Banking: Goldman rebuilds Asia Pacific pack as Ryan retires

By:
Anuj Gangahar
Published on:

Veteran US healthcare dealmaker takes charge; UBS tops first-half fee tables

Goldman Sachs has reshuffled its senior management in the Asia-Pacific region, appointing Ken Hitchner as president of its operations, taking over from David Ryan, who is retiring from the firm at the age of 43.

Hitchner’s appointment comes as international investment banks face increasing competition in the region, with local banks gaining ground in important markets including China, India, Indonesia, Malaysia and Thailand.

Market uncertainty has also hit hard the prospects for initial public offerings. This was, for many years, the lifeblood of the international investment bank in Asia Pacific. With the dearth of IPOs in China and Hong Kong, many banks have been scrambling to bolster their operations in southeast Asia, where the market for equity offerings has remained strong. Southeast Asia ECM volume reached $19.1 billion via 144 deals in the first half of this year, up 65% from the $11.6 billion raised in the same period last year via 121 deals. This was the highest first-half volume for the region on record.

Hitchner’s appointment raised some eyebrows in the market because of his lack of Asia experience – this is his first appointment in the region.

Commenting on his appointment and seemingly trying to pre-empt any such doubts in the market about Hitchner’s lack of Asia experience, Lloyd Blankfein, chairman and chief executive of Goldman Sachs, said in a statement: "Ken’s deep knowledge of key industry sectors that are growing at a fast pace in Asia Pacific, and his experience serving global clients in complex strategic environments, will provide valuable support to our client franchise."

Hitchner is a long-time Goldman banker who has built his reputation on his work on healthcare deals in the US in particular.

On assuming the role later this year he will be based in Hong Kong and work closely with Mark Schwartz, chairman of Goldman Sachs Asia Pacific, and Masa Mochida, president of Goldman Sachs Japan.

His appointment comes after Goldman recently poached Kate Richdale from rival Morgan Stanley as head of investment banking services for Asia ex-Japan, where she takes responsibility for client coverage in the region. Her departure in turn sparked a reshuffle at Morgan Stanley, where she was replaced by Dieter Turowski and Shane Zhang. Turowski was most recently global co-head of natural resources and Zhang was co-head of China investment banking.

Hitchner is currently global head of the healthcare banking group and global co-head of the technology, media and telecom group. He joined Goldman Sachs in 1991 in the corporate finance department and was a founding member of the healthcare banking group in 1995. He has been a partner at Goldman for more than 10 years and, before joining the Wall Street bank, was a lieutenant commander and aviator in the US navy. He is also an adjunct professor at Columbia Business School.

Ryan is widely respected in the region for the role he has played in broadening the Goldman franchise. He first joined the bank in 1992 as a financial analyst in the investment banking division, later moving to Hong Kong to head the financing group in Asia ex-Japan. In 2008 he relocated to Singapore to become chairman of southeast Asia. He was named head of the investment banking division in Asia Pacific ex-Japan in 2010 and assumed his current role in 2011. On his retirement, according to a statement from Goldman, Ryan will become a senior director of the firm.

Goldman has some work to do to recapture former glories for Asia Pacific, according to the league tables. For the first half of the year, UBS led the way with combined revenue from investment banking of $293 million, just ahead of Citi and JPMorgan. Goldman occupies seventh place in the first-half tables, slightly ahead of Morgan Stanley in eighth place.

Asia Pacific (ex Japan) IB revenue rankings H1 2013

UBS trails HSBC in debt and is fourth in M&A, but tops the overall table primarily because of its powerful equities franchise.

Some analysts claim that the UBS business in the region is too reliant not only on equities, but also on the twin pillars of its China and Australia operations. In another important appointment for the region, UBS last month moved to tackle such criticisms head-on by appointing Saurabh Beniwal to the newly created role of head of investment banking for southeast Asia (excluding the Philippines). Beniwal, who is based in Singapore, will combine his new role with that of his existing one as head of technology, media and telecoms for Asia.

UBS has already made some progress in southeast Asia in recent months, primarily through its involvement in two transactions by Dhanin Chearavanont, a Thai billionaire. It part-funded Dhanin’s $9 billion-plus acquisition of HSBC’s stake in Ping An Insurance and, alongside HSBC, provided most of a $6 billion loan for Dhanin’s announced bid for Thai discount-store operator Siam Makro.