FinanceAsia is pleased to announce the winners of its house awards, the final part of a three-part series revealing our Achievement Awards for 2018.
In previous days, we have announced the winners of the best deals by country and in a range of categories. Today we focus on the organisations that made those deals and others like them happen.
BANK OF THE YEAR
Asia’s banking industry has evolved in a way where banks need to cope with ever-increasing demand from clients for better banking experience, product diversification, more tailored offerings and higher investment returns.
And while globalisation means that banks need to take a holistic approach to new banking regulations and managing compliance risks, the rise of Asia’s middle-class suggests that they need to offer more localised solutions and maintain a well-balanced franchise in order to capitalize fully on such growth.
Citi has taken huge steps to coordinate its various business divisions across different jurisdictions to capture Asia’s growth. The bank’s success has been reflected in its nearly 30% net income growth for the first nine months for its Asia business that has been generated fairly evenly from 10 major markets.
To be sure, Citi has been working towards an integrated model where consumer banking operates closely with corporate and investment banking to allow more cross-selling opportunities.
In terms of client relationship, Citi has adopted a strategy of building long-term relations with corporate clients instead of taking on one-off advisory roles. As part of the strategy, Citi has been assigning more bankers to attend regular meetings with corporate clients, during which they can offer their advice on supply chain, digital transformation, as well as other issues that are related to their daily operations.
It is clear that Citi is putting more resources with the new strategy. The rewards are big too.
Citi’s relationship with Alibaba is arguably the most successful example from this strategy. The bank was able to turn the countless hours spent on advising the Chinese e-commerce giant on supply chain management into revenue. It now banks a large part of Alibaba’s business and is one of the main banks to support the Chinese group with cash management, trade finance and corporate treasury solutions.
Naturally, this corporate banking relationship has turned into a lucrative business for investment banking too.
The American bank acted as joint financial advisor to Ant Financial in its record-breaking $14 billion Series C financing in June, which marked another big piece of business from the Alibaba group after being the sole depositary bank and one of the lead bookrunners for Alibaba’s mammoth $25 billion initial public offering in 2014.
In investment banking, Citi has had a hugely successful year underscored by its involvement in a number of award-winning transactions from FinanceAsia.
Besides Ant Financial’s Series C funding (awarded FinanceAsia’s Best China Deal and Best Equity Financing), Citi was a buyside advisor on Advanced Semiconductor Engineering’s $3.35 billion merger with Silicon Precision Industries, FinanceAsia’s Best Taiwan Deal of the year and perhaps one of the most complicated M&A cases out of the island.
Citi was also a financial advisor to ESR-Reit on its merger with Viva Industrial Trust, which was awarded Best Singapore Deal of the year, as well as being a joint global coordinator in Vinhomes’ $1.35 billion initial equity offering – the Best IPO of the region and the Best Vietnam Deal of the year.
BEST BELT & ROAD BANK
China’s Belt and Road initiative has become one of the key strategies for global banks. But while many banks are still working out how many resources they plan to dedicate to Belt and Road-related projects, HSBC has prioritised it as the firm’s top strategy in Asia for the years to come.
HSBC was the first international bank to appoint a senior executive to lead BRI. In May, it appointed former Malaysia CEO Mukhtar Hussain as head of BRI in Asia-Pacific.
To be sure, HSBC’s universal banking model and its exposure in multiple BRI economies offer it an advantage against rival banks. In particular, HSBC’s strong trade finance, cash and supply chain management capabilities make it the go-to bank for importers and exports in BRI countries.
HSBC has partnerships and memberships with major BRI organisations such as HKMA Infrastructure Financing Facilitation Office, Hong Kong Trade Development Council, Asia-Pacific Financial Co-operation Association and Hong Kong Green Finance Association, among others.
The bank is actively working on projects to support BRI. For instance, it has set up 25 China desks around the world to complement its large onshore network in China.
Among the many BRI projects undertaken by HSBC this year, Hong Kong Airport’s Three-Runway System was undoubtedly the most important as it helps Hong Kong, which is often referred to as the gateway to China, meet the increasing traffic demand of Chinese companies going out to the Belt and Road countries.
