Deloitte has set up a corporate finance venture that will combine the expertise of the network’s UK and Middle East firms. The new company, Deloitte Corporate Finance Limited, is registered and authorised by the Dubai Financial Services Authority.
It will initially focus on offering M&A advisory and support services, valuation, business modelling, IPO advisory, forensic and dispute services, and Islamic finance advice.
Deloitte UK will relocate several partners to the venture within the next few months. They will join a partner from the existing Middle East firm.
Chris Ward, Deloitte’s global head of corporate finance advisory, told the International Accounting Bulletin that the current Deloitte Middle East corporate finance practice of 45 staff will be rapidly expanded to meet client demand.
“They are doing well, they are growing fast, but it’s not of a scale which is able to meet the needs of the marketplace,” Ward said. “The UK initiative, the joint venture which is being funded by the UK, is designed to help the Middle East firm grow its corporate finance business faster than it would do on its own. Within a couple of months we will have transferred seven partners into the business, so there will be eight partners and a total complement of about 80 that we’re planning to grow to about 120 people by the end of May next year.”
Ward said the venture will try to recruit talent locally where possible. He estimates, however, that 20 to 30 professionals will need to be seconded from Deloitte firms across the global network.
Profits from the joint venture will be split 50/50 between Deloitte UK and Deloitte Middle East partners. Ward said Deloitte UK already has a strong working relationship with the Middle East firm.
The UK firm also runs the largest corporate finance practice in the Deloitte network, making it an obvious choice for the new venture. He said that separate joint venture arrangements have been set up between Deloitte UK and Deloitte India, and several UK partners work in Deloitte’s Chinese firm, helping establish its corporate finance arm.
“We adopt a number of different strategies depending on the circumstances of the country. It’s about supporting our smaller growing practices to make sure they’ve got the skill set, the right people and the scale to support our clients,” he said.
Deloitte Middle East chairman Omar Fahoum said the private equity industry in the Middle East is expected to exceed $670 billion in the next ten years.
“Strong fundamentals, rapid growth and greater availability of funding means that deals are set to grow in size from millions to billions,” he said. “By combining our expertise and talent we will be able to ensure that we are at the forefront of this market.”
The International Accounting Bulletin understands that the Big Four and a handful of large mid-tier firms have dedicated corporate finance practices. Although Ernst & Young is the largest professional services firm in the region, Ward believes Deloitte’s current corporate finance practice is of a comparable size.
“Once we’ve got the joint venture fully up and running we will probably be the biggest dedicated corporate finance business,” he added. “What we are setting up is a full service corporate finance business, covering a whole range of things you would expect such as M&A advisory, the due diligence capability, evaluations, Islamic finance, and M&A tax all under the one roof. So in terms of looking at the competition in that context, I think we will undoubtedly have a broader range of capability and services than any other firm.”