Category: Banking & Finance

Global lenders Barclays Plc and Citigroup Inc. have created new senior roles, while regional and boutique players are staffing up to capture a surge of activity in mergers and acquisitions and initial public offerings.

“Every single investment bank is looking to hire technology, media and telecommunications bankers,” said Anand Menon, managing director of Executive Principles, a head-hunting firm in India. “TMT is an animal producing multiple babies. We need new-age bankers who think like entrepreneurs to cover them with the same speed as these startups.”

Technology-focused investment bankers in Asia previously focused on larger and more developed markets such as Japan and South Korea, and more recently, China. Galvanized by the coronavirus pandemic’s boost to e-commerce and remote working, financiers are jockeying to work with startups as they open up markets with a combined population of about 2 billion.

In Southeast Asia, Citigroup created a new managing director role to oversee TMT, Bloomberg News has reported. BDA Partners Inc., BNP Paribas SA, and Malayan Banking Bhd. are among the other banks that have recently made or are making sector hires in the region, people familiar with the matter said, asking not to be identified discussing internal matters.

Barclays’s India investment bank chief, Pramod Kumar, said the firm is beefing up its team in Mumbai by adding a senior posting. JPMorgan Chase & Co. is hiring a TMT banker at the executive director level, according to a person familiar with the matter.

Representatives for BNP Paribas and JPMorgan declined to comment. A representative for BDA Partners said the firm is active in India and Southeast Asia technology investment banking and will continue to hire in the space. Rajiv Vijendran, regional head of investment banking at Maybank Kim Eng Group in Singapore, said the bank is constantly looking for new areas to grow the business, including TMT.

Ashish Kehair, chief executive officer at India’s Edelweiss Wealth Management, said its investment banking unit is hiring three to five bankers with technology expertise. “Digital and technology has the force multiplier effect now,” he said.

The bankers will have their hands full. Technology, telecommunications and media deals announced in South and Southeast Asia are at a record $93 billion this year, nearly double the same period last year, according to data compiled by Bloomberg.

Consolidation of regional leaders is already taking place. Ride-hailing and payments giant Gojek agreed to combine with e-commerce pioneer PT Tokopedia in May to create the largest internet company in Indonesia. Next stop is the capital markets, where the combined firm is considering mopping up as much as $2 billion from listings at home and in the U.S. at a valuation of about $30 billion, Bloomberg News reported in July.

Tech startups in Southeast Asia and India are maturing in terms of scale and size, with many becoming unicorns and some ready to go public either through direct listings or mergers with blank-check firms, said Jwalant Nanavati, head of TMT for Asia ex-Japan at Nomura Holdings Inc. In April, the Japanese bank hired an executive director in Singapore focusing on TMT, Bloomberg News has reported.

“The pandemic provided strong tail winds in terms of faster adoption by consumers of online business models,” said Jeff Acton, a Tokyo-based partner at boutique investment bank BDA Partners. “Southeast Asia’s tech ecosystem is relatively younger, but many first-generation tech companies suddenly saw an increase in demand.”

Consumer-oriented firms have led the first wave of listings. Indonesian online marketplace PT Bukalapak.com raised $1.5 billion in August, while food ordering platform Zomato Ltd. has mobilized $1.3 billion from its Indian IPO.

“The consumer internet market in these regions is reaching critical mass and continues to show very robust growth, which has super charged the leading companies across the region,” said James Perry, managing director and co-head of Asia Pacific technology investment banking at Citigroup. “Disruption is still a major theme and investors are keen to invest in these opportunities.”

Bankers said China’s sweeping crackdown on its technology giants has benefited other countries in the region, as potential acquirers such as special purpose acquisition companies have lately shunned its startups.

Investors are waiting for greater clarity around the regulatory issues in China, said Maybank’s Vijendran. “The China crackdown has focused the attention of global players and U.S. SPACs on ASEAN startups,” he said.

“Given the high risk profile due to recent developments, we expect investors will allocate an increasing proportion into Southeast Asia,” BDA’s Acton said, adding China will still remain a crucial destination for capital.

Though Asia’s biggest economy has seen some dislocation this year because of Beijing’s policy actions, deal activity is set to return over time as that market continues to create new “exciting” companies, said Citigroup’s Perry.

“Valuation uptick in digitech is playing across all companies,” Barclays’s Kumar said. “This is a secular trend driven by the convergence of technology and traditional sectors, and this is bound to continue.”