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Alfaro, Dávila & Scherer (ADS) is a boutique investment-banking firm that provides highly specialized and sophisticated financial advisory on often complicated transactions involving Mexican and foreign companies. Founded in August 2003 and with offices in Mexico City and Monterrey, the firm offers a portfolio of services, prioritizing mergers and acquisitions (M&A) and debt restructurings but also providing its expertise in capital raising and other activities. The firm’s goal is to facilitate even the most complex financial transaction for a client. The firm’s partners have more than 105 years of combined experience, including their prior work at some of the most renowned financial institutions in both Mexico and the United States.
ADS has a strategic alliance with Moelis & Company (a leading global boutique investment bank that provides advisory services to corporate and governmental clients through 23 offices worldwide). While ADS’s focus is on local and cross-border transactions involving Mexico, it seamlessly collaborates with Moelis in select situations in which deep industry expertise or specialized product knowledge adds value for its clients.
ADS’s principles inspire its operations. The firm aims to be guided by the specific needs of each of its clients and focuses on building long-term relationships. It thus prefers to be engaged on a select number of projects, ensuring the highest quality and delivering the best results. To achieve this, two partners are involved in each transaction throughout the entire advisory process.
International Banker recently asked founding partners Isauro Alfaro and Ricardo Dávila and partners Pedro Scherer, Mariana Fitzmaurice and Rodrigo García Triana a series of questions about ADS’s achievements in the Mexican investment banking space.
I worked at large investment banks such as Salomon Brothers, Donaldson, Lufkin & Jenrette, and Credit Suisse. In my case, as I was promoted, I was given more managerial responsibilities, which eventually became boring and bureaucratic. That’s when Ricardo and I decided to start an advisory firm to spend 100 percent of our time with clients. The challenge was to get our first mandate. As in everything in life, luck and persistence played a big role in getting ADS a good cross-border assignment very quickly.
Our experience at those firms was very enriching, including from a technical standpoint. Working at bulge-bracket firms allowed us to participate in large, sophisticated transactions around the world. However, it is also true that eventually, jobs at large investment banks tend to become more and more administrative, bureaucratic and focused on league tables. That leaves less time to focus on the origination and successful execution of transactions. Isauro and I recognized that there was a latent need in Mexico for independent, unconflicted and sophisticated strategic advice. We strongly believe that we offer our clients value-added services based on trust, the close involvement of highly experienced bankers and deep knowledge of the Mexican market, combined with global reach.
I would say the key is earning our clients’ trust (which comes from having their best interests as our top priority), providing high-quality advice, working hard for them, and being open and transparent throughout the process, always keeping in mind that the transactions we work on range from highly strategic to transformational. I think the key differentiators at ADS are our people and the culture throughout the firm, which is completely focused on deeply understanding each unique situation and delivering the best outcomes for our clients.
I would highlight the following three factors: the quality of our strategic partnership, the expertise of our team and our strong commitment to excellence. First, our strategic alliance with Moelis provides us with industry-specific insights and access to a global network. Second, our rigorous recruitment and training programs ensure that our team consistently operates at the highest standards. All of our bankers undergo training in New York through the same programs used by leading Wall Street firms. Finally, our team’s proven track record in executing highly complex transactions, along with senior attention during all phases of a transaction, has earned us a reputation for reliability and delivering exceptional results. Over the next year, we plan to deepen our collaboration with Moelis, enabling more Mexican companies to benefit directly from its sector and product expertise.
We are very fortunate to have Moelis & Company as our international partner. They have extraordinary capabilities and are very easy to work with. For example, we regularly see different senior colleagues getting involved in parts of a transaction that require their specific expertise for the benefit of our clients. Having a team of several senior bankers involved in a single transaction is not very common in our industry, but we find that “delivering the firm” with all its capabilities makes a significant difference. Additionally, we believe the combination of specialized professionals, global reach and local execution capabilities with a robust and experienced senior team is beneficial for ADS’s clients.
The great majority of transactions we are involved in are cross-border, which brings certain challenges, such as added complexity, communication barriers, different accounting standards and sometimes even cultural differences. To address these challenges, it is important to have an experienced team that is prepared to respond quickly and efficiently and is deeply involved in all aspects of a transaction. In many cases, when a transaction involves specialized industry or product knowledge, such as capital markets or the need to reach a particular potential investor in a given geography or sector, Moelis allows us to fill that need.
Our biggest accomplishment is that for over 21 years, ADS has had a great partnership where all the partners are team players and share a common philosophy of integrity, high-quality performance and hard work.
A very common conflict in this field is when an advisor recommends that a company do a deal, even if it’s not clear that it’s in the best interest of the client. We pride ourselves on having advised our clients many times not to complete a transaction if it does not make sense or is not the right time. We like to say that ADS has as many, if not more, tombstones of transactions that did not close because we recommended not doing them than those we have closed successfully. Also, we have been very clear from the beginning about taking the long view and putting our clients’ interests first. This has led to building trust and continued recommendations from existing and former clients.
It is true that the current geopolitical environment introduces volatility, but we are cautiously optimistic for 2025. The reality is that Mexico is well positioned not only geographically but also through its strong manufacturing base and integration with the US to continue being an important ally and have a mutually beneficial relationship. While we see some companies delaying certain strategic decisions until they have more clarity, we also see strong continued interest in Mexico from sophisticated investors who recognize the latent opportunities in Mexico not only as an important market on its own but also as a springboard to serve the US market in many cases.
We are currently seeing an increase in M&A activity but remain cautious, given the geopolitical landscape. One of the key advantages of our business model is that it is countercyclical, allowing us to rapidly adapt to changing market conditions. When the economy grows, we focus primarily on M&A assignments, whereas during economic shocks or periods of slow growth, we shift our efforts toward debt restructurings. For example, when COVID hit a few years ago, all of our ongoing M&A deals were put on standby, but we immediately pivoted to restructurings in industries such as real estate, hospitality and airlines.
