Global investment banks have been moving their top bankers to Asia. Key moves include J.P. Morgan’s Jeff Urwin, as global head of investment banking in Hong Kong and Mark Schwartz, Goldman Sachs’ first regional chairman on the mainland.
Jason Tan, director of financial services and banking, PSD Group, says: “Deals are scarce in US and Europe, while Asia and emerging markets are buoyant. Bankers are simply going where the money is. Asian sovereign wealth funds have a lot of money; this is another reason for the migration.”
The appointment of Schwartz in Beijing demonstrates the firm’s commitment to China. The veteran’s return indicates the scarcity of top bankers who have the required skills and experience for such senior mainland positions.
Sarah Xiao, head of Financial Service, North China, Talent2 Beijing, says: “First of all, Asian experience is a must, if someone has Greater China experience that would be a big plus.” She adds such candidates should have eight to 10 years of experience within the firm, familiarity with Chinese culture and extensive connections with enterprise, local government and regulators. Schwartz, once the chairman of Goldman Sachs Asia and president of Goldman Sachs Japan, certainly seems to fit the criteria.
What differentiates placement in Hong Kong and Beijing, might be the language factor. Xiao says: “Foreign banks should appoint local candidates as senior managers if they want to succeed in the China market, especially in investment banking. Most JV CEOs in China are Chinese, like UBS, J.P. Morgan and Zhong De Securities.”
Local vs Global
To do business in China, foreign investment banks need to strike a balance between localisation and maintaining their competitive edge. While local firms thrive on using connections to win deals, foreign i-banks need to emphasise their global knowledge and expertise in premium services.
Tan says: “Asia is quite distant from the euro crisis with China still in driving seat. There is very little reason why the top bankers are not in Asia. Pockets of growth lie in private wealth management, commodities sales and trading, as well as RMB-based cross border for corporate bankers.”