Invariably that pile is higher than we care to admit. Then the conversation turns to articles and editorial directions of magazines û from Vanity Fair to the Economist û before finally getting down to discussions about banking.
That Renaissance man style of banking û being able to chat about the world, not just a sliver of it û is RentonÆs approach to investment banking. When he talks about his job, he invariably speaks of the necessity of understanding various cultures, which of course sounds like a clichT but is a truism when you are managing a business that spans so many different cultures in Asia.
Renton understands that the top rank of bankers can no longer just know the latest late-night haunts and chic restaurants of London and New York. He needs to be comfortable jumping on a last-minute flight to Melbourne, for example, and be able to make an impromptu speech to staff and clients about the banking business in Bangladesh û which he had to do recently when Citi became the first foreign bank to obtain investment-banking licence in the country.
And he knows that friendships with his brothers-in-arms (his counterparts at other banks) are important: Asian investment banking is still a very close-knit community, everyone seems to know what everyone else is doing. Indeed, in reporting this story, several of his contemporaries chuckled when they heard this column would be written about him, joking that heÆs only just arrivedû which was undeniably meant in a mate-like manner, but is still a tad harsh, given Renton started working in Asia in January 2005. Actually, such ribbing is the sign of how much heÆs liked, indeed compliments like ôstand up manö and ôgood guyö were the norm.
Renton has been with Citi for over 20 years and spent the last 10 years, most recently as head of the firmÆs energy group, in North America û useful background for working in a region where the thirst for energy assets, particularly from China and India, continues unabated.
As to that ônew-in-Asiaö issue, Renton points out that he travelled extensively to the region well before he was posted out here û indeed he used to vacation in Asia regularly with his family before his current job.
Because heÆs genuinely interested in the region, the Brit who was Oxford- and Wharton-educated fits in. It also helps that heÆs clearly excited about the growth of Asian corporate powerhouses û and the deals that they are entering on a global basis. He talks enthusiastically about the rise of the Asian global champion, underlined by recent transactions such as Acer buying Gateway, Doosan buying three units of Infracore and Wipro buying Infrocrossing û where Citi advised the Asian side on all three.
In a recent interview, right after the 3Com transaction was announced, Renton pointed to that deal as an example of the type of M&A activity weÆre likely to see more of in the future. As most readers will be aware, private equity firm Bain Capital Partners and ChinaÆs Huawei Technologies have offered to pay $2.2 billion for 3Com, which is a network equipment maker. Citi and UBS are advising Bain and Huawei on the deal.
ôLook at this deal. ItÆs a financial sponsor, with the support of a Chinese strategic, buying a US-oriented business with growth overseas, backed by liquidity from the Asian markets. Now what is that indicative of? I think it is indicative of this being the time of the Asian corporate,ö says Renton. ôWith the US financial sponsor disappearing, the opportunity for Asian corporates, particularly Chinese and Indian corporates, to be able to accomplish their aims for more acquisitions has never been higher.ö
(While this particular deal has since been called off, Renton's comments on the trend it exemplified remain valid).
When Renton gets on a roll like this û talking about Citi deals and their implications for the overall market û he sounds like a mix between a cross-examining barrister and a university professor. He starts waving his arms and looks excited and animated, yet his voice carries on in a deliberate manner (proof of this is I didnÆt have to keep hitting the rewind button on my recorder to check his quotations).
His support for the notion that weÆll see more 3Com deals (setting aside any problems of hysteria from US congressmen) is straightforward: Asia is flush with cash.
ôIn almost every market we see very significant amounts of liquidity. This liquidity of regional pools of capital is driving record amounts of capital market issuance in the region. As a result, you donÆt have to list overseas anymore û liquidity is here in Asia,ö says Renton.
Renton takes the view that Asia has shaken off any subprime concerns that are impacting other parts of the world. Instead he focuses on the price-to-growth ratio for Asian corporations and their solid balance sheets, which this time around (as compared to the Asian financial crisis) are supported by impressive underlying fundamentals from regional economies. He calls China ôone of the strongest economic powerhouses on the planetö.
So no worries, whatsoever? As usual, with Renton, the answer is full of pros and cons as presented in some of the latest books on the market û from GreenspanÆs Age of Turbulence to the series of hardbacks out on ôChindiaö, the term used to describe the rising economic might of China and India. He rattles off the individual concerns in each country that people in Asia understand and accept û ranging from political turbulence in Southeast Asia, to ChinaÆs efforts to take the heat out of its economy. But he comes back to the same theme: the fundamentals are good.
And that brings the conversation back to overseas mergers and acquisitions.ôOf course there will be some regional plays, but from what weÆre gathering, I think youÆre just going to see more and more Chinese and Indian companies looking to acquire assets in the West, which will then serve as traditional growth engines, either through their core businesses back in their home countries or as opportunities for them to expand overseas.ö
Renton also underlines the increasing importance of financial sponsors in Asia as well as the emergence of Asian sovereign wealth funds. But what journalist can resist a final question û amid all the bullish talk û of pitfalls on the horizon : ôWhat worries you?ö
ôWorry about the unknown,ö laughs Renton.
This profile first appeared in FinanceAsia magazine.
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