Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
The name change comes as the Hong Kong-based equity brokerage and corporate finance businesses, which until now have operated as a separate unit under the name of BNP Paribas Peregrine, are finally being interated into the BNP Paribas platform.
Jacques dÆEstais, global head of corporate and investment banking at BNP Paribas, says while the changes wonÆt be immediately noticeable to clients, over time they should result in better access to cross-boarder M&A solutions as well as more synergies between the cash equity operations and the derivatives business now under BNP Paribas.
ôThis is the next step in the Peregrine story that will see the Peregrine clients get more access to international products and our international clients get access to more Peregrine products. The clients can only benefit from this,ö he told a press conference in Hong Kong.
That may be, and you could argue that the rebranding was also long overdue given the lengthy and somewhat cumbersome nature of the combined name. Other investment banks have gone the same way in recent years with names like JPMorgan Chase, Morgan Stanley Dean Witter, UBS Warburg and Credit Suisse First Boston now relegated to the history books.
But among Hong Kong retail investors Peregrine is still a highly regarded name and, as one banker remarked last night, BNP Paribas will always be synonymous with Peregrine.
Initially it also made a lot of sense for BNP Paribas as a relative newcomer to the region to keep the Peregrine name, which carried a lot of weight in China after co-founding deal-maker Francis Leung pioneered the red-chip IPO boom in the mid-1990s.
ôI donÆt think they would have bought it if it hadnÆt been for the Peregrine name,ö the banker said of the 1998 buyout.
Peregrine collapsed in January 1998 under $400 million of debt that was caused by a series of failed investments in Southeast Asia, including Burma and Vietnam. The final straw was a loan to an Indonesian taxi company with links to the Suharto family, which became impossible to recuperate after the plunge in the rupiah during the financial crisis. The $265 million loan represented about a quarter to one-third of PeregrineÆs entire capital.
The French bank stepped in and bought the ailing Hong Kong investment bank a few months later in a deal that was financially engineered by Leung. Leung himself left Peregrine in May 2001 to head up the investment banking business at Salomon Smith Barney.
Back in the present time, BNP ParibasÆ dÆEstais says the bank is looking to increase the headcount of its corporate and investment banking business in China by about 50% by 2008 from about 250 staff today. This will help realise the organic growth focus it has within capital markets and fixed income in particular, he adds.
DÆEstais estimates that the China operations have seen 30%-40% growth in revenues over the past year, while Asia including Japan now accounts for about 20% of the bankÆs corporate and investment banking revenues globally.
He further noted that BNP Paribas is happy with its mid-cap franchise, which has been very active in helping mid-sized Chinese companies list in Hong Kong, but says the bank intends to become more active in cross-boarder M&As.
ôI think we can be of service to our Chinese clients due to our expertise in Europe,ö he says.
While the bank doesnÆt fear the increasing competition for mid-cap mandates in China and the recent loss of some of its China-focused bankers to rivals as it is ônot a small player and has the balance sheet and team to compete.ö However, dÆEstais says the bank is considering following the lead of larger rivals such as Morgan Stanley and Goldman Sachs and getting into direct investments as a means of getting involved in these Chinese companies at an earlier stage.
Earlier this week, BNP Paribas said its Asian equity brokerage business (including research) will be led by Pierre Rousseau, head of BNP Paribas Securities (Asia) and also global head of equity brokerage. The corporate finance business, within includes equity capital markets and ECM, will be headed up by Christian de Charnace, head of BNP Paribas Coroprate Finance, Asia Pacific.
Insto roundup: FWD files for ADR listing in New York; Nippon Wealth Life fully acquired by parent firm
Intrust Super chief executive to step down after merger; Aware acquires site for essential worker affordable housing; China bans cryptocurrency-related business activities; Hong Kong insure FWD filed for US listing of ADRs; Nippon Life acquires wealth life insurance from MassMutual; NPS to hire five investment managers to diversify portfolio; Malaysia to review Spacs framework; EPF reports $8 billion investment income; and more
Hesitancy aside, institutional investors eye Australia and Japan as promising geographies for private debt investments within Asia Pacific, with Greater China and Korea on the periphery.
While Asia still lags the global average, interest in sustainable projects is growing fast; the only thing needed now is the expertise to drive growth
Regulators keep their eyes open on tightening insurance industry by introducing more detailed risk management requirements, which could bring pressure on smaller players.