HSBC was the sole financial adviser for the project estimated to be worth HK$142 billion ($18 billion).
Some other key BRI projects undertaken by HSBC include China Merchants Port’s acquisition of the concession rights of TCP and the Hambantota Port in Sri Lanka, and SPIC’s purchase for a 30-year concession right of Sao Simao Hydropower Plant in Brazil. HSBC was lead arranger for loan facilities in both mega projects.
BEST INVESTMENT BANK
In a difficult year, Morgan Stanley has performed solidly across M&A, debt capital markets (DCM) and equity capital markets (ECM) and seen regional revenues rise an impressive 10%.
In M&A it led many of the notable transactions, advising on four of the top five largest M&A deals in 2018 and showing distinct geographic diversity into the bargain: China Three Gorges’ $30 billion offer to acquire Energias de Portugal; CKI, CKA and Power Asset Holdings’ $16.8 billion offer to acquire APA Group; Ant Financial’s blockbusting $14 billion Series C equity financing; and Geely’s $9 billion acquisition of a 9.69% stake in Daimler.
It had a strong year in ECM too, advising on some of the largest transactions. The headliners were, of course, Xiaomi, NIO and Meituan Diaping, but it was the sophistication of Morgan Stanley’s transaction execution, sectoral knowledge and repeat business that really sealed the deal.
It kept its head during Tencent’s $9.8 billion secondary accelerated bookbuild offering – the largest block to hit the markets to date; it sponsored BeiGene, not only the largest biotech IPO globally since 2000 but under new listing rules in Hong Kong too; and for India’s HDFC Bank it completed two follow-ons and an IPO of its asset management and life insurance businesses.
In a difficult year for the bond markets, it continued to dominate high-yield across sectors and geographies. Notable transactions include the region’s largest Reg S corporate high-yield deal and China’s largest corporate high-yield deal.
For India’s Tata Steel it priced $1.3 billion two-tranche paper that was covered within an hour of books opening and which allowed Morgan Stanley as joint global coordinator and bookrunner to tighten in pricing by 37.5bp and 42.5bp on the five and 10-year notes. And Sunac’s $1 billion dual-tranche offering was the largest real estate high yield offering in the region, again with exemplary execution that allowed the bank to tighten in pricing significantly.
But it didn’t just play it safe. The bank also ran high-yield debt deals in more challenging markets including the largest Indonesian corporate HY offering for Medco Energi, the maiden Cambodia deal for NagaCorp, and the $500 million five-year for Development Bank of Mongolia.
To do all of this with a clean record on corporate governance is no easy task. Morgan Stanley has shown consistency of deal execution across the most complicated transactions for which it should be applauded.
BEST ASIAN INVESTMENT BANK
FinanceAsia’s Best Asian Investment Bank is one of the most sought-after awards as the region becomes an increasingly important driver of the global economy. We consider a true Asian Investment Bank to be competent in all IB products across different jurisdictions in Asia, including both mature and emerging markets.
Despite being a multiple-time winner in this category, DBS continues to dominate the award as the Singapore-headquartered bank extends its roots to cover more clients in Southeast Asia and even North Asia.
Throughout the years, DBS has aimed at being a regional bank in Southeast Asia but it is hungry for more. At the moment it has a footprint that covers almost the entire region, including some of the less accessible markets like India and Korea.
In India, DBS priced a dual-tranche, $1.3 billion bond sale for Tata Steel, the steel unit of one of the country’s largest multi-business conglomerates. The investment bank organized management roadshows for the issuer in Singapore, Hong Kong and the Middle East, a major contributing factor to the overwhelming demand of over $3.3 billion from nearly 300 accounts.
And in Korea, DBS was one of the arrangers of Korea Housing Finance Corporation’s €500 million ($573 million) five-year social covered bonds, the first out of Asia. It has broken the new ground and set a benchmark for future issuances targeting social responsible investment (SRI) investors.
KHFC is the housing finance policy arm of the Korean government. As such, the transaction once again demonstrated DBS’ strong connection with governments in Asia. DBS also advised on Indonesia’s sovereign bond sale this year.
