Profile