Unlocking Corporate Secrets

FRANCE Unlocking Corporate Secrets

"Every time we send a man out, we consider it an expedition, a real trip into the desert. We always go fully equipped, taking our own water and supplies, as it were." So says Marc Alexandre, 37, managing director of the Union Internationale d' Analyse Economique et Financiere, a Paris-based company better known as Eurofinance. Alexandre's desert is Western Europe, where companies keep information secret that would be routinely available in the U.S. The job of Eurofinance's well-equipped men is to unlock the secrets and break the silence, collecting for clients complete statistics on corporate holdings, activities and profits throughout a continent.

Eurofinance is 80% owned and chiefly supported by eight European and three U.S. banks (Pittsburgh's Mellon National, Chicago's Northern Trust and San Francisco's Wells Fargo). For $50,000 a year from each of them, plus $30,000 from four associate subscribers, the company's 80-man staff prepares quarterly reports on the European economy and the most thorough corporate analyses and industrial surveys obtainable on the Continent. Last week Eurofinance clients were digesting a fresh two-volume, 254-page analysis of Western Europe's auto industry; it not only pinpoints which firms produce how much in what countries, but also forecasts the market through 1970. Such a study is extraordinary in Europe. "Our job," says Alexandre, "is to fight tradition. We are unorthodox."

In the Bedroom. Alexandre's personal encounters with corporate secrecy led to Eurofinance's founding in 1961. A graduate of France's Institut d'Etudes Politiques, he also took law and economics degrees at the University of Paris and studied at Harvard's Public Administration School before going to work for Lazard Freres in Paris as an investment analyst. Alexandre soon became disturbed by the obstacles that traditional business secrecy placed in the path of expanding business activity. He decided to shatter the secrecy with an organization that would function partly like a Wall Street brokerage house and, by necessity, partly like the French government's intelligence-hunting Deuxieme Bureau. With a loan from Zurich's Swiss Credit Bank, he opened offices in his apartment: his staff used a bedroom and dining room, his secretary typed in the bathroom, and the mimeograph machine whirred in the kitchen. Eurofinance made a profit the second year, moved to its present elegant quarters on Paris' Avenue Hoche.

Eurofinance men pore over speeches, annual reports, newspaper stories and miscellany for clues to corporate activity, maintain 10,000 files on British and Continental companies. The firm's 20 analysts and four economists, most of whom hold doctorates and speak three or four languages, piece together all the items they can find on a company being surveyed, spend up to six months preparing a preliminary report. When this work is done, they take their findings to the company for comment--and usually hit so close that the company is impressed enough to cooperate. Says Hungarian-born Deputy Director Anthony de Jasay: "We fill in our tables until just a few elements are missing, like a jigsaw puzzle. The companies feel almost morally obliged to furnish the remaining pieces."

The Reason Why. Eurofinance has lately broadened its operations, now gets a quarter of its revenue from advising institutions that buy European stocks and from acting as a consultant on corporate mergers. Still, unmasking economic truth remains its passion. Not long ago, a Eurofinance researcher discovered why Italian statistics on heavy electrical engineering came out three months after the French figures and usually showed about half the French total:. the Italians, having no production figures, simply guessed after seeing the French reports.

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