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Banking & Finance



Close-up: Nick Chini

Boutique business consulting firm thrives in San Diego


The Daily Transcript

When business consulting shop Bainbridge Inc. decided it was time to establish a West Coast presence in the late 1990s, the company ini- tially looked to San Francisco, the epicenter of the technolo- gy boom.

“Then we did a little more homework and decided the quality of life (in San Diego) is better,” said managing princi- pal Nick Chini.

The lower cost of living and numerous universities in close proximity were other consid- erations.

A decade after choosing San Diego as the destination for its main office, that decision has turned out to be key in the evolution of Bainbridge — even though there are no Bainbridge clients in the area.

What began as a small shop to help a university professor

research projects has grown into a nationwide business providing management and investment advice to some of the highest profile companies in the world.

One of the critical drivers of that growth is within walking distance of Bainbridge head- quarters in UTC: the University of California, San Diego.

UCSD graduates now account for more than half of Bainbridge’s full-time recruits, said Chini, who is active in advising clients with private equity and M&A deals as well as managing the firm’s overall execution from San Diego.

“UCSD has been a huge advantage,” Chini said. Graduates “want depth of experience and diversity ... there is no other field out there that gives you the expo- sure to the range of industries, the range of functions — sales, strategy, product development

  • than consulting.”

With no other major con- sulting groups in San Diego, Bainbridge has essentially had its pick of the litter among those that would like to stay local, often choosing from a field of 20 to 30 well-qualified

candidates per according to Chini



Founded in 1975 by author, consultant and professor Boulton Bainbridge Miller, the company now operates nearly a half dozen offices in California, Massachusetts, Nevada and Texas.

Bainbridge has three areas of expertise: management con- sulting for large capitalization companies, advising private equity groups and hedge funds on acquisitions and, most recently, managing the firm’s own private equity funds.

Chini declined to reveal the names of the firm’s clients, although he did note that

Microsoft (Nasdaq: MSFT) was once a client. He did say that Bainbridge currently advises some of the largest companies engaged in sectors ranging from the Internet and hardware to financial services

and energy. Everything



research at Bainbridge.

“What really sets us apart from our peers is our primary source research,” Chini said. “Information is power, and that leads to better executive decisions.”

Though Chini isn’t specific about what this research entails, for consulting he said it often involves surveying customers and clients of com- panies in order to present management with “a perspec- tive they usually don’t see directly.”

Chini has been involved with Bainbridge since he con- nected with the nascent firm

Photo: J. Kat Woronowicz “Information is power,” says Bainbridge managing principal Nick Chini.

at the Massachusetts Institute of Technology, where he earned an MBA. There he was among a group of students and professors in high demand as the technology boom was picking up speed. “We were at the right place

at the right time,” Chini said. “What was really just a hobby

  • a way for us to make ends

meet in grad school — the next thing we knew had became a long-term business.”

jeran.wittenstein@sddt.com Source Code: 20080124cre


Continued from Page 1 “So that’s a real challenge, how do you do that?” he added.

Another dilemma in the work force is tapping labor south of the border, which has effects on wages, the educa- tion system and the city’s quality of life.

“We really need to go back and take a look at the work force, how it’s going to impact us and how can we issue those work permits,” Snyder said with regard to illegal workers coming across the border with families.

Law and finance Like most cities around the country, San Diego has felt the effects of the subprime crisis and the resulting slowdown in the U.S. economy.

And while relief may be more than a year away, California’s third-largest city is better equipped to weather





according to a recent round- table panel.

“I think we’re very resilient in San Diego,” said San Diego’s Jay Jeffcoat, a com- mercial litigator with DLA Piper. “We have a number of sectors that can keep us going. If the tech industry has some weaknesses, than hospi- tality or defense will be a (positive) factor for the next couple of years.

Jim Gilpin, a partner in the San Diego office of pub- lic agency law firm Best Best & Krieger, said, “I think we’re going to be insulated a bit from what some of the other markets are incurring simply because of the gov- ernment spending here. We’ll get through. Simply the natural growth of the region is going to drive us to

the future.”





Diegans’ optimism for a quick economic recovery is seen in the aftermath of October’s

devastating fires.

Most families who lost their homes are re-building, according to DLA Piper’s Jeffcoat, including those who don’t plan on staying. The re- building process is expected to take between one to two years.

Corporate attorney Stephen Ferruolo, chair of Goodwin Procter’s San Diego office, said the city quickly recovered from the dot-com bust in the late 1990s, and he sees the region overcoming this latest crisis in a similar fashion.

“It’s a very entrepreneurial place,” he said. “We’ll recover sooner than others.”

That recovery might not begin until 2009, however, or the fourth quarter of 2008 at the earliest, some analysts fear.

“Credit will just be tight and very difficult to come by,” said George Haligowski, president and CEO of Imperial Capital Bancorp Inc. “Consequently,

you’re going to have foreclo- sures that languish and remain unsold.

“If the financial sector is unhealthy in 2008,” he added, “the country’s not going to be healthy in ’08.”

The panelists agreed that no one knows for sure when the economy will finally bot- tom out. Some investors are waiting until the floor is hit before jumping back in the market, which will only pro- long the slowdown.

Despite the best efforts of the Federal Reserve, Haligowski said the country likely will fall into a recession in 2008.

“The Fed is little bit behind,” he said. “I think by having kept the curve flat for as long as they have kept it, they allowed a period of pros- perity unprecedented in the U.S. for a protracted period of time ... but it’s like playing catch-up (now).”

Source Code: 20080124cra

Banks’ scramble for deposits hurts profits


The Wall Street Journal

Even as the credit crunch and weak housing market cause problems for the nation’s banks, there is another goblin lurking in the wings: The basic business of collecting deposits and lending money is becom- ing less profitable.

Many banks that are gearing up to report fourth-quarter results in the next couple of weeks are likely to report nar- rowing in net interest margins

  • a key measure of industry

profitability — already at the lowest level since 1991.

Much of the pinch is being attributed to a scramble for deposits. Even though the Federal Reserve has been cut- ting interest rates, many banks are still offering attractive rates for deposits. A quarterly survey released last week by

Citigroup Inc. (NYSE: C) found that “the competition to raise new deposits” via certifi- cates of deposit and money-

market intense.”



The survey noted that while some banks have followed the Fed’s lead and trimmed rates, others have been offering pro- motions that are well above the federal-funds target rate of 4.25 percent.

That is particularly the case for financial institutions that have run into difficulties and need those deposits to fund loans and build up their capi- tal levels. Countrywide Financial Corp. (NYSE: CFC) and E-Trade Financial Corp. (Nasdaq: ETFC) — both of which have been hit hard by the credit crunch — are offer-

See Scramble on 7

Northern Trust Banks are members FDIC. ©2008 Northern Trust Corporation.





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