned about France as a location? • Thorough Market Study via serious partners • Building own consistent network of strategic relationships before entering the market • About the french environment: clear understanding of the “Rules of the game” ....the french bureaucracy

  20. We Thank Nicola Ciavarella Managing Director 12, rue de la Montagne, 92400 - Courbevoie – Paris Email: nicola.ciavarella@city-investments.com, Telephone: Falk Wisinger Managing Director 12, rue de la Montagne, 92400 - Courbevoie – Paris Sam Samarasinghe Senior Director 12, rue de la Montagne, 92400 - Courbevoie – Paris

  21. References • Website: www.city-investments.com • Internal reference: Mr. Nicola Ciavarella • External reference: Paris Region/Regional Markets (1st q 2004),CBRE • Appendix: Best in France questionnaire, www.bestinfrance.org

  22. Our Team Maya Khammar MBA 06 Gregory Skibiski MBA 06 Piero Martini MBA 06 Chuanfeng Lang MBA 06

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