It is worth mentioning that DBS’ position in the Asian US dollar bond market has grown over the years and it has become one of the top 10 bookrunners in the Asia ex-Japan G3 space, actively paving the way for regional banks to become dominant players in the Asian market.
BEST EQUITY HOUSE
Goldman Sachs stood out in a highly competitive year in Asia ex-Japan ECM by being a comprehensive underwriter across all geographies and products.
In a year of significant uptick in ECM activities, Goldman Sachs outnumbered all its rivals in terms of deal count and total fundraising volumes. The American bank underwrote 89 transactions and helped its clients raise nearly $15 billion in Asia (excluding Japan, Australia and China A-shares) during our award period, 17% more than its closest rival.
What was more outstanding was the fact that Goldman Sachs’ total deal volume has increased by nearly 220% from the same period last year, a clear signal that the investment bank did its best to capture businesses when overall volume rebounded this year.
As a matter of fact, deal volumes have become less significant in FinanceAsia’s judging process in recent years as Asia’s initial public offering market was distorted by mispricing of deals, and a substantial decrease in real institutional participation as the so-called “friends and family” money dominated IPOs as cornerstone investors.
As institutional money returned to what was a much healthier ECM market this year, the advisory and distribution capabilities of equity underwriters were back in check. And Goldman Sachs was clearly ahead of the curve.
Goldman Sachs sponsored Asia ex-Japan’s biggest IPO of the year – China Tower’s $6.9 billion deal in July – also the only jumbo Chinese state-owned entity to list this year. It was one of the handful of SOE deals to be well-distributed among institutional investors. Cornerstone investors, which also include investment funds like Hillhouse and Och-Ziff, accounted for only 20% of the total deal size.
Goldman Sachs also sponsored Asia ex-Japan’s second and third largest IPO – Xiaomi’s $5.4 billion and Meituan Dianping’s $4.2 billion offerings. The firm was lead left sponsor in both transactions.
And in a year of ADR revival, Goldman Sachs advised on all three billion-dollar US listings of Chinese firms, namely iQiyi’s $2.4 billion listing, Pinduoduo’s $1.6 billion floatation and Nio’s $1.1 billion deal. Altogether Goldman Sachs has advised on all of the six biggest Asian IPOs this year and has taken the role of joint global coordinator role in five of them.
Goldman Sachs also displayed excellent distribution capabilities for convertible bonds, being the sole bookrunner of Country Garden’s $2 billion deal in January and a joint bookrunner in the same issuer’s $1 billion deal in November.
And while the American investment bank has been typically perceived as China-focused, it has demonstrated its geographical diversity by advising on key deals outside Hong Kong/China. Notable transactions include Temasek’s $1 billion block trade in Celltrion and Celltrion Healthcare, Kakao’s $1 billion GDR sale and the sale of $1.3 billion worth of shares in Samsung Electronics.
For its product and geographical diversity and its ability to lead transactions with top roles among investment banks, Goldman Sachs is FinanceAsia’s top ECM house of the year.
BEST BOND HOUSE
What will it take to dislodge HSBC from its pre-eminent position as Asia’s most diversified and active bond house? Citi always has a good try and came far closer in 2018 than in recent years. Then there is Bank of China waiting in the wings.
But even in a difficult year like 2018, HSBC is still there at the top of the league tables. In fact, it demonstrated its excellence even more strongly this year by helping its clients to navigate difficult and often treacherous bond markets.
During the Asian bond markets go-go years, many players claimed their league table positions through deals that were neither well-structured nor well-syndicated. They have been found wanting during 2018 as investors became far more discerning about which banks were executing market-driven deals and which ones were not.
As a result, HSBC had few slip ups and pulled deals throughout the course of the year. It also helped to re-open the markets on numerous occasions.
Most notably, it was at the forefront of a spate of deals over the summer, which proved that investors were still receptive to the right credits. Chief among them was the 10-year deal for Temasek, which also demonstrated that the market was still there for duration.
Whatever the trend, HSBC is there, whether that be for short-dated deals, FRNs, private placements, green financing, or to take advantage of the Formosa market’s appetite for Asian credit.
It is an advisory and distribution powerhouse with great fixed income research to boot. HSBC’s strength across G3 and many of Asia’s local currency bond markets gives it a read, which makes it very hard to beat.
