Alvarez & Marsal targets China turnarounds, opens Beijing branch

Alvarez & Marsal (A&M) has launched a second mainland office in Beijing, where it has appointed two management consulting veterans to help augment its turnaround activities in China.

The US-based consulting firm, which specialises in corporate restructuring and turnarounds, has appointed Lei Wang to its Beijing office as senior director and Eric Wang as director. They report to Hong Kong-based Oliver Stratton, managing director and head of A&M’s business in Asia.

Lei Wang joins from McKinsey & Company in Beijing where he worked in the firm’s business technology practice, while Eric Wang hails from The Blue Planet Group – a global e-commerce and supply chain consultancy with offices in Colorado and China – where he was a founding partner; he had previously been based in the US as a management consultant with Bain & Company.

A&M, which launched a Shanghai office in 2007, is “seeing situations where companies have not adapted quickly enough and are experiencing financial distress, and therefore need support to ensure a successful turnaround”, says Stratton.

While there have historically been few turnarounds in China, “we expect this to change as a result of changing macroeconomic conditions, increasing domestic market competition, and increasing investor and creditor scrutiny”, he adds.

“Recently, the majority of Asian private equity investment is in China, and A&M is able to work with those investors in their portfolio businesses on efficiency improvement, revenue growth and supporting their extension into overseas markets.”

Another focus area in China is forensic accounting, particularly involving cases of alleged fraud by Chinese firms that listed in the US via a reverse takeover. A&M’s forensic accounting practice is already participating in a range of investigations, according to Stratton.

In China, A&M has worked with clients on merger and acquisition strategies, due diligence, forensic investigations, operational turnarounds and financial restructuring. Its clientele includes private equity and hedge funds, investment banks, lenders and strategic investors that are deploying capital in the region.

A&M says it has plans to grow its Beijing team significantly in the coming 12 months, although the firm declined to give exact figures. It has about 20 staff across its offices in Hong Kong, Shanghai and Beijing.

“Many of our clients are already based in Beijing, or have offices there, and we also see the potential of the local market for our services over the longer term,” says Stratton.