China Renaissance Securities is stepping up its equity capabilities, moving closer to becoming a full-service investment bank.
Bao Fan, chairman and chief executive of the bank, told FinanceAsia how it would achieve that target.
China Renaissance ranks second on the underwriter league table of Chinese companies’ US listings this year, based on Dealogic data.
However, the bank has been regarded as a boutique investment bank specialising in advisory and consultant work in the financing of TMT companies due to a lack of strong global distribution and sales capacity.
“Our equity business is at the very early stage; as a firm our strength has historically been the investment banking business,” Bao admitted. "As we move up the ladder, we’re trying to build up our overall investment banking capabilities, we need to strengthen our equity distribution business as well."
A recent hire implies the bank’s determination to change such perceptions.
China Renaissance on Monday named Gloria Lu head of equities, a newly created role to coordinate various functions in the bank’s equities businesses, including equity sales, research, trading and syndicate, according to Bao.
Lu joined the bank on Monday from China Life Franklin Asset Management, the first overseas asset management company established by a PRC state-owned insurer.
She most recently acted as deputy chief executive of the asset management firm and led the investment, research, product development, marketing and distribution as well as administrative duties.
Prior to China Life Franklin, Lu worked at Blackrock Asset, GDC Holdings, Deutsche Bank and Nomura. Lu is based in Hong Kong and reports directly to Bao.
“The fact that she [Lu] has worked with the buy-side could make her even more effective because, at the end of the day, our customers, our clients [for the equity business] are buy-side investors,” said Bao.
Lu will lead a team of around 10 people working on separate functions of equities to strengthen the bank’s equity platforms in Hong Kong and the US, a source close to the company told FinanceAsia earlier. The bank will hire more staff for the team, said the source.
Bao hopes Lu will help China Renaissance’s equity distribution business to be as strong as its investment banking business.
The hire of Lu (pictured left) further underlines the bank’s ambition to set up an asset management business in the longer-term. “Going forward, we would try to leverage Lu’s experience to look at opportunities on the asset management side as well, a business area we are going to be looking at, but not in the near future,” said Bao.
The bank has local access to build wealth-management business to cater to the increasing demands from China’s millionaires.
China had 157 billionaires in 2013, second only to the US. These nouveau riche have accumulated a total wealth of $384 billion, according to UBS, a private banker to the wealthy. UBS said that 89% of Chinese billionaires are self-made and 10% of their assets are liquid.
Bao said China Renaissance’s businesses are not capital-heavy so there was no need for the bank to seek a public listing. “But one day if we need the capital to grow out business, listing is one thing we could consider.”