BEST M&A HOUSE
For all but three of the last eight years, Goldman Sachs has dominated the M&A league tables. This year the bank did so again with unmatched execution capability for high-profile transactions in Asia.
But it is not so much the volume of the deals that impressed most, rather the quality of the deals that it has completed over the past year and their geographic diversity.
Of course the bank was on FinanceAsia’s deal of the year as exclusive financial advisor on the coveted sell-side for the $16 billion sale of a 77% stake in India’s Flipkart Online Services to US retailer Walmart in May. This milestone transaction marks the largest India M&A deal ever, the largest transaction in Walmart’s history, and the highest ever valuation for a private company change-of-control transaction
In the same breath should be mentioned the US bank’s lead financial advisor role for the cross-border $20.5 billion acquisition of Global Logistic Properties (GLP). It was acquired and taken private by a consortium made up of Hopu, Hillhouse, SMG Eastern, Bank of China Group Investment and Vanke in January. The deal hit a number of firsts – it was the largest ever M&A deal in Southeast Asia as well as the biggest ever M&A deal in the Asia real estate sector, and the largest ever private equity buyout of an Asian company.
It says much about Goldman’s execution that the bank was also mandated lead arranger for the $4.1 billion debt financing for the acquisition of GLP and it assisted the consortium on its hedging strategy into the bargain.
The bank appeared on every high profile deal and helped the market into the bargain. It displayed its close relationship with KKR when it served as sole financial advisor for the private equity giant’s $1.6 billion acquisition of LCY Chemical in July. It was, of course, the largest M&A transaction in Taiwan this year and the country’s largest financial sponsor-led take private transaction for a decade, but perhaps more significantly, the deal reopened the Taiwanese market for financial sponsors.
Goldman Sachs remains the name to have on the ticket. It continued to be a trusted adviser of Hong Kong tycoons, picking up a highly prized mandate in the summer from Li-ka Shing’s CK Hutchison on its acquisition of a 50% stake in Wind Tre SpA for $16.3 billion.
Notably, Goldman’s M&A team also excelled in another field; defence versus an activist investor. The US investment bank was NYSE-listed Yum China’s anti-activism advisor and helped see off a $17.6 billion unsolicited proposal comprising Hillhouse Capital, KKR, CIC and Baring Private Equity Asia in July.
BEST LAW FIRM
Davis Polk & Wardwell
2018 proved to be a stellar year for Davis Polk & Wardwell across capital markets in Asia. The firm was active across debt, equity and mergers and acquisitions, representing some of the region’s largest and most high-profile clients in a number of ground-breaking deals.
In the DCM space, the firm acted on over 100 deals across geographies, asset classes and industries.
Among the main deals was the establishment of Sinopec's US$3 billion MTN programme, where Davis Polk advised the arrangers to establish a new Hong Kong-based financing and investment platform to execute the transaction quickly and efficiently.
In the ECM space, it acted on many of the largest IPO’s, including Meituan Dianping’s $4.2 billion offering in Hong Kong, and advising the managers for ICICI Securities $540 million stock offering in India.
Of course, the firm’s landmark transaction was its advisory role in Naspers’ divestment of a 2% stake in Chinese tech giant Tencent in March this year. The overnight block sale worth $9.8 billion in the Hong Kong-listed company, which is FinanceAsia’s Best Equity Deal of the Year, was the largest-ever share sale in Asia ex-Japan.
Truly a pan-regional firm, Davis Polk & Wardwell excelled in 2018 and played a strong hand in many of the region’s largest and most complicated deals.
BEST PRIVATE EQUITY FIRM
It is not easy to navigate a path between the Scylla of Tencent and the Charybdis of Alibaba, but Beijing-based private equity firm Sequoia Capital China has done so with panache.
Since it was founded in 2005, it has made more than 300 investments including heavyweights such as Meituan Dianping and JD.com as well as 46 exits.
Two particular deals stand out this year. First of all, Sequoia’s relationship with Pinduoduo. It came on board for the Chinese online group discounter’s Series B funding in July 2016 as part of an initial $110 million fundraising exercise.
