When a business begins to falter what are the options? Should its leaders rapidly fold operations and cash in quickly or is there a viable alternative? One firm adept at financial restructuring and operational performance improvement has the track record to prove that choice does exist when profits start to decline.
John Batchelor, executive director, Ferrier Hodgson Limited, explains that the firm offers a range of services, yet its focus is on restructuring and turnaround. This typically takes two forms: financial restructuring such as exchanging debt for equity and operational turnaround through assistance with management. "We are specialists in this area, boasting the largest team in Hong Kong and the Asia Pacific region," says Mr Batchelor.
The firm also differs from regular accountancy institutions in the domain of financial independence. "We don't perform audit or taxation work, so we're unlikely to have a conflict of interest with clients," explains Mr Batchelor. This ensures clients receive unbiased advice from Ferrier Hodgson and action plans are solely based on the task at hand.
Typical clients include business lenders, shareholders or management teams. In each case, the crucial first step is thoroughly assessing the business. "Thorough understanding of a business and its key drivers is essential. This process can take a week, a month or longer," Mr Batchelor notes.
At Ferrier Hodgson, team members must navigate ways around roadblocks and negotiate with other shareholders, devising strategies aimed at achieving turnaround, often through buying time to service debt, coupled with operational improvements. Innovation is a key component of the whole process.
The turnaround process can be lengthy and relationships with clients may last three months to two years. "The greatest satisfaction is seeing a business thrive after our input," says Mr Batchelor.
Regarding scope and experience, Ferrier Hodgson possess more than 21 years' experience in corporate restructuring in Asia. Mr Batchelor adds, "In terms of restructuring work, we remain at the cutting edge, constantly devising new solutions to different stakeholders' problems." This innovation has been recognised in the industry and four awards from IFR Asia for "Debt Restructuring Advisor of the Year" have been bestowed on the firm over recent years.
The major challenge facing the wider industry today is a shortage of talent, particularly in middle and senior management. This stems from unprecedented growth across the region during the past five years, which Mr Batchelor says made careers such as investment banking more accessible to recruits.
Ferrier Hodgson has responded to this shortage by identifying, attracting and retaining the best people in the market and ensuring their remuneration packages remain competitive.
The reward element in recruitment is especially important given Ferrier Hodgson's heavy reliance on experience and the range of skills needed by corporate advisors. Abilities to understand an array of businesses, implement strategies, maintain reporting processes, keep stakeholders informed of progress and work productively in teams are of paramount importance. "Staff are our most important asset," adds Mr Batchelor. "You are only as good as your team."
Adaptability and flexibility are vital in corporate advisory. Projects can involve travelling, and especially in the early stages of a project, operational visits to mainland China are frequent and often essential. The workload is intensive, especially with new assignments when stakeholders want answers quickly, but quieter spells do occur. At any one time, an advisor might have a "live" caseload of three to six companies.
Graduates looking to enter the profession should ideally have an accounting degree. A background in legal studies is also useful. Equally important, says Mr Batchelor, is a team mindset and first-rate communication skills. The ability to make timely and logical decisions under pressure as well as an analytical eye to decipher and compile sophisticated reports are also essential. "We look for individuals who learn quickly and learn on the job," he notes.
New graduates are not thrown in at the deep end. "We have a team environment," says Mr Batchelor. "There is a comprehensive promotional system in place. New graduates are mentored as part of the team. The development of people is vital to our overall success."