In response, several banks have walked
away from their JVs, the most recent being
JP Morgan, in the hope of launching new
entities when the rules are relaxed.
Others, including UBS and Morgan
Stanley, have instead doubled down,
seeking to raise their shareholdings and
betting that they would be well positioned
TOûBENElTûONCEû#HINAûLIFTSûSOMEûOFûTHESEû
restrictions.
(3"#ûISûANûEXCEPTIONû)TûBECAMEûTHEûlRSTû
foreign bank to take a majority stake in a
Sino-foreign JV last December, when HSBC
Qianhai Securities opened its doors.
This leverages changes introduced to the
Closer Economic Partnership Arrangement
between China, Hong Kong and Macau in
2013, allowing SAR-funded institutions to
hold majority stakes in JVs in Shanghai,
Guangdong province and Shenzhen.
Unlike other banks, which have tied up
with established players, Qianhai Financial
(OLDINGSûISûNOTûAûSECURITIESûlRM ûBUTû
rather the investment arm of the Qianhai
administration bureau.
HSBC has touted this as an advantage,
allowing it to stamp its culture on the new
entity.
Rules introduced in 2015 also allow
foreign banks to set up JVs in the Shanghai
free trade zone with Chinese partners that
AREûNOTûSECURITIESûlRMS
Some banks could consider this option as
an alternative to buying out their partners,
according to market observers.
“There are obvious advantages to having
a passive partner, from a governance and
operational standpoint, but it depends
on the relationship banks have with the
other shareholders and also the price,”
said Benjamin Quinlan, CEO and managing
PARTNERûOFûCONSULTANCYûlRMû1UINLANûû
Associates.
h)FûYOUûCONSIDERûWHEREûSECURITIESûlRMSû
are trading against in terms of valuations,
even an increase from 33% to 51% can be
expensive.”
Respondents to the consultation have
until April 8 to submit their feedback.
THOMAS BLOTTand Razer, but stayed away from other
HIGH
PROlLE ûLOW
MARGINûmOATS
The bank ranked 18th last year for fees
on equity and equity-linked deals in Asia,
excluding Japan and Australia, according
to Thomson Reuters data, generating
US$132.5m in fees for a 2.1% share of
wallet. This was the second year in a row
5"3ûlNISHEDûOUTSIDEûTHEûTOPûûFORû%#-û
fees and is a far cry from previous years
when it jostled for the top spot.
By volumes it ranked sixth in 2017, down
from second in 2015 but up from a lowly
16th in 2016.
In DCM, the bank ranked 12th by volume
for G3 currency issuance in Asia ex-Japan
last year, down two places from the
previous year.
Like other global banks, UBS has been
hit by competition from Chinese banks
and brokerage houses, which have been
undercutting their international rivals on
fees and leveraging their relationships with
cornerstone investors in the mainland to
win leading roles on Hong Kong IPOs.
It is, however, looking to grow its share
of Asian listings in the US, which tend to
come with higher underwriting fees and
smaller bookrunning syndicates. UBS is
currently working on the Nasdaq listing of
IQIYI, the video-streaming unit of Chinese
internet giant Baidu, and the NYSE listing
of Shanghai-based ONESMART INTERNATIONAL
EDUCATION GROUP.
Under the new capital markets structure,
Hannah Malter, chief of staff for APAC, will
return to the equity capital markets group
to help with the Asia-to-US listing push. She
earlier worked in ECM and equity syndicate
in Sydney, Hong Kong and New York.
Peihao Huang, previously head of ECM
solutions for Asia, will become head of cash
ECM for the region.
Huang was appointed co-head of ECM
solutions for Asia in May 2016 and became
sole head in December 2016 after fellow co-
head Damien Brosnan left.
The Asian investment bank of UBS has
been through a series of upheavals in
the last 18 months, with changes at the
top of the business and a string of senior
departures. UBS rehired Chin as IB head
last August as his predecessor, Sam Kendall,
relocated to New York to become global
head of ECM.
Under Kendall’s leadership, UBS has
revamped its ECM business in the US,
laying off at least six people earlier this
year across origination, derivatives and
syndication.
It has also hired Chris Cormier, a long-
time Deutsche Bank and Bank of America
Merrill Lynch ECM banker, to oversee
technology, media and telecommunications
origination in the Americas, as well
as several other bankers across TMT,
HEALTHCAREûANDûlNANCIALûINSTITUTIONS
THOMAS BLOTTPlease send job moves to
[email protected]Natixis buys
majority stake
in China M&A
house
NATIXIS said last Tuesday it had agreed to
buy a majority stake in China-focused
boutique advisory house Vermilion
Partners.
Natixis did not disclose the
acquisition price, saying the deal was
still subject to regulatory approval,
expected to be completed in the next
several months.
The investment banking arm
of France’s BPCE has been known
HISTORICALLYûASûAûSTRUCTUREDûlNANCEû
shop. However, Natixis has sought to
develop its IB coverage in Asia for
several years, even as many
European peers have pulled back
from the region.
Last year, Alain Gallois, CEO of
CORPORATEûANDû)"ûFORû!SIAû0ACIlC ûTOLDû
IFR that Natixis was looking to grow its
mergers and acquisitions capabilities.
6ERMILION ûWHICHûHASûOFlCESûINû"EIJING û
Shanghai, Shenzhen, Hong Kong, London
and Munich, focuses on cross-border M&A
deals between China and the rest of the
world.
It has acted in China for fast-food chain
McDonald’s, drinks producer Diageo and
tobacco company Imperial Brands. It also
advised Yunyi Guokai (Shanghai) Sports
Development in 2016 on the purchase of
English premiership football club West
Bromwich Albion.
Its current management, under
chairman Peter Batey, a well-known
British businessman, will remain after the
acquisition.
The Vermilion acquisition was
one of three deals Natixis announced
last Tuesday. It also agreed to acquire
a 51% stake in Fenchurch Advisory
0ARTNERS ûAû,ONDON
BASEDûlNANCIALû
services boutique, and a minority interest
in French technology advisory company
Clipperton.
Natixis did not say how much it paid
for the investments, but disclosed that
the three deals would cut the group’s core
equity Tier 1 ratio by around 8bp. At the
end of December, it stood at 10.65% under
Basel III rules.
THOMAS BLOTT