Convinced by the company’s plans it joined Pinduoduo’s $213.7 million Series C funding in June last year and was a lead investor for its $1.4 billion Series D round of financing in April.
Proof of Neil Shen’s vision is that the founder and managing partner of Sequoia Capital China’s 6.8% stake in the company saw a $1.63 billion return on investment after Pinduoduo’s almost $1.9 billion Nasdaq IPO at the end of July.
He has repeated the move with online food delivery service Ele.me. Founded in 2008 in Shanghai, Sequoia Capital China led the company’s $25 million Series C funding in November 2013.
Since then the company has gobbled up all of its rivals. It bought the food delivery arm of internet search giant Baidu, for example, for $800 million and Ele.me was valued at $9.5 billion in April when Alibaba took control.
Shen, a former investment banker at Deutsche Bank Hong Kong, Chemical Bank, Lehman Brothers and Citibank, topped Forbes’ Midas List of the world's best venture capital investors this year. But his success and that of Sequoia is down the fact for all of the plaudits, he remains an entrepreneur. He has built his own business and understands the challenges.
BEST DIGITAL FINANCIAL SERVICES FIRM
It is unstoppable. For the second year running, Ant Financial, the private company behind China’s largest digital payment service provider, Alipay, has been named the best financial services firm.
First developed as an online payment system for Alibaba’s internet marketplace, its Alipay mobile payment platform has expanded into the physical world, enabling users to make payments instantly by scanning QR codes on their smartphones.
Ant Financial leverages big data and the mobile internet to serve both small companies and individuals. It has used its technological edge to expand into other financial services products including wealth management, financing, and insurance.
But its ambitions have always been greater than that. And in February it gave a glimmer of this when Alibaba announced a 33% equity interest in Ant Financial in place of a current profit-sharing arrangement.
Ahead of what is widely tipped to be a thrilling IPO, the fintech giant raised $14 billion Series C – the largest ever private fundraiser according to Crunchbase – in July.
Ant Financial was confident enough to make its fundraising an invitation-only event and while the $4 billion domestic tranche was for long-term supporters, for the $10 billion US dollar tranche sovereign wealth funds like Singapore’s Temasek and GIC were joined by Malaysia’s Khazanah Nasional as well as the Canada Pension Plan Investment Board.
By the late summer and with a valuation of $155 billion Ant Financial was named the world’s most valuable unlisted company.
It has had the confidence to flex its muscles outside the arena of financial services too. In China it has invested in transport with stakes in Didi Chuxing, Ofo, Hellobike and Souche, as well as consumer and services companies like Ele.me, Koubei and Yum China.
But it is also expanding outside of China, buying stakes in fintech companies around the region, such as its April investment into Bangladesh’s financial services provider bKash, bring banking to the unbanked and underbanked.
Investors remain understandably excited about Ant’s prospects and its plans ahead of a widely expected public listing. And when it does come, the initial public offering is likely to be the largest fundraising ever by a fintech innovator.
BEST BORROWER OF THE YEAR
At a first glance, it might seem strange that a company, which did not issue a benchmark bond issue during FinanceAsia’s awards period, has been given the accolade of best borrower.
But Reliance Industries' lack of bond financing is the key to understanding why it has been so successful. It entered calendar year 2018 with a financing and refinancing requirement of over $8.5 billion - almost double the level of recent years.
It managed to pull it off because of the skilful way it tapped into one of the year’s biggest trends: the resurgence of the syndicated loan market. Bank lending has been one of the few sources of growth during 2018 and Reliance was able to maximise it because of the relationships it has carefully cultivated over the years.
This has been particularly important since 2012 when it embarked on the biggest capex cycle of the company’s history to develop its hydrocarbons and then a retail and TMT business. In the process, capex needs ballooned from an estimated $20 billion to $30 billion to $55 billion.
Consequently, Reliance pulled off two noteworthy loans during 2018. One was a $2.7 billion syndicated financing in July, which attracted a record 44 banks and the other was a ¥53.5 billion ($473 million) Samurai loan in April, the largest ever by an Asian corporate.
Reliance’s sophisticated approach means that its capex programme has never ruffled investors. In the process, it has also been able to term out its debt profile from an average of three years to 6.5 years.
