Baird’s head of European investment banking talks to Marie Kemplay about the keys to success in mid-market M&A.

David Silver

David Silver

Baird, an American multinational financial services company with particular expertise in mergers and acquisitions (M&A) advisory, celebrated its centenary in 2019 with the tag line: ‘100 years of client service’. For David Silver, head of the firm’s European investment banking business, that focus on delivering quality for clients is the central thread running through everything Baird does. “If you’ve only got advice to provide, you’d better provide the best possible advice,” he says. 

Baird focuses on mid-market M&A, a part of the market where clients are typically personally invested in the fortunes of their businesses, such as families or individual entrepreneurs. “The point is that we’re working with people who really care about their businesses,” adds Mr Silver.

Career history: David Silver  

  • 2012 Head of European investment banking, Baird
  • 2007 Managing director, Baird
  • 2006 Head of business services, Baird
  • 2004 Director, Baird
  • 1999 Vice-president, Baird
  • 1998 Associate, Granville (acquired by Baird)
  • 1997 Associate, Henry Ansbacher
  • 1994 Solicitor, Berwin Leighton

For Mr Silver, it was this enjoyment of working closely with clients and getting to know their stories that attracted him into M&A banking in the first place. Prior to joining Baird 22 years ago, he had worked as a corporate lawyer specialising in property finance. But for Mr Silver, working on the legal aspects of transactions was “too far away from the action”. “Clearly we were playing an important role, but often the clients weren’t looking to us as lawyers to provide the commercial advice or make the commercial decisions,” he says. “The people who seemed to be the key consiglieri were the M&A bankers.”

Mr Silver stresses it is the people aspect of the work and helping to achieve “meaningful deals” that continues to engage him, something he believes he has in common with the wider Baird team. “If you were to speak to some of our senior bankers, it is definitely connecting with phenomenal entrepreneurs or investors that gets you motivated,” says Mr Silver. “We take a huge amount of pride in the advice that we provide and the outcomes that we get, and generally I think that’s what motivates people here.”

The long game

Building lasting client relationships and taking a long view is something Mr Silver believes sets Baird apart from others in the industry. “We do take a very long-term view,” he says. “Lots of our clients are people we’ve worked with for five, 10, 15 years.” He adds that in this context it is a positive that Baird is privately owned, because there is not the scrutiny of quarterly public reporting.

Baird’s business model is stable. It has a number of core sectors in which it specialises – consumer, healthcare, industrials and technology and services – and prioritises tried and tested approaches in how it operates. “I think people who work here don’t have to worry about big changes in strategy,” says Mr Baird. “For us it is about sticking to a trusted approach of if you provide really good advice, generally good things will happen.”

From a financial perspective this approach has consistently paid off for Baird. The six years to 2019 were each record-breaking revenue years for the global investment banking business. Though 2019 did see a year-on-year decrease, Mr Silver remains philosophical. “You can’t have a record year every single time,” he says. He wryly describes it as a “high-quality decline”, given that 2019 was investment banking’s second highest year of revenues, and quarter four was its best ever.

Competition time

The mid-market is becoming an increasingly competitive battleground: some of the world’s biggest banks, such as Goldman Sachs, who have tended to ignore this end of the market, are increasingly trying to make their mark. Goldman Sachs has reportedly hired 50 bankers into its so-called 'cross-market group' to win Europe, Middle East and Africa business, and other banks are also thought to be building up teams.

Mr Silver does not feel unduly threatened by these developments, however. “Goldman is a phenomenal business, so it will be interesting to see how it develops,” he says. “But the larger banks have grown up in a world where they’re very much focused on the top 20 potentially transformational deals that could happen in a sector, and their senior guys are less focused on those $500m or smaller deals. We are set up to provide advice to mid-market companies, that’s our reason for being.”

Baird's focus on mid-market business can also be a positive when it comes to recruitment. Junior bankers at the company will find themselves working on a wide variety of deals from day one, something that is not always the case at larger firms.

“Our junior bankers get a huge amount of experience,” says Mr Silver. “Here, when they’re working on a deal they’ll be meeting the senior management teams and become a key part of the transaction from a very young age.” The team in Europe has expanded in size considerably in the past two decades, from a handful of professional staff to a team of more than 70 people.

As new staff have come on board, Mr Silver has been keen to preserve Baird’s collaborative and supportive culture. The company has been recognised as one of Fortune’s top 100 places to work for the past 16 years. “One of the challenges we have is that sometimes people join Baird with a perception of what investment banking is like and they’re surprised by what they find,” says Mr Silver. “And with senior people as well, sometimes they haven’t come from a place that’s team-orientated, they’ve come from places where everyone is talking about ‘I’ rather than ‘we’. And I think we have to emphasise all the time that that isn’t how it is here.”

Many Baird staff own shares in the business, with no one shareholder having a particularly large holding. “I think that breadth of ownership does mean that people in the organisation do feel much more connected to the business,” says Mr Silver. At a global level, everyone working in investment banking works within the same bonus pool and there is also a single global profit and loss account. “We feel that’s the right way to get everyone operating together as opposed to thinking just about their own sector or geography,” says Mr Silver.

Expert opinion

Mr Silver also feels Baird is able to differentiate itself through its sector expertise. It has senior bankers who are focused on very narrow sub-sectors: Mr Silver mentions a banker based in the US who has specialised in the filtration sub-sector within the industrial sector for his entire career. Baird takes a global approach to serving its clients, so although that particular banker is based in the US, local teams will ensure that knowledge is available to relevant clients internationally. Although Baird does not have ‘boots on the ground’ everywhere in Europe (its main base is in London, as well as having an office in Frankfurt), its strong sector expertise has enabled it to win business across the continent such as in Belgium, France, Italy, Luxembourg, Scandinavia, Spain and the Netherlands.

An example of this is Baird’s involvement in private equity firm KKR’s sale of French customer experience and business process outsourcing (BPO) provider Webhelp to Belgian investment holding company Groupe Bruxelles Lambert in 2019. Mr Silver says Baird was brought on board specifically because KKR was impressed by its track record within the European BPO sector.

“This was a €2.4bn deal,” he says. “Often you wouldn’t envisage a mid-market bank working on a deal of that size. And France is also probably one of the hardest geographies to crack. I wouldn’t say that we’re doing a huge number of deals in France, but it is a strong example of the impact of our sector expertise.”

Core strength

The mid-market sector has changed a great deal during the two decades that Mr Silver has worked at Baird, and he is hopeful that the firm will continue to develop alongside its clients. “If you think about what was mid-market not so long ago, it was $100m to $500m, and as Baird and our clients have grown, the definition of mid-market has definitely pushed up,” he says. “From a size perspective, we have been working with some companies that have grown and grown.”

Mr Silver cites Alexander Mann Solutions (AMS), a recruitment outsourcing company that was founded by entrepreneur Rosaleen Blair in 1996, and a firm that Baird has been working with for the past 15 years, as an example of this type of relationship. AMS has been sold three times in that period. At the first sale Baird was involved in, in 2007, AMS was sold by private equity firm Advent to fellow private equity firm Graphite Capital. In 2018, in the third sale, it was sold to Omers Private Equity for £820m ($1.07bn). 

“There are a couple of us who have known the business throughout that period,” says Mr Silver. “It is very rewarding. In a small way you feel like you have made a difference both for individuals but also the development of a business like that. I think one of the things that we are most proud of is that we’re continuing to stick to the knitting in terms of the core middle market, but also the range of deals is broadening.”

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