Matthew Ginsburg, Morgan Stanley's head of investment banking for Asia-Pacific, has resigned from the firm that he joined in 1995 in a move industry insiders say is surprising because he gave the impression of being a Morgan Stanley banker through and through.
While not confirmed yet, sources say Ginsburg will take on the head of Asia-Pacific investment banking job at Barclays Capital which has been vacant since Darcy Lai left the UK firm in early March. While identical in terms of title, the Barclays job presents a very different challenge since it involves building up an equity capital markets and M&A business from a low base.
Morgan Stanley confirmed Ginsburg's departure on Friday and said he is being replaced by Gokul Laroia and Kate Richdale, who will share the responsibility for the investment banking business in the region as co-heads. Laroia has been with Morgan Stanley for 14 years and was previous head of global capital markets for Asia, which includes both debt and equity origination. Richdale has been with the firm for almost 10 years and was most recently CEO for Southeast Asia -- a position she has held since November 2008. Before that she ran the general industries group in Hong Kong. Laroia and Richdale started their new jobs on Friday last week.
Ginsburg's resignation is the latest in a string of departures and reshuffles among the investment banking heads in the region this year. The moves suggest Asia's investment banking industry is in for an interesting time in the next few years as new players build up their businesses and try to capture market share from the major houses that continue to feel the effects of the financial crisis.
The departures may have been partly driven by the increased uncertainty about the future at some of these major banks as losses and write-downs mounted, and government bailouts and stake sales to shore-up leaking balance sheets became the norm. But the lack of bonuses in the past year and suggestions of restricted payouts in years to come also likely played a part. On the one hand, it has meant that top bankers have much less to lose when they make a move in or out of the industry. On the other hand, the best chance for a high-paid banker to keep compensation at roughly the same level as in years past is to accept an offer from a rival bank that comes with certain guarantees.
It is not clear what the driver was behind Ginsburg's decision, although both of the above are likely to have had some influence.
People familiar with the search process for a new investment banking head at Barclays say there are indications that the new hire may also be a prime candidate to eventually succeed Robert Morrice as CEO for Asia, a position that he has held since 2001. Morrice is also chairman for the region. Such a possibility would certainly make the move to a firm that it still very much in a build-up phase when it comes to being a broad-based investment banking franchise a lot more attractive for a senior investment banker like Ginsburg.
Ginsburg is a good catch for Barclays as the bank puts renewed focus on beefing up its equity and M&A business globally following its acquisition of Lehman Brothers' US business in the fourth quarter last year after the US investment bank filed for bankruptcy. In May last year the bank also hired a team of investment bankers from ABN AMRO to kick-start its corporate finance and M&A business.
Ginsburg is right for the job, bankers say, because he has experience both within M&A and equities. He is also viewed as a good manager, although some say he will need to take more risks - and perhaps go after more high-profile hires - than at a well-established firm like Morgan Stanley as he tries to up Barclays profile outside its long-time fixed-income focus.
He first joined Morgan Stanley to run the firm's then nascent M&A department at a time when deregulation was a theme with many Asian governments and newly licensed domestic companies were looking for multinational companies to come in as strategic investors to help fund and manage build-outs.
After a couple of years as chief operating officer of Morgan Stanley's investment banking business, Ginsburg was named head of FIG, and became heavily involved with recapitalisations and M&A in the financial sector in Korea as well as bank restructurings in China. Among the many high-profile deals he worked on during this time are: the sale of Korea First Bank to Standard Chartered; Shinhan's acquisition of Chohung Bank; the sales of Korea's two premier asset managers, KITC and DITC; the Hong Kong IPOs for two mainland insurers (PICC and Ping An); and the first ever listing of a Chinese bank outside the mainland -- China Construction Bank's $9 billion IPO in Hong Kong in 2005.
He took over as head of investment banking in 2006 when his mentor, Mike Berchtold, announced his retirement from the industry.
Ginsburg, who is born and raised in Boston and a graduate of Harvard, is also an old Asia hand, having first arrived in the region in the late 1980s. His first posting was in Japan, but he has been based in Hong Kong since 1992. Before joining Morgan Stanley in 1995 he worked with First Boston as part of its three-person M&A team in Hong Kong. And with a wife who is from a long established Hong Kong family with maternal roots in the Philippines and three children who attend bilingual schools, it is perhaps no wonder that he regards Hong Kong as home and says that he has never felt like an expat here.
Among other high-profile moves in the region this year, UBS's head of investment banking for Asia-Pacific, Rob Rankin, left in early March and a couple of months later it was confirmed that he would replace Colin Grassie as CEO for Asia-Pacific ex-Japan at Deutsche Bank. At UBS, David Chin, former head of the financial institutions group, and Matthew Hanning, who joined the firm as recently as 2006 as head of M&A and corporate finance, took over as co-heads of investment banking.
At Credit Suisse, Paul Raphael, who had been head of the investment banking department (IBD) for Asia-Pacific for close to two years, resigned in mid-March with sources saying he is looking to return to Europe. He was replaced by Vikram Malhotra and Helman Sitohang who were appointed co-heads of IBD. Malhotra was previously head of the global market solutions group for Asia-Pacific, which includes all of the firm's equity and debt financing businesses -- a job that he retains but now shares with Sitohang. Meanwhile, Sitohang has also kept his previous job as country CEO for Indonesia.
Damien Chunilal, who was chief operating officer for the Pacific Rim and head of Pacific Rim investment banking at Merrill Lynch, left the firm in November last year in connection with a reshuffle linked to the merger with Bank of America. After an initial appointment that lasted only a couple of months, the combined firm's corporate and investment banking business in the region is now jointly led by Jayanti Bajpai and Jiro Seguchi.
At Citi, the job of heading up global investment banking for Asia-Pacific was eliminated as part of a restructuring in February aimed at consolidating the corporate bank with the investment bank. Mark Renton, who was at the time co-head of global investment banking for Asia-Pacific, became global co-head of the public sector group, and Farhan Faruqui was appointed Asia-Pacific head of global banking -- a division that integrates Citi's corporate and investment bank.
Meanwhile, former J.P. Morgan investment banking head Sean Wallace is now group head of corporate finance at Standard Chartered. The UK bank, which focuses on emerging markets in Asia, the Middle East and Africa, has been hiring aggressively over the past 12 months as it tries to take advantage of its relatively strong balance sheet - to attract talent and to win business.
No doubt competition will be heating up in the region as all these new heads try to prove their worth and put their firms ahead in the post-financial crisis business environment.
