ABN AMRO – Mike Hammond
Then: Head of Asia equity capital markets
Now: Co-founder and partner, City Capital Corporation, London
Mike Hammond’s stint at ABN AMRO was just one two-year marker in a long career that stretches back to 1982. After leaving Asia in 2001, he spent a short time in Bermuda before setting up his own boutique investment bank, City Capital Corporation (3C), later the same year with two former colleagues from his days at Robert Fleming.
From its offices in London, Switzerland and Bermuda, the 60-strong group targets mid-cap companies with a market value of up to €1 billion ($1.19 billion) and is primarily focused on Russia.
Hammond says he only has one or two regrets about leaving the big investment banks behind. “We have less support to back us up and less capital,” he commented. “But that’s far outweighed by the freedom of being able to make our own decisions, the almost complete lack of politics and of course, keeping the financial rewards for ourselves.”
The deal he remembers most from his time in Asia is Beijing Airports IPO in early 2000. “It was one of the early Chinese privatisations and it was a very difficult deal – a hard slog that involved a huge amount of restructuring,” he said. “Back then Asia was an emerging market. Now I’d consider large parts of it a developed market and it’s just phenomenal how much cash is devoted to the region.
BNP PARIBAS PEREGRINE – Darius Yuen
Then: Co-head of Asia equity capital markets, Hong Kong
Now: President Sow (Asia) Foundation, Hong Kong
In 2008, many people thought Darius Yuen was one of the unluckiest bankers in Asia. After 14 years with the French bank, he quit to become head of Asia equity capital markets at Bear Stearns on the very day the latter’s stock took a fatal plummet south. It should have been a wonderful opportunity to take a key role in the new joint venture Bear Stearns had forged with Citic Securities.
And Yuen says it did turn out to be a great opportunity after all, just not the one he originally envisaged. “I ended up being the very lucky recipient of a large guaranteed payment and that enabled me to think about what I really wanted to do with my life,” he said.
And that was Sow Asia, which he seeded with the payout from Bear Stearns. Now employing five people, the company is a venture philanthropist, which uses business principles to fund good causes ranging from teaching computer skills to children in Cambodia to investments in companies like Giga – an online platform for sharing information about green building materials.
Reflecting on his time as an investment banker, Yuen says what really strikes him is how fast the China IPO market has grown. “In 2000, $1 billion was a big deal, now it’s run of the mill. BNP did many of the pioneering mid-market transactions for China’s private sector companies. We did Parkson, BYD and Great Wall. And look where they are now.”
CHASE JF – Michiel Steenman
Then: Head of Asia equity capital markets, Hong Kong
Now: Founder and co-CIO Steenman Asset Management, Geneva
With $200 million under management, Michiel Steenman has established a thriving asset management business in the eight years since he left Asia and four years after he struck out on his own. Now based in Geneva, he successfully launched his first fund of funds on May 1 with much higher-than-expected day one assets of $50 million.
“When I first started out on my own, I stuck to a limited group of investors constructing portfolios with different hedge funds,” he said. “I’ve now got to the stage where I want to reach a slightly broader audience. It’ll be an open fund with a big focus on the US and it will invest in both equity and credit funds with a long/short strategy.”
Steeman adds that the experience of the past few years has also taught him to focus on very liquid strategies. “It’s one thing I intend to be very disciplined about,” he said. “So many funds got caught by the 2008 credit crunch and I want to make sure we’re protected in the event of another major crash.”
The flying Dutchman says he well remembers living through the Asian financial crisis. “I first came to Asia in December 1994 and joined Jardine Fleming after a couple of years,” he said. “It was never boring even after the big bust of 1997. I really miss Asia’s pro-business environment. Europe is very different. I sometimes think people here aren’t interested in business at all.
His favourite deal: The UMC $250 million convertible bond in 1997. "It was a major coup for my team as UMC was a captive Morgan Stanley client," said Steenman. "Initially we struggled to get the deal away but ultimately it performed very well, which made the issuer and investors very happy. I personally managed to develop a good relationship with the chairman of UMC and kept in touch with him even after I left Asia."
