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Region ready to lead rebound

Published on Friday, 16 Jul 2010
Increased liquidity is supporting more transactions.
Photo: Bloomberg

As economic growth and confidence return to the markets, Asian investment and private banking sectors can expect to see a period of robust activity.

Farhan Faruqui, Citibank's head of global banking for Asia-Pacific, says there is increased confidence and liquidity to support transactions that need financing.

"We sense from conversations with clients that in the coming months we will see renewed outbound mergers and acquisitions [M&As] from Asia. Asia's growing breed of global champions, that blazed a trail a few years back, showed those with similar aspirations what was possible, so we expect to see more headline outbound mergers and acquisitions from China and India," Faruqui says.

Almost 18 months after Citi merged its corporate and investment bank units into one entity, Faruqui says the structure has taken the bank even closer to its clients.

"The global banking structure gives us a single, unified coverage force that can deliver to our clients the best thinking, products and services in the industry," he says.

"We have a franchise that spans the region and a product set. That means we can have a conversation with a client across the full capital markets and banking platform. Our global platform in more than 100 countries also means we have an unparalleled distribution network. If a client is looking for M&A ideas, we can literally look all over the world for them with our relationships.

"Citi has built up an outstanding team of professionals that has come through one of the most difficult times for this industry. My focus is on developing this deep bench of talent from within, but we will always look to complement the team and hire new talent.

"We place great emphasis on the talent of the future and spend a lot of time identifying the best talent at leading universities and business schools across the world. Several of these colleagues from previous years are now established leaders for us in Asia."

Prerequisites for joining Citi include a balanced academic background, motivation and the intellectual desire to learn more about the industry. Citi has been carrying out campus presentations at key schools and universities.

Joseph Pacini, head of alternative investments at JP Morgan Private Bank in Asia, says one of the most valuable post-crisis lessons is manager selection and due diligence.

"One must dig deep into understanding not only the investment aspects of a manager, but also their operational framework, their counterparty arrangements, leverage ability and prime brokerage relationships. A deep focus on these aspects by dedicated due-diligence professionals is crucial in prudent manager selection," he says.

Eunice Ng, director at Avanza Consulting Asia-Pacific, has noticed other trends emerging.

"Mainland banks with an international presence and joint venture arrangements, including fund offerings, are becoming a lot more active. They are not just active in the investment banking sector, they are also beefing up their private equity business as an integral part of their growth strategies," she says.

She points out that suitable candidates need to be private equity specialists, preferably with experience in working with mainland-focused firms. Recent opportunities have been mainly focused on the energy and mineral, new media and state-owned enterprise sectors.

Candidates generally need to have a minimum of eight to 10 years of proven private equity experience or a strong background in a related industry.

Ng also notes a growing trend for private equity companies to help mainland clients prepare for initial public offerings in Hong Kong and overseas. This has created openings for chief operating officers, chief finance officers, heads of finance, company secretaries and investor relationship roles.


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