Increased interest from sovereign wealth funds and large institutional investors in a wider array of investment opportunities in Asia is shaking up how investment banks deploy their people.
Having identified this trend, Deutsche Bank has created a new role for Ashok Pandit as head of sovereign wealth funds and institutional client coverage, effective February 1, according to a memo confirmed Friday by a Deutsche Bank spokeswoman.
He will advise Asian-headquartered sovereign wealth funds on global investment opportunities across equity and debt capital markets as well as help other big global players to invest in Asia.
For the last few years SWFs such as Temesek, GIC, CIC, Khazanah Nasional and Norges Bank, very large pension funds like Ontario Teachers, Malaysia’s EPF, and big institutions such as BlackRock have each played an increasingly important role in capital market transactions in Asia.
In this, they have often taken the traditional route of participating as a cornerstone or anchor investor in Asian IPOs. An example of this is Norges Bank's decision to back the IPOs of China Cinda Asset Management and China Huishan Dairy Holdings late last year.
But they are increasingly also participating in private placements, where companies sell shares to a small group of around ten investors, and making sizeable pre-IPO investments, such as Temesek’s purchase of Alibaba stock in 2011 and BlackRock’s investment in Formula One in 2012.
In addition, these bulge-bracket institutions have bought mezzanine debt in leveraged buyouts and taken part in private convertible bond placements.
“Private placements out of China are becoming the norm,” said one banker who declined to be named due to the sensitivity of such share sales.
China Oilfield Services pocketed HK$5.88 billion ($759 million) earlier this month from a private placement of new H-shares. The deal was placed with the maximum 10 investors allowed for such private placements.
As an example of how really big institutional investors are ramping up their presence in this area, BlackRock recently appointed former Morgan Stanley banker Scott Greenberg to head its global capital markets team in the Asia Pacific region.
BlackRock said in a statement that he will be responsible for developing equity and debt investment opportunities including pre-IPO, equity cornerstones, convertible debt and other equity-linked investments. His team also works on event-driven bridge financings or companies’ other financing requirements associated with special situations.
Bankers see an opportunity in helping to match these investors to suitable companies – at the same time as helping their Asian corporate clients raise capital.
Issuers are finding sales of shares to small groups of investors simpler and more private than widespread offerings, say bankers.
He will also be helped by Deutsche’s push in Asia to develop its equity structuring expertise. Keyvan Zolfaghari moved from London last year to run Deutsche's strategic equity transactions group.
Having led Deutsche's Asia ECM team for the past six years – firstly on a joint basis and then on a sole basis – 48-year-old Pandit is known to have been interested in moving into a more client-facing role for some time. In his new role Pandit will report to the co-heads of corporate finance in Asia, Doug Morton and Venky Vishwanathan. He will continue to be based in Hong Kong.
Prior to joining Deutsche Bank in 2005, Pandit led the equity capital markets team at ABN Amro Rothschild in Hong Kong. He has a MBA degree from the Indian Institute of Management, Bangalore, India.
New head of ECM Asia
As Pandit moves into his new position, Neil Kell will move from Europe to be head of equity capital markets in Asia excluding Japan and Australasia.
Kell joined Deutsche in 2010 from Bank of America Merrill Lynch to head its ECM financial institutions group in EMEA, which won roles on high-profile deals such as Barclays' last rights issue and the recapitalisation of Bank of Ireland.
Kell will report to Bhupinder Singh, co-head of corporate banking & securities in Asia Pacific and Mark Hantho, global head of ECM at Deutsche.
