Patersons corporate finance chief Aaron Constantine doesn’t like too much attention.
ASKING Aaron Constantine to talk about himself is like pulling teeth.
Patersons’ head of corporate finance deflects almost every personal question and instead speaks about ‘we’ in reference to his deal making practice – despite being named Australia’s best (individual) investment banker by investment consultancy East Coles.
For a Western Australian to win such an award speaks volumes not just about the big changes taking place in the Australian economy and the particular circumstances influencing global events this year; there still must be a level of skill and talent that allows one of Perth’s own to beat the big boys at their own game.
Mr Constantine, who is also an executive director at Patersons, rose to the top of the league table on the back of high regard from clients who took part in the survey. Just to prove this is not a complete one-off, last year he placed fifth. And it’s not as if the supposed boom conditions here have pushed a whole bundle of bankers from WA to the top of the pile. The next best Western Australian, Geoff Rasmussen from Azure Capital, was ranked 19th.
While 47 per cent of the survey’s respondents were mining companies, and the sector has boomed in a two-speed economy that has left much deal making outside of resources at a standstill, East Coles’ research methodology means Mr Constantine’s emergence at the top of the field was about much more than being in the right place at the right time.
Working against him was the East Coles scoring system, which is weighted against the Patersons clientele – typically companies whose plans to raise funds in the future were relatively modest. These are mid-caps, not giants.
But East Coles managing director Nick Coles said that Patersons, led by Mr Constantine, had clearly won over its clients.
“There is a lot of love for them in that sample,” Mr Coles said.
Mr Constantine, who has degrees in commerce and economics, is no newcomer to financial services, having started out at Patersons as a researcher in 1985, beginning his career at the heights of the 1980s boom which, for equities, lasted until late 1987; by this time east coast brokerage Ord Minnett had taken a half share in the business.
Amidst the chaos caused by the ’87 crash, he migrated to the dealing desk.
“After 1987 there were not many people left doing that,” Mr Constantine summarised the reasoning behind the move.
Clearly he was destined for bigger things, at least at Paterson Ord Minnett, where he became a director in 1989 at the age of 26, joining another relatively youthful board member in Michael Manford, who is executive chairman these days. The pair, regarded as the driving force behind Patersons’ success and national expansion, holds nearly half the shares on issue in the company. They have also had colleague and former Patersons Securities director Murray McGill on the journey with them for nearly 20 years.
Mr Constantine admits the business, which appears to have made more of the right decisions than the wrong ones during the past 20 years, has an entrepreneurial streak.
Take for example the process for nominating him to become head of finance more than a decade ago.
“The role became vacant and a few heads on the other side of the (boardroom) table said ‘you are it’,” Mr Constantine says.
Perhaps that entrepreneurialism is borne of equity being closely held by the key directors – alongside some major but distant partners in Ord Minnett (1985-2002) and now South-East Asian sovereign wealth player Brunei Investment Agency.
“Not withstanding that we have employees and shareholders there is a genuine sense of proprietorship to it all,” Mr Constantine says.
“We enjoy coming to work and doing what we do.”
The business has grown to 540 employees in 19 locations around the country, as well as an outpost in London, with $11 billion in funds under advice. It made a profit of almost $6 million on revenue of $148.5 million.
For Mr Constantine’s side of the business, Patersons has raised $8 billion since he took over corporate finance in 930 transactions.
Despite his track record in transactions and this week’s gong as best investment banker, Mr Constantine reckons his success is due to experience and focusing on being stockbrokers that understand their end of the market.
“I am the last bloke to say I am a rocket scientist,” he says.
Mr Manford is nearly as guarded as his business partner, struggling to diverge from the corporate line and let an anecdote from 26 years of doing business together slip out.
“They are mainly just war stories,” Mr Manford says, giving up nothing.
The Patersons executive chairman describes Mr Constantine as a seasoned campaigner whose understanding of mid-cap market needs from both the corporate and investor point of view was unparalleled in Australia.
Mr Manford believes the WA scene, which is dominated by small, very active resources companies, has meant that his fellow director had seen every variation on the theme, giving him an understanding of risk, liquidity and distribution – especially matching mid-cap miners with sophisticated investors.
“He is always optimistic about getting an outcome for both the corporate and investors,” Mr Manford says.
“Having been a broker he has been on both sides.
“He is also capable of saying it like he sees it, he is very transparent. He has respect for that.
“When a transaction is difficult a lot of people struggle to express the decisions that need to be made.”
But what about being named Australia’s best investment banker for 2011? Doesn’t that create a warm glow or make the winner feel a little on top of the world?
In deflecting that final question, Mr Constantine lets one little sliver of light penetrate the corporate veneer of the no-nonsense, self-controlled investment banker.
“I will go home tonight and my wife will make sure I don’t have a fat head,” he says.