Nomura has hired Eng Chien Chan to lead a new group that will sell risk solutions to companies across the region. Chan joins from Credit Suisse where he was head of fixed-income sales for Southeast Asia and India. His new title is head of corporate sales and risk solutions.
"Eng Chien is one of the most experienced people in corporate risk management and will help us to strengthen product delivery to clients through the integration under one umbrella of both private and public corporate coverage," said Patrick Schmitz-Morkramer, head of investment banking, Asia ex-Japan.
In the past, corporate sales and risk solutions were separate groups, but under Chan they will become an integrated team specialising in "event-driven and tactical risk management strategies", such as providing Nomura's investment banking clients with hedges that help them to control foreign exchange risks during the lifetime of an acquisition.
"We underwrite closing risks, which helps our private sponsor clients hedge FX and interest rate-related exposures prior to the closing of the transaction," said Schmitz-Morkramer.
Nomura did just such a trade for KKR, a buyout fund, when it agreed to pay $1.8 billion for Korea's Oriental Brewery in May last year. The Japanese bank was advising KKR on the acquisition and offered to provide protection against adverse movements in the value of the won against the dollar during the uncertain period between agreeing a price and sealing the deal. If the acquisition had failed, the hedge would have stayed on Nomura's books, giving KKR less to worry about.
In the wake of the financial crisis, these types of solutions make it easier for companies to close deals in conditions that are already very challenging, but they are not easy for banks to provide. Deal-contingent trades can have very uncertain tenors and require a bank to be very comfortable with its client. They also need bankers from different divisions to trust each other, which is no small feat.
"The more complex event-driven business has only been around for four or five years and we didn't have the talent before to take a really holistic approach to the business," said Schmitz-Morkramer. "Now that we do, this integration will allow us to have much better client connectivity. Our strength is that we work very well across divisions."
Chan will manage a team of 30 professionals, covering clients across Southeast Asia, Hong Kong, China, Taiwan, Korea and Australia. And Nomura already has more hires in the pipeline as it makes a push to market this new platform to its corporate clients.