Chinese investment banks, eager to expand their business interests offshore, are emerging as one of the biggest recruiters of senior talent from Western banks.
HSBC, having announced a hiring and pay freeze in late January, has already seen two of its senior investment bankers leave to join Chinese investment banks.
May Liang, a managing director of global banking at HSBC China, moved to China Merchants Securities (HK) as head of investment banking last month, replacing Daniel Ng, who left the Chinese firm in October last year.
Bing Li, a managing director of HSBC’s China corporate finance team, also left in February after six years at the British bank to join Zhongtai International, the offshore subsidiary of Shandong-based Zhongtai Securities, where he took up the position of head of investment banking.
That comes after Zhongtai International hired Eric Mak in Hong Kong as head of equity capital markets. Mak was previosuly at Nomura where he was an origination banker in the Japanese bank's Asia-Pacific equity capital markets team.
The trend, while nascent, is growing, headhunters in Hong Kong said.
Chinese firms are actively hunting for bankers from foreign investment banks because they need people with international experience to help them deal with regulatory and compliance issues in offshore markets, one executive at an investment banking recruitment agency told FinanceAsia, on condition of anonymity.
Another push factor is China Inc.'s growing appetite for mergers and acquisitions in overseas markets.
Chinese outbound M&A volumes reached a record high of $111.9 billion last year, according to Dealogic, and are set to continue growing given the mega deals already announced this year, including ChemChina's $43 billion acquisition of Syngenta and Dalian Wanda’s $3.5 billion bid for Legendary Entertainment.
“Chinese investment banks are targeting bankers that possess the knowledge and network to identify overseas acquisition targets for their clients,” the recruitment executive said.
Apart from the M&A advisory business, foreign bankers can also help Chinese banks expand their client base for initial public offerings and share placements.
“Chinese investment banks have strong networks with domestic investors but they probably do not have connections with international asset managers and institutions,” a second recruitment executive said. “So [the] hiring of foreign bankers could help them expand their client network overseas.”
China Renaissance, one of the fastest-growing Chinese boutique investment banks, has been one of the biggest recruiters of foreign bankers in recent years. It poached Jeremy Choy from JP Morgan as well as Jason Lam and Kevin Xie from Credit Suisse.
This group of foreign bankers have propelled China Renaissance into one of the new forces in the M&A advisory space. In recent years the bank advised on several billion-dollar transactions including the $9.1 billion privatisation of Qihoo 360, the merger between Meituan and Dianping, as well as the Didi Kuaidi merger.
