Thursday, May 19 2022

(Bloomberg) – Investment banks are increasing their tech hires in Southeast Asia and India as the region’s rapidly growing consumer internet markets catch up with their peers, pushing deals to new heights.

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Global lenders Barclays Plc and Citigroup Inc. have created new leadership positions, while regional and boutique players are recruiting staff to capture increased activity in mergers and acquisitions and initial public offerings.

“Every investment bank is looking to hire bankers in technology, media and telecommunications,” said Anand Menon, managing director of Executive Principles, a headhunting firm in India. “TMT is an animal that produces several 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 impetus given by the coronavirus pandemic to e-commerce and remote working, financiers strive to work with startups as they open up markets with a combined population of around 2 billion.

In Southeast Asia, Citigroup has created a new CEO role to oversee TMT, Bloomberg News reported. BDA Partners Inc., BNP Paribas SA and Malayan Banking Bhd. are among other banks that have recently recruited or are in the process of recruiting in the sector in the region, people familiar with the matter said, asking not to be identified to discuss internal issues.

Barclays Indian investment bank manager Pramod Kumar said the company was strengthening its team in Mumbai by adding a senior executive position. JPMorgan Chase & Co. is hiring a TMT banker at the executive director level, according to a person familiar with the matter.

Representatives of BNP Paribas and JPMorgan declined to comment. A representative from BDA Partners said the company is active in technology investment banking services in India and Southeast Asia and will continue to hire in this 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 expand its business, including TMT.

Ashish Kehair, CEO of Edelweiss Wealth Management in India, said his investment banking unit hires three to five bankers with technological expertise. “Digital and technology are now having a force multiplier effect,” he said.

Registration of the transaction

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

The consolidation of regional leaders is already underway. Rideshare and payments giant Gojek agreed to team up with e-commerce pioneer PT Tokopedia in May to create Indonesia’s largest internet business. The next stop is the capital markets, where the combined company plans to mop up as much as $ 2 billion on listings in the country and the United States for a valuation of around $ 30 billion, Bloomberg News reported in July.

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

“The pandemic has provided powerful tailwinds in terms of faster consumer adoption of online business models,” said Jeff Acton, Tokyo-based partner of boutique investment bank BDA Partners. “Southeast Asia’s tech ecosystem is relatively younger, but many first-generation tech companies have suddenly seen an increase in demand. “

Consumer-focused businesses led the first wave of listings. Indonesian online marketplace PT raised $ 1.5 billion in August, while food ordering platform Zomato Ltd. raised $ 1.3 billion during its Indian IPO.

Read more: Indian IPOs to raise $ 10 billion in next six months, says KPMG

“The consumer Internet market in these regions is reaching critical mass and continues to show very robust growth, which has supercharged the major companies in the region,” said James Perry, Managing Director and Co-Head of the Asia-Pacific technology investment bank at Citigroup. . “Disruption is still a major theme and investors are keen to invest in these opportunities.”

China Tailwind

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

Investors expect greater clarity on regulatory matters in China, said Vijendran of Maybank. “The crackdown in China has drawn the attention of global players and US PSPCs to ASEAN startups,” he said.

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

Although Asia’s largest economy has seen some dislocation this year due to Beijing’s political actions, deal activity is expected to return over time as this market continues to create new “exciting” businesses, he said. said Perry of Citigroup.

“The rise in valuation of digitech is playing out across all companies,” said Kumar of Barclays. “This is an age-old trend driven by the convergence of technology and traditional industries, and it is sure to continue.”

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