Anthony Hilton: FD forges path for reconstruction PR

One of the reasons the City has survived so long is that, like Madonna and the Rolling Stones, it is remarkably good at reinventing itself. As times and markets change, its institutions ditch old business models and switch to something more suited to the times.

Anthony Hilton
Anthony Hilton

Investment bankers are famed not just for the speed with which they change but also the brutality with which it is done. They wear their Darwinianism as a badge of honour. Accountants are marginally more civilised. Perhaps this is because it is relatively easy for them to switch from teams doing due diligence on companies seeking to come to the market to raise capital, and instead to find what assets a company has and how much these might be worth in a corporate reconstruction of receivership.

The magic circle of City solicitors has also been quick off the mark. The big City law firms derived a huge amount of their income from transactions of one form or another - be they flotations or mergers and acquisitions. This has dried up. To compensate they too have been trying to establish their credentials in corporate reconstruction - handling the negotiations between creditors and failing companies in a space that used to be the preserve of the lending bankers.

Public relations consultancies have in contrast been slow off the mark - the one clear exception being FD. Last week (News, 9 January) it announced the formation of a team that would focus on company reconstruction and recapitalisation - an area it is understandably convinced will be a major focus of activity in the coming months.

The surprise is not that it has done it, but that other firms have not been similarly high profile in pushing their skills in this area. The morning after the night before - the time when a recapitalisation or reconstruction is announced - is often a PR-free zone. The consultants that represented the business when it was solvent have fallen by the wayside. As a result there is no-one left to tell the story of the business going forward. The demand is there. Presumably FD will not have the field to itself for long.

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