Then: Head of Asia equity capital markets, Hong Kong
Now: Head of Asia investment banking, CLSA, Hong Kong
“Please don’t make me look like some old dinosaur,” begged Richard Taylor, the longest serving banker at the same firm on this list. Resident in Asia since 1993 and at CLSA since 1995, Taylor says he still gets an enormous buzz from doing deals and has no intention of quitting work, or Hong Kong, anytime soon.
“The thing I love about Asia is that despite the region’s huge size and diversity, it’s very easy to be at the centre of what’s going on,” he enthused. “It’s much easier to get access to the owners of Asian businesses than it is in the West. And in many cases those owners are start-up entrepreneurs or second-generation families who are coming to the capital markets for the first time. It’s fascinating stuff.”
Like BNP, CLSA’s mid-market focus means the firm has been responsible for the IPO’s of numerous Chinese firms that have gone on to become leading players in their field.
Chief among those, as Taylor himself points out, are the cosmetics firm Sa Sa, which now regularly features in FinanceAsia’s list of Asia's Best Managed Companies, and China’s first quasi home grown luxury brand, Ports International.
“It’s easy to forget just how groundbreaking transactions like these were,” he commented. “Back then, most investors thought China was only capable of making trainers in Dongguan.”
He also cites the privatisation of Malaysia’s Petronas Gas as a standout. “It was run with a Dutch auction process where everyone paid different prices. That was fun,” he recalled.
And showing that he truly is from the Jurassic Age of investment bankers, he also highlights the IPO of New World Infrastructure in 1995. “It was the first Hong Kong IPO ever sold using a DCF valuation. Back then, nobody knew what that was.”
This article continues on page two.
CREDIT SUISSE FIRST BOSTON - Nick Andrews
Then: Head of Asia equity capital markets, Hong Kong
Now: Global head of equities, Renaissance Capital, London
Nick Andrews' self-imposed "exile on main street", lasted just over six months before the globetrotting banker and Rolling Stones fan was back doing what he loves best. In February this year, he took up a new role as global head of equities with Renaissance Capital and will spend part of his time back in Asia building up a secondary market trading and distribution platform.
Prior to that, his body clock had been set to haywire as J.P. Morgan's global head of Asian and emerging market equities, based in Hong Kong, but with his family back in England from 2005. Friends tell of one tale of the time he took a sleeping pill at the start of a plane journey back to Hong Kong, only to wake up eight hours later in the middle of a snowstorm and find himself still on the tarmac at Heathrow, on the plane, by himself. Deciding that it wouldn't be good to fly himself to Hong Kong, he eventually managed to get off the plane and was awarded yet more airmiles to his account as a way of apology by a very embarrassed airline.
The frantic pace of life is one of the things he misses about Hong Kong. "It's one of those places where everything keeps changing -- work wise, socially and economically," he said. "What hasn't changed, though, is the fact that China is still driving it all, only much, much more so now than before."
Andrews is someone of whom his former colleagues only have good things to say and he built very close-knit teams both at J.P. Morgan, where he was head of Asia equity capital markets from 2002 to 2004 (before becoming head of Asia-Pacific equities), and before that at Credit Suisse.
He says one of the biggest changes of the past decade has been the move away from dual listings on the New York Stock Exchange or London in favour of only local listings. "Gone is the need," he concluded. "Asian capital markets have grown in liquidity, governance and investor perception. They've also genuinely grown in terms of revenue contribution for all the global firms and so get far more attention, if not necessarily genuine understanding. This is a global trend for emerging markets, not just Asia."
DEUTSCHE BANK - Philip Southwell
Then: Head of Asia Pacific equity capital markets, Hong Kong
Now: Chief executive officer, EFG-Hermes, Dubai
FinanceAsia caught up with Philip Southwell as he was sitting in a Cairo traffic jam. Deutsche's former head of global banking for Central and Eastern Europe, Turkey, the Middle East and Africa is now running operations across the Gulf Co-operation Council Countries for the Middle Eastern investment bank EFG-Hermes.
He says there are many parallels between Asia as it was when he first arrived in 1997 and the Middle East today. "This region has the same growth potential Asia had a decade ago and I feel the same excitement as I did back then," he remarked. "But it's also very different. Asia's a diverse continent, whereas here you have 400 million people who all speak the same language, watch the same TV channel and have unbelievable hydrocarbon wealth at their disposal. And yet it's a true emerging market with, as yet, about 10 to 15 stocks that investors are interested in."
