UBS Promotes China Hand
UBS AG elevated a successful China deal maker to the top ranks of its Asian investment-banking operations following the resignation of its regional chief there, a sign that the Swiss bank is counting on its strong China business to bolster sagging revenues in the region.
UBS named Henry Cai, 54 years old, as chairman of investment banking Asia, reporting to a UBS global head of investment banking, according to an internal UBS memo. At the same time, David Chin, whose age was unavailable, and Matthew Hanning, 41, were named joint heads of investment banking Asia.
They are succeeding Robert Rankin, the head of investment banking Asia at UBS, who has resigned. The company said he is leaving the firm to spend more time with his family. Mr. Rankin couldn't be reached for comment.
The three executives take the reins of an operation that has notched several successes, particularly in China, but faces a raft of challenges from the slowing economy. In particular, meager bonuses this year have led to lower morale and some departures, say people familiar with the matter.
At a time when deals are drying up across the region, UBS is betting that elevating Shanghai-born Mr. Cai, who is known as one of the most persistent and aggressive bankers in China, will give it an advantage over rivals.
'My focus will continue to be on China in the new role,' Mr. Cai said in an interview. 'My broader job signals how important the UBS business we have built in China is to UBS globally and in Asia.'
UBS has been able to crack the China market by being more local than many of its peers. It has quickly built up its China joint-venture securities franchise, UBS Securities, in a market where rivals like Goldman Sachs Group Inc. have struggled to gain traction.
Mr. Cai has staked his reputation on his ability to build close ties to Chinese entrepreneurs. In September, Mr. Cai advised Chinese battery maker BYD Co. on its sale of a 10% stake to Warren Buffett's MidAmerican Energy Holdings Co., a unit of Berkshire Hathaway Inc., for $230 million. BYD will show a plug-in battery car model at Berkshire's annual meeting.
Capital markets in China and the rest of Asia remain effectively shut to large initial public offerings, the traditional mainstay of investment-banking firms there. Overall investment-banking revenue in Asia, excluding Japan and Australia, totals just $292 million so far this year, down 62% from $760 million over the same period last year.
'In Chinese characters, the word for 'crisis' also contains 'opportunity,' so we're going to take this opportunity to diversify our business,' Mr. Cai said in a telephone interview. 'We are expanding more into bond underwriting and also M&A in China.'
UBS hired Mr. Cai in March 2006 from BNP Paribas. Mr. Cai had worked at Peregrine, an investment-banking house in Asia known for its aggressive style, and before that served as an official at state-owned Shanghai Petrochemical, one of the first Chinese companies to list overseas.
The promotion of Messrs. Chin and Hanning to heads of investment banking will give them greater oversight over the firm's operations and deal flow. Mr. Chin led UBS's coverage of financial institutions in the region, including the sale of Wing Lung Bank to China Merchants Bank last year. Mr. Hanning has led the mergers and acquisition team for the region and has advised Hong Kong telephone operator PCCW Ltd. on its privatization, which still requires court approval. |
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