Reorient Group, a mainland China-backed boutique bank, has gained a US broker-dealer licence, which it will use to create new distribution channels for public stock transactions and China-focused research.
“We can now have a presence in the US to build a brand and distribute our research," says chief executive Brett McGonegal. It got the licence last week.
At the same time, Hong Kong-based Reorient plans to further its asset management business following its acquisition of one-third of Seoul-based EQ Partners, a private equity firm with $800 million in AUM, he tells AsianInvestor.
One of Reorient’s business lines is focused on developing, structuring and distributing deals, including China deals for global investors, or Chinese cross-border investments.
The firm is backed by China Chengtong Holdings, a mainland conglomerate with more than 100 subsidiaries and Rmb6 billion ($980 million) in total assets.
However, Reorient does not have its sights on covering the US market. “We are not going to try to become a US player,” says McGonegal, “but we do think customers there will gain a huge amount of competitive advantage from our China and Asia research.”
Another growth area is in asset management, which it is has positioned as a vertical to its existing investment banking and institutional equity sales and trading businesses.
McGonegal declined to detail its plans, saying only: “We have a lot of irons in the fire right now. Hopefully we’ll be furthering our asset management rollout shortly.”
Its partnership with EQ Partners is aimed at helping foster cross-border deals between South Korea and China. It has already taken part in a major private equity acquisition involving investors from South Korea and Taiwan.
In January, EQ Partners was part of an Asian consortium that paid $1.1 billion for the Canadian iron ore mining and infrastructure assets of ArcelorMittal.
The other consortium members were National Pension Service of Korea, Korean steelmaker Posco and Taiwanese steelmaker China Steel Corporation, according to Mergermarket research.