M&A Advisors Moving to Asia — Is it officially a trend?

Posted on Wednesday, 21 May 2008. Filed under: Commentary, Mergers |

Two days ago, the BBC called me to talk about the move to Asia of senior investment bankers, as there had been a flurry of reports in the past several months about managing directors (Credit Suisse, Citi, Deutsche Bank, Morgan Stanley) moving to Hong Kong and other places in Asia from their current perches in New York or London.  You can see the BBC News article here, but it was also widely picked up in the past couple days by other media, ranging from Money Morning in the US to Finance Markets in the UK.

Investment bankers follow the money.  I can relate to this as while at Morgan Stanley in the 1980’s and 1990’s, I personally was transferred by the company first to Japan as that country was flexing it’s financial muscles in the mid-1980’s and then to Germany following the fall of the Berlin Wall and the reunification of the country.

With sovereign wealth funds (many being based in Asia) having a lot of money, with Asia having escaped the worst of the credit crunch and with the crunch having hit the US and Europe the hardest, it is not surprising at all to see this trend of executives – and indeed corporate centres of excellence – to Asia.  Once you get critical mass in a location, it begins to snowball and that is what is happening there. 

This doesn’t mean that London and New York will lose their crowns as respectively the #1 and #2 global financial capitals, but it may mean that their combined market share is lower.  It does, however, mean that the second tier financial centres – for example, Frankfurt, Chicago, Paris – will be most affected.

Do you think this is a long-term trend?  I think it applies to M&A (the focus of this blog) as much as any other area of investment banking, but we’re short of evidence at this point except anecdotally.

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