Dresdner wins in art where it failed in i-banking

February 4, 2010

Dresdner Bank has learned a thing or two about men walking over the years. The German bank tried to buy its way into the City of London and Wall Street by acquiring investment banks. Shortly thereafter bankers at both firms walked out the door. But where Dresdner failed in commerce it appears, belatedly, to have triumphed in art.

The sale of a bronze entitled “Walking Man I” by Swiss sculptor Alberto Giacometti fetched 65 million pounds, some $104.3 million, on Wednesday night in London, a record for a work of art at auction. Dresdner bought the piece in 1990 for a price likely to have been in the single digit millions.

The result compares favorably with other shopping excursions undertaken over the years by Dresdner, which last year was sold by German insurer Allianz to Commerzbank. The first of these big splashes was its 1995 acquisition of Kleinwort Benson, the London merchant bank founded in 1786.

Dresdner paid $1.5 billion for the firm, which at the time boasted a strong position in UK corporate broking and M&A.

That position eroded as rainmakers like Simon Robertson and Tim Shacklock decamped for Goldman Sachs  and Gleacher, respectively.

Dresdner did add some trading businesses in foreign exchange and fixed income, which it still maintains. But the broking and M&A arms were eventually shuttered. The Kleinwort Benson name continues in the wealth management arm that Commerzbank sold to private equity shop RHJ for just 225 million pounds last year.

Some 20 years after picking up the Giacometti, which was originally intended to appear in Chase Manhattan’s downtown Manhattan lobby, Dresdner went shopping in New York. In 2000 it paid $1.4 billion for Wasserstein Perella, the advisory boutique set up by the late Bruce Wasserstein, and threw in another $200 million to retain its talent. Wasserstein and his team left within a year.

Add up the cost of these deals and adjust for inflation, and Dresdner looks to have splashed out around $4 billion for assets that arguably are worth a few pennies on the dollar now. Had the bank invested more in assets incapable of walking out  — like the Giacometti, despite its name — it might now have more to show for it.

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