The secret to success? A moral code

Date: 3rd April 2018

Author: Unity Haggard

Fabrizio Cerina is a curious case in the world of finance. As chairman of Crédit des Alpes he has overseen the transformation of a small, Switzerland-based bank into a global force to be reckoned with. But his career has not been without its challenges. In fact, Cerina has endured (and overcome) a series of setbacks that would have spelt the end for many others.
The secret to his success? An unusual philosophy. Cerina believes – and has demonstrated – that investment banking is about more than turning a profit. It is about building relationships based on trust and credibility.

Born in Parma, Cerina attended university in Milan, followed by Graduate School of Economics at Stanford and then Graduate School of Business at Columbia. He briefly worked at Lehman Brothers in New York and London, before returning home. He had a wild, improbable dream: he wanted to buy a bank.
Aged just 24, he enlisted the help of a local Italian bank, and bought a 34% stake in Banque de Participations et de Placements, Geneva. A year later, he sold his share to Al-Mashreq Bank, at that time a leading name in the Middle Eastern financial world. He used the funds to acquire a small finance company; under his leadership, it would soon become Attel Bank Group.
Attel was to be the turning-point of Cerina’s career. Over the next ten years, his team built relationships with clients and other banks, eventually listing the company on the Luxembourg Stock Exchange, where it was valued at $125 million.
But in 1991, he arrived to find his bank in disarray. A trader had made a series of unauthorized investments in US securities, accumulating a loss of $46 million. His clients were beside themselves. Cerina was devastated. As he later told the Financial Times: “these clients were people I’d known for years.”1 The lawyers advised him to go down the route of sursis concordataire, by which he was only liable for 10-15% of creditors’ losses. But to Cerina, the solution was clear. He would pay the money back, with interest. It would be “more expensive,” he said, “but honourable.”

It was a singular case in perhaps the entire history of Swiss finance. Voluntarily, he put the company into liquidation and sold everything he owned – including a valuable Venetian masterpiece. The newspapers hailed him as a “banker and a gentleman,” but Cerina disagreed. “I only did my duty.” 2
Unfortunately for Cerina, his troubles were not yet over, with a Lugano public prosecutor launching an enquiry into the events. Whilst the case was quickly dismissed3, Cerina was determined to clear his name from any suggestion of wrongdoing. He successfully sued for damages, and received a historic (and rare) indemnification from the Swiss courts.
Cerina's credibility had been put to the test – repeatedly – and he had passed with flying colours4. And whilst his act of generosity had undoubtedly been admirable, it also proved to be an astute career move. A prominent Austrian family, grateful for his intervention over the affair, offered to help him start again. They provided the funds he needed to acquire a controlling stake in Crédit des Alpes.
Since then, Cerina has gone from strength to strength. Crédit des Alpes has made significant in-roads into US and South American markets, and built a strong presence in European private equity and M&A. In 2009, the group advised GVT during its $4.18 billion take-over by Vivendi – at that time the largest telecoms transaction in the world. On behalf of the Cipriani Group, they negotiated the high-profile acquisition and subsequent sale of the Saxony Hotel in South Beach, Miami. The sale remains one of the largest hotel deals ever completed in the city.
There is undoubtedly something to be learnt from Mr. Cerina’s career, and from his keen belief in accountability. He has confessed a nostalgia for the “old ways of investment banking,” but his success proves that these values are far from obsolete. They have a part to play in the business world of today.

1 . Financial Times, B. Masters, 19th July 2013
L’AGEFI, A. Fabarez, 15° October  1993

2 . Il Messaggero, C. Gu., 25th October 1993

3 . La Repubblica, 25th September 1994

4 . Finance Reconsidered: New Perspectives for a Responsible and Sustainable Finance, B. Paranque  and R. Pérez, 2016, pp 308-309

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