Deutsche's new man speaks

A: The principal difference would be Deutsche has a much more global approach. That is particularly true for the M&A business where there is a global head. There is a big emphasis on making the global platform work more efficiently. The encouraging thing for me is that all the elements required to build a successful investment bank are now in place. The infrastructure is strong and now we just have to step it up a gear, and raise our profile.

Q: Do you have more people working for you here than you did at Barings?

A: No, I have less. We will be building that team up selectively as we progress through the year.

Q: How many people will you hire?

A: We’re still in the review process and I don’t yet have a fixed number in mind. We will recruit selectively and cautiously and I would like to recruit people that we can support with our deal pipeline.

Q: At Barings you did a lot of smaller-sized M&A transactions. Is that going to be the case at Deutsche?

A: At all firms you try and target the bigger deals, because that’s where you get the recognition and the profile. The situation at Barings was somewhat different because we had extensive country coverage from an investment banking perspective. We did a lot of repeat business and would act for the client on multiple deals. And therefore we were prepared to work on deals that were below the optimum size. At Deutsche we will be targeting and prioritizing our clients very carefully, and will hopefully be doing transactions that are on average of a larger size.

Q: Do you have many mandates at the moment?

A: We have what I’d judge to be quite a healthy pipeline.

Q: Is the Asian M&A deal flow as strong today as it was a year ago?

A: I haven’t seen any evidence of a big tailoff of Asian M&A. There are clearly concerns in Europe and the US. I don’t think the market will be as big from a total value point of view. But we’ll still be quite busy.

Q: Last year was defined as the year of telecoms M&A. Will that continue – in Asia?

A: I think so. We’re now seeing a greater focus and rationalization. 3G has really changed the perception of the telecoms industry, in terms of price and reward, and that will filter through. The two other big sectors this year will be financial institutions – because there will be continuing rationalization of the banking sector – and utilities too.

Q: It seems to be hard to close banking deals. HSBC has obviously failed to do so in Korea and Thailand.

A: Banking deals are notoriously difficult to close. These deals raise a lot of issues for the community in which that bank operates, so they are tricky things to buy and they tend to take quite a lot of time to close.

Q: Are you bullish on the prospects for M&A in the semiconductor business?

A: Yes. It is an interesting industry and there were a number of deals closed at the end of last year with the US players coming to Asia. That is an area that will continue to grow.

Q: In this respect, is Taiwan the most exciting market?

A: Yes.

Q: Do you see Taiwanese semiconductor companies being bought or looking themselves to buy?

A: Taiwanese companies will probably try to buy outside Taiwan, especially to acquire the next generation of technology. The biggest deal of that sort was Yageo buying Philips component business in Europe.

Q: Which countries will be the most active for Asian M&A this year?

A: Korea, Taiwan and Hong Kong and Singapore.

Q: What’s your view on the Philippines?

A: It is early days for the new government and there is a legacy of economic problems to resolve. There will need to be six months of hard work by the new administration to establish their credibility in the eyes of the international markets and improve investor confidence. The long term prospects for the Philippines remain excellent – given the demographics and the education levels.

Q: The government’s stake in San Miguel could be an interesting M&A opportunity?

A: It’s clearly an area most M&A bankers are keeping their eyes on. The resolution of this will be complex. It’s been in the courts for 12 years.

Q: Will it be a tough year for the private equity funds?

A: No, this year will continue to create opportunities for those guys. There are a number of good assets around that will be available. You may see, however, more competition from your traditional strategic investors for that same asset.

Q: What’s your view on the potential for M&A in China?

A: It’s still very early days, and domestic corporates have not been used to hiring investment banks to assist them. There will be an increasing amount of foreign investment into China and that’s where the investment banks can play an important role. It will develop but it will be a slow process.

Q: At Barings you were very successful in M&A. Deutsche has not had a strong presence in Asian M&A. How are you going to change that?

A: Deutsche has an extensive commercial banking presence around the region with large offices in every country. There are programs in place for client prioritization, and I would like to try and increase the frequency of transactions we do for our targeted clients. One of the great measures of success for an M&A practice is its repeat business. That’s something we demonstrated at Barings time and again. That repeat business comes out of excellence in execution. My immediate task is to really ensure that the transactions we’re involved in are executed well, and that in turn will lift the profile of Deutsche Bank.