Henry Cai, Deutsche Bank’s executive chairman of corporate finance for Asia-Pacific, is in discussions about leaving investment banking, industry sources said on Thursday.
Cai is approaching retirement age and is expected to leave the German bank around February and take up several board room seats instead, one of the sources said. He may join a large Shanghai-based company, said another source.
Robert Rankin, Deutsche Bank's global co-head of corporate banking and securities, and head of corporate finance - and Cai's former boss at UBS - is also leaving the bank in January to become chief executive of James Packer's private investment vehicle Consolidated Press Holdings.
Cai, 60 years old next month, has been nicknamed the grandfather of China's capital markets for his close involvement in many of the first wave of Chinese enterprises to be listed on the Hong Kong H-share market and US stock exchanges, including the 1993 listings of Shanghai Petrochemical and Tsingtao Beer. Cai has also worked extensively with the private entrepreneurs of today's China.
He also played an important role in drafting and amending many legal and regulatory standards, including the PRC Enterprise Law and PRC Securities Law.
Under Cai's watch Deutsche Bank was a joint global coordinator and joint bookrunner on the world's largest ever listing, Alibaba’s $25 billion IPO in New York. The role was the fruit of a long-standing relationship dating back to Alibaba.com $1.7 billion IPO in 2007. Deutsche Bank is also working currently on Alibaba’s latest $8 billion bond.
The German bank has also played a part in some of the other landmark IPOs globally, such as those of GM, ABC, ICBC and AIA. This year it worked on M&A deals involving Chinese companies such as the 29.99% stake sale in Sinopec Marketing for $17.5 billion and also helped finance Hony Capital’s $1.5 billion acquisition of Pizza Express.
It has not all been plain sailing. The bank stepped away from the $2 billion Hong Kong IPO of China General Nuclear amid US regulators’ investigation into whether the bank hired Chinese princelings to win deal mandates.
Deutsche Bank has seen other senior managers depart this year. In August, Jing Qian left for Morgan Stanley as a managing director and head of China origination. Qian was previously the co-head of China investment banking at Deutsche Bank. The other co-head, Qin Jing, left the bank earlier this year.
Although Cai's departure would be a heavy blow to its investment bank in Asia, Deutsche Bank has also been hiring senior dealmakers recently. The bank said in June it had hired Larry Chi from Morgan Stanley to be head of corporate banking and securities in China, and he has been on board since August.
“Chi also has strong connections with Chinese SOEs and he has already partly taken over responsibility for markets and investment banking business in China,” another source said.
A Deutsche Bank spokesperson declined to comment for this story.
Veteran dealmaker
Cai (pictured left) joined Deutsche Bank from UBS in 2010. Cai, who was chairman of Asia investment banking and head of China investment banking at UBS, let it be known through sources at the time that he was looking to take a break from the industry. Colleagues initially said they didn't think he would join a rival but perhaps take a job with a state-owned enterprise (SOE) or start a private equity fund.
However, just days later market talk suggested he would join Rankin at Deutsche Bank. Rankin left UBS, where he was head of investment banking for Asia-Pacific, in March 2009.
Cai joined UBS from BNP Paribas initially as chairman of investment banking for China. He was promoted to chairman for Asia investment banking in March last year when Rankin left. He joined BNP, then known as Peregrine Investment Bank, in 1997 and rose through the ranks to become co-head of investment banking for Asia.
From 1984 to 1996, Cai worked with the Shanghai municipal government and with Shanghai Petrochemical. Between 1992 and 1996 he was also a member of the state council IPO team in Shanghai. He helped many Chinese companies list in Hong Kong, including Country Garden, Fosun International and PetroChina, during his stint with UBS.
