Germany was tundra for investment bankers. When Stefan Jentzsch joined Goldman Sachs & Co. in 1987, most mergers and acquisitions were arranged directly between company board members or through corporate lawyers. "In those days, we used to say our main competition was `No Advisor & Co.,"' recalls 38-year-old Jentzsch.
That changed when the Wall came down and Bonn was suddenly saddled with East Germany's 14,000 state-owned enterprises--many of them financial basket cases. The Treuhand, the agency set up to administer and privatize those companies, had no choice but to bring in professionals--including Goldman. In some ways, the Treuhand's decision awakened corporate Germany to investment banking advice. "That kick-started the process investment banks are all benefiting from," says Jentzsch.
Professional help meant foreign expertise, because German banks were woefully short on M&A experience. And Jentzsch was a natural for the job. Born in the gritty West German town of Ludwigshafen, he studied business and law before joining Bayerische Vereinsbank as a credit department trainee in 1985. Two years later, he was working in Goldman's London office. Goldman opened up in Germany in 1990; Jentzsch followed two years later.
Goldman was soon one of Bonn's biggest advisers. And working for the Treuhand provided contacts across the country--which has helped Goldman become the largest foreign investment bank in Germany. The ongoing privatization of Deutsche Telekom, which started in 1997, and last year's $36 billion merger of Daimler Benz and Chrysler Corp., are ultimately the results of the Wall's collapse, Jentzsch says. He headed the team that launched the DT deal.
The end of communism also boosted the German capital market, since reconstructing the East made Bonn a big borrower. "Capital was suddenly scarce, and companies had to look for new ways to raise money," Jentzsch says. "There used to be 10 new listings a year in Germany. This year there'll be 150."
Jentzsch, who is married and the father of two, remembers half a day he once spent in East Berlin. The Wall was in place and the city markedly drab. Comparing that memory with the Berlin of today, he has two words for the past decade's changes. "Absolutely incredible," Jentzsch says.