But Southwell retains his nostalgia for Asia and says that one day he may return. "My wife's Malaysian Chinese and half my family are scattered across Malaysia, China, Australia and Singapore," he noted. His departure from the region was also sudden after his son fell ill during Sars and his whole family left in an air ambulance.
"For me, 2003 was a very intense year both personally and professionally," he said. Indeed, six months after Sars, his last Asian deal was trying to manage the $80 billion order book for China Life's $3 billion IPO -- the world's largest that year.
Yet, the two deals that stand out for him were both block trades. "I loved selling $5.2 billion of Vodafone stock for Hutch in the space of about 40 minutes and I also loved the S$2.2 billion block trade we did for DBS," he recalled. "The stock was under pressure after the bank announced its acquisition of Dao Heng without securing enough capital beforehand and we went in and captured that trade from under the noses of J.P. Morgan and Morgan Stanley."
His worry is that the dollar carry trade is blowing up a new asset bubble in Asia. "I'd be nervous in the near term," he concluded.
GOLDMAN SACHS - Mickey De Lathauwer
Then: Head of Asia equity capital markets, Hong Kong
Now: Co-head of European Equity Sales and Co-head of PISG Europe, Goldman Sachs, London.
He says his four years in Asia ECM have been the hardest of his career to date. But Mickey de Lathauwer also counters that they rank among the best. "My recollections are 99% extremely favourable," he declared. "We had great teamwork and I was part of a group who created a new franchise for Goldman -- one that's become extremely important for the firm."
Indeed, the Belgian-born banker arrived in Asia in 1994 just as Goldman was starting to scale up its Asian equity operations and spent a few years running Southeast Asian sales and trading in Singapore before returning to Hong Kong in 1998.
His favourite deal was for Petrochina -- the $2.9 billion IPO that struggled to gain traction at the height of the tech bubble. "It was the time when no-one was interested in old economy stocks," he observed. "Strange you don't hear that description anymore! We got the deal listed against all the odds and it's gone on to become one of the absolute bell weathers of the Chinese market and global economy."
Indeed, investors were soon to rue their decision. Within six months, the stock was up 50% and by the height of the 2007 bull-run it had seen its value climb from $290 billion to north of $1 trillion -- making it the world's largest stock by market capitalisation.
After six years in Asia, De Lathauwer returned to London to oversee structured products and his work is still derivatives focused, although he says he spends the majority of his time with the PISG group (Pensions and Insurance Solutions).
Asia, he concluded, has matured since he left. "The lessons of the Asian financial crisis have been retained," he said. "Growth seems less levered, less based on speculative capital inflows and more internally generated. It's what makes it more sustainable."
HSBC - Joe Simpson
Then: Head of Asia equity capital markets, Hong Kong
Now: Director, Foxdenton Estate, London; director Casual Films and Consultant DC Gardener Training
The last time FinanceAsia spoke to Joe Simpson it was 2002 and he was heading off into the sunset on his motorbike, set for life as a Macadamia nut farmer in Australia.
"I did that for a few years, but luckily sold out just before the big drought started in 2005," he said.
Today he's back in the UK making fruit gins with an old friend who wanted to create a viable business out of his family's ancient estate. "We distil all sorts of premium gins," he explained. "Our bestseller is 48 proof and called Foxdenton 48% after the name of the estate, which has been under the Radycliffe family since 1367. We've started selling it in Hong Kong and we'll soon be in Japan where we hope it will be particularly popular, given the country's love of all things quintessentially British. "
He also still maintains his ties with Asia through a derivatives training business he set up a few years ago. "I was brought up in Malaysia and the region still feels like home to me," he added. "I wanted to do something which gave me an opportunity to come back regularly and this is it."
Simpson notes a big shift in the way equity deals are now executed. "At the beginning of the decade, hedge funds were seen as short-term investors and it was the bank's policy not to allocate any stock to them," he said. "That's all changed as they've grown and developed a range of different trading strategies."
This is part three of a four-part series; tune in tomorrow for the final part.
