Firm hopes its wealth management services will attract Republic's richest, writes Una McCaffrey

One of the mysteries surrounding life in this post-Celtic Tiger State is just how rich we all are. People like to think they know, with property portfolios, flashy cars and expensive lifestyles all offering clues as to particular states of wealth.

The true answer is to be found elsewhere, however, with the investment houses and stockbroking firms harbouring more knowledge about all the money floating around. This is, after all, where wealth builds on itself to make the prosperous even richer.

One less obvious location is the office of Key Capital, the five-year-old corporate finance "boutique" that has seen its fair share of action since inception.

The latest "adventure" for the company is to tap into the Republic's growing band of wealthy individuals or families by offering bespoke wealth management services.

Managing director Conor Killeen believes the wealth management sector is underdeveloped in the Republic, particularly on the product sophistication side.

It is for this reason that the firm is in the process of linking with German giant Deutsche Bank to offer a range of refined products for high net worth individuals (read multimillionaires if not billionaires).

Key Capital's directors argue that there is a lack of experience in such areas in the Republic outside companies such as Davy.

This means wealth has been concentrated in relatively simple classes, such as cash, property and equities.

Under the relationship with Deutsche, which has not yet been approved by the Irish Financial Services Regulatory Authority, Key Capital will distribute the bank's products as well as manufacturing and selling its own to very wealthy clients.

A selling point for the products is that they will offer investors a chance to diversify out of property at a time when the asset may be running its course.

"This is the pet project for the year," says Killeen, no stranger to heavy-duty deal-making. The Key Capital business, founded by Killeen along with Kyran McStay and Ken Mintern, started out with a mostly advisory hat, specialising in corporate finance.

For a tight team, the Key directors developed a high profile very quickly, in particular through involvement with the leveraged buyout of Alphyra in 2003. The deal caused some controversy, after some shareholders accused Rendina, the management vehicle that led the buyout deal, of being hostile to other offers.

This period saw the firm advise the AIM-listed Newcourt Group on its formation, acquisitions and financing. E-learning group Riverdeep also took guidance on a number of deals.

A defining moment for Key Capital came in 2003 when the company and its directors supported a management buyout at stockbroker NCB, then owned by Royal Bank of Scotland. This saw Key Capital being subsumed into NCB and the directors taking senior roles in the firm.

In the end, the relationship didn't quite work out, with differing business cultures leading to almost all of the Key Capital directors exiting NCB a year later.

Killeen says the deal "looked too good to be true". The timing was significant, as it placed the firm on a new path while it was still very much in a growth phase.

McStay, another founding director, says the NCB experience was positive for the team, with the departure giving Key Capital an opportunity to focus on its growth strategy.

With wealth management at the forefront of this, the firm is also operating with a private equity emphasis in the capital markets and corporate finance sectors.

"You have to build a commercial relationship with people. This means bringing them transactions," says Killeen. The idea, of course, is to "generate the sort of return that beats the pants off the equity market".

McStay says it is a matter of changing the way investors think about private equity. Until now, he suggests, investors might have described a typical transaction as a €50,000 injection into an IT firm. People may also be aware of venture capital companies, but they would never be able to access the high stakes and returns offered by Cinven, Kohlberg Kravis Roberts or Blackstone.

These firms work at an advanced level, completing deals such as Madison Dearborn's €3.9 million take-private of Jefferson Smurfit in 2002, or Warburg Pincus's €630 million acquisition of an 88 per cent stake in Clondalkin in 2004. "That industry used to be driven by large insurance companies," says McStay.

But now the market balance is shifting, with products developed by Deutsche and others allowing wealthy individuals to gain access to the biggest private equity deals.

This year has also seen Key Capital manage a €500 million fund-raising for London-listed SVG Capital, a private-equity investor and fund management business. About €250 million of this was directly raised by the Dublin team, some of it coming from banks and "family offices" that manage finances for prosperous business families.

This fundraising came in the wake of a €400 million securitisation in private equity for SVG.

At about the same time as this year's deal, SVG Capital took a 20 per cent stake in Key Capital.

Killeen says the NCB experience of bringing in Sean Quinn's Quinn Financial Services as a backer showed Key Capital the benefits of having a stronger partner (Killeen is now a non-executive director of Quinn Group). SVG meanwhile gets the benefit of Key's structured finance and capital markets expertise.