Hugh Herman, chairman of South Africa-based Investec, was in Hong Kong recently checking up on the business and meeting clients. Taking a break to meet with FinanceAsia, he noted that Investec is the first bank from an emerging market to achieve a listing in London, and that it is the most international bank that was founded in an emerging market. The firm's story, therefore, should have some resonance for Asian financial institutions seeking regional or even global glory.

"One thing we've learned is that you can't be on too many fronts at one time," Herman says. "Patience is valuable. We're a niche bank and we intend to stay in our niche. We can't manage bulge-bracket costs with niche revenues."

Investec learned that lesson the hard way with an ill-fated expansion into North America, where it had acquired a wholesale broker and a corporate finance business in Philadelphia, which has suffered badly since the tech bubble burst. Now Investec maintains just a few trading desks in the United States.

Herman says the rash move should have been obvious. "It was self-evident but lots of people make the same mistakes."

The experience makes Investec chary of expanding too quickly in Asia, where it maintains a banking presence for its South African relationships, as well as an asset management business headed by Stewart Aldcroft. "There's enormous potential in Asia but how do you tackle it?" Herman says. "There's been talk about China for a long time, but how many companies have really done well there?"

Investec is determined, however, to gradually transform itself into a global player, and to that end it successfully listed on the London Stock Exchange last summer, after winning Johannesburg's consent to lift exchange controls. But the firm had to agree to a clumsy compromise in which the Africa-based businesses remain listed at home and the rest under London's umbrella. Although both entities share a board of directors, they must separately adhere to South African and British accounting and legal standards. This was the price Investec had to pay, for a complete move to London would have gutted the South African stock market.

Herman says the firm has spent the past year building mass in the United Kingdom and smoothing the quirks in its cumbersome structure. Now 20% of the South African entity's shares are owned by foreigners, which he sees as a vote of confidence. And while South Africa remains an important profit centre and the spiritual heart of the organization, two-thirds of its assets are now under the UK wing.

Today the British entity encompasses private banking, investment banking, asset management, and treasury/structured finance businesses, all of roughly equal weight. Much of this has been acquired, for example its retail funds business comes from buying Guinness Flight several years ago. Investec now employs 800 people worldwide in asset management, with £6 billion ($9.7 billion) under management in the UK alone.

The point of listing in London was to gain access to cheaper capital - which is difficult to secure in an emerging market - and Investec intends to use it as a base to make further acquisitions, in private banking, asset management and banking. Asia has seen preliminary action: for example, Investec has recently established a treasury desk in Hong Kong.

But the goal for the next 12 months is to consolidate these businesses, integrate the cultures, and in Hong Kong to continue rolling out new products. Although the firm is keen to develop the Asian business further, Herman says it has learnt that it must wait until the UK side is more established.

"The priority is to grow our London business," Herman says. "It hasn't been an easy time for investment banking, and with the market drops, it hasn't been a picnic for asset management either. We need to build our London assets and reach a critical mass. We have the right people, and now it's a question of putting our heads down and building a track record."

Financial institutions from emerging markets don't have the luxuries of brethren from more developed countries. Investec is the most successful firm to come out of an emerging market so far. As companies in China, India and other Asian nations continue to build a presence overseas, they may want to take a closer look at this South African pioneer.