ôThis build-up of senior banking talent is an investment to take our franchise to the next level,ö says Lee Zhang, head of global banking, Asia-Pacific at Deutsche.
As we reported on Friday, April 27, Angus Barker has left UBS. It is now confirmed that he is indeed joining Deutsche Bank. Barker will head financial sponsors for the Asia-Pacific region, adding responsibility for Australia and New Zealand to the geography he earlier covered at UBS.
Zhang comments that the sponsors business in the region ôis a huge and growing market in which we want to play a dominant roleö. This is a newly created position and Barker will build up his team so further hiring is anticipated.
Deutsche Bank spokesperson, Michael West, also confirmed on Friday that Gordon Paterson is moving from his earlier responsibility as head of regional M&A for Citi to head the product for Deutsche. Paterson takes over from Doug Morton at Deutsche. Morton will now head another high-growth area in the region, real estate investment banking.
Paterson joined Citi in 2002 as head of M&A, from Credit Suisse where he headed investment banking for Southeast Asia. Prior to Credit Suisse, Paterson headed corporate finance for Donaldson, Lufkin and Jenrette in the region. Paterson is, like Barker, an old Asia hand, here since 1994. Citi had no comment on the move.
West added that Deutsche is also adding to its country-specific coverage teams. William Choi has joined as head of Korea investment banking. He moves from JPMorgan where he was covering companies, financial institutions and government agencies since 2004. Choi has also worked at Goldman Sachs and Salomon Smith Barney KEB Securities.
On the industry coverage side, Jacob Bahnsen, who was with Macquarie Bank in Shanghai, will join Deutsche as head of metals and mining. Further reinforcement of industry coverage is being rolled out.
Deutsche has also added headcount to its equities franchise. Kwan Sun has already started as a managing director in Hong Kong from Morgan Stanley where he was part of the corporate derivatives team. Sun has earlier worked in similar roles at Barclays, Merrill Lynch and JPMorgan. Steven Yoo, who was previously at JPMorgan in Hong Kong, joins as a director in the equity capital markets team. Lawrence Lau has also joined the equities team, from Credit Suisse.
It is noteworthy that Deutsche is recovering from its own post-bonus departures since the beginning of the year. Citi, Merrill Lynch and Morgan Stanley have all poached from Deutsche in the last few weeks. But this round of hiring is not intended to fill in gaps - positions like Barker's are part of a larger gameplan to strengthen the franchise and regional coverage.
Sources close to the development comment that Deutsche Bank's new hires reflect its strategy to try to replicate its standing in Europe and the US in the Asia-Pacific region - in the geographies where Deutsche has established itself, it is known as a bank which specialises, indeed thrives, on complex structuring and innovative transactions. The Asia-Pacific is the region many banks see as paramount to future growth. Deutsche is bringing on board established bankers and giving them a blank canvas and all the materials they need to hopefully create masterpieces and reinforce its position in a region where it has hitherto not made a mark.
DeutscheÆs motivation to strengthen its ranks is crystal clear. But one banker asks: "What is the motivation for the people Deutsche is bringing on board to move to do, in some cases, the same job at a different house that, in league table terms, is smaller?"
The thinking underlying the decision to hitch their fate to Deutsche Bank seems to reflect what is fast becoming a reality in the investment banking arena across the globe. The banks that will emerge victorious will be the ones that are willing to put their balance sheets to work for their clients. Both corporate clients and financial sponsors no longer award advisory mandates simply on the basis of relationships or execution capabilities. Increasingly, clients see the advisory fees they pay as ôthe icing on the cakeö. What is critical is the financing component for multi-million and billion dollar deals.
Take the financial sponsors space as an example.
DeutscheÆs willingness to leverage its balance sheet to structure and provide solutions for clients has helped it to develop strong relationships with a number of big-ticket sponsors in Europe and the US. The firm is known for its willingness to take risks for its clients, a huge draw for a banker like Barker who must be hoping to effectively leverage this to win - and close - deals. Deutsche is betting that its global relationships and balance sheet coupled with BarkerÆs strengths - his own relationships, familiarity with Asia-Pacific markets and execution skills - will be a winning combination.
Deutsche is investing heavily in its franchise in the region, both in terms of financial and human capital, in its aim to move from the somewhat "mid-market player" to one of the leaders of the pack.
It is too early to know whether Deutsche's strategy will work. But with the line-up it is assembling, one thing is clear - already cut-throat competition for mandates in the region is set to get even more intense. And predicting 2007 league table standings just got that much harder.
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