It has also re-balanced away from bonds to a healthier mix of one-third bonds, one-third loans and one-third ECA-supported transactions.
Indeed, the group says it has more active ECA relations globally (14) than any other corporate. This has helped it to lock in long-term capital at a cheap rate.
It also sets it up well for 2019, a year when its re-financing requirement will drop right back to a projected 20% of 2018’s level.
Anthony Tan, GRAB
Anthony Tan is one of Asia’s most admired chief executives in the region. He co-founded GrabTaxi in June 2012 with Harvard Business School classmate Tan Hooi Ling.
In six short years, it has become the dominant ride-sharing platform in Southeast Asia. It saw off rival Uber in March, and after its most recent $150 million funding round in mid-December, it is the region’s most valuable tech unicorn and worth an estimated $11 billion.
Tan himself is reckoned to have a personal net worth of $300 million according to Forbes.
No one doubted that cars would feature in Tan’s future. After a degree from the University of Chicago and his MBA, he was expected to follow his two elder brothers into TCMH Group, the Malaysian automotive manufacturer which was co-founded by his grandfather Tan Kim Hor in the 1970s.
But it was complaints from friends about the quality of the taxi services that gave him the idea that became MyTeksi. He wanted to make travel around his hometown of Kuala Lumpur safe and give taxi drivers an honest deal; a social dimension to business that runs like a thread through all of Tan’s work.
The company now operates in 225 cities in eight countries across the region. Its investors read like a who’s who of business, though Tan himself cites his first investor – his mother, Khor Swee Wah – as his most significant early backer.
Like Tan himself, who has taken Singapore citizenship, the company has been headquartered in the island nation since 2014, and Grab is spreading its wings into many different businesses. As well as a logical move into other forms of transport, the company boasts delivery services and is now betting heavily on financial services to accelerate financial inclusion.
Known for his work ethic (it is part of company mythology that the only time you can’t reach Tan is when he at the gym in the morning) he attributes much of his success to his Christianity, something he wears lightly but comes out in every interview.
Tan’s moves into different markets and sectors, are likely to bring ever-greater challenges. Industry watchers will be keeping a close eye on Indonesian rival Go-Jek. Founded by Harvard classmate and former friend Nadiem Makarim, as the two expand across the region, a battle is inevitable.
BEST RATINGS AGENCY
Moody’s Investor’s Service
Being the best ratings agency in Asia is more than a simple numbers game. In fact, the top three firms are almost neck-and-neck when it comes to total rated debt, number of rated entities and volume of published research.
For Moody’s Investors Service in the Asia-Pacific region these numbers are $14 trillion plus, 2,000 and 3,000 respectively.
Where Moody’s stands out is in its willingness to engage with the market and its commitment to developing new products that address current risks. Investors say they appreciate the firm’s approach to engaging in dialogue around the region through a series of conferences, third-party speaking engagements and investor roundtables.
This human touch gives Moody’s the chance to showcase the long-standing experience of its analyst team, and to build trust by informing the market about its compliance processes and its commitment to transparency.
In the past year, the agency has built on its sustainability credentials, rating more green bonds and looking at how it can apply ESG scores – and account for cybersecurity risks – across its ratings universe.
In its own back office, the agency is investing in ways to speed up processes and minimise human error, including developing a natural language generation application that writes commentary from Excel data, and a robot that can upload bond characteristics into its databases.
BEST PROJECT FINANCE HOUSE
The winner of FinanceAsia’s inaugural Project Finance House award impressed our judges both for its role alongside much larger banks on conventional project finance deals and for going off the beaten track to structure local currency loans for innovative projects.
In 2018, DBS committed $1.8 billion towards 23 projects worth $21 billion, picking up six financial advisory mandates and 23 lead arranger roles.
Headed by Saigon-based Wee Seng Lim, DBS’s project finance team was involved in several marquee transactions in the region including the NT$18.7 billion ($617 million) Formosa 1 offshore wind farm in Taiwan and the 1,200 megawatt $1.9 billion Nghi Son 2 power plant in Vietnam.
Importantly, DBS stretched the boundaries on traditional finance by structuring a loan package with a rupee ECB component for Fortum’s solar power project in India, and advising CGN Solar on a Rmb740 million ($108 million) 140 megawatt project in China where part of the cash flows will be used to alleviate poverty in 5,150 local households.
The bank also acted as joint bookrunner on a landmark green bond for Star Energy’s geothermal project in Indonesia, demonstrating its ability to go beyond loans to project bonds.
BEST ISLAMIC FINANCE HOUSE
CIMB holds a meaningful lead on its competitors in Asia’s Islamic bond markets, racking up 37 sukuk transactions for the year with a value of $4.2 billion, according to Dealogic.
The Malaysian bank played a lead role in the world’s first ever sovereign green sukuk for the Republic of Indonesia in February; and a $750 million 10-year sukuk wakala for Tenaga Nasional Berhad in November which attracted more than $1.25 billion in orders from 94 accounts.
The Indonesia deal was a standout comprising a dual-tranche $1.25 billion five-year green sukuk and a $1.75 billion 10-year sukuk wakala.
The green component provided diversification for Indonesia with 29% of the deal allocated to green investors, and marked a successful launch for the country’s newly established green sukuk framework.
Outside the bond markets, CIMB also recorded a stellar year in its Islamic loan and structured finance business, writing an M$2 billion ($484 million) Islamic term facility for Malaysia’s public sector home financing board and an M$1 billion refinance of DiGi Telecommunications’ conventional term loan.
These loans were notable for their size and complexity. CIMB is commended for the depth of its investment products including Shariah-compliant commodities futures, dual-currency deposits and callable securities.
BEST ASIAN PRIVATE BANK
The private banking team at DBS put together a comprehensive package of wealth planning and investment solutions to meet the challenge set by FinanceAsia. The trust arrangements were sensible and addressed the patriarch and the wider family’s broad concerns.
The DBS ECM team has the experience in assisting families with listing their property portfolio, which gave credibility to their suggestion of setting up a Reit. It also recommended putting a currency strategy in place to hedge against unexpected forex volatility in the region.
With the acquisition of a portion of the private banking businesses from SocGen and ANZ in recent years, DBS has a broader capability in this area.
To facilitate the business ambitions of the second generation, DBS offers a tailored programme which provides a learning and networking platform together with regular updates on new start-ups seeking funding from angel investors. The funding structures suggested provided the necessary checks and balances to satisfy the patriarch.
The bank was able to provide some original ideas with regards to debt restructuring and optimising its joint venture relationships. Its plan would enable the patriarch to monetise a portion of its investment and enable it to raise new capital to fund future growth.
In China, the bank’s local presence would provide a network with e-commerce and fintech companies in major cities.
Assessing the sub-optimal debt to equity ratio, the DBS DCM team, with a strong record in issuing unrated US dollar bonds, was well-positioned to tap the investor market.
BEST GLOBAL PRIVATE BANK IN ASIA
Goldman Sachs’ private bank team came up with a well thought out strategy to achieve the objectives of creating a structure for the transition and sustainability of the family business.
Constituting trust arrangements allowed for the separation of ownership of assets and management responsibilities, as well as preserving wealth. The proposal took advantage of current market conditions to diversify the asset mix while increasing sources of income to ensure the family’s future needs are met.
Succession planning was addressed by setting of trust provisions such that the children will only be qualified to receive a trust distribution when they reach certain key business performance targets individually and collectively. Having a trust will also enable the patriarch to customise distribution plans to take care of the lifestyle, education and medical needs of the family.
The setting aside of an entrepreneurial fund rewards the children with funds for impact or angel investing.
The bank made some useful additional suggestions regarding taxation rules for foreigners active in China. It also weighed the options for a transfer of ownership of real estate assets, noting potential stamp duty and other tax implications of a transfer that make it inadvisable at present.
A range of good ideas were presented on the topic of establishing company core values and reinforcing a loyal workforce. Notably the setting up of a charitable foundation where key employees would be the first members to manage day-to-day operations of the foundation. Also, the setting up of an employee benefit trust or share options scheme.
The recommendation for setting up family office was considered, in order to take care of the overall budget of the family empire, taking into account the income, expenses and potential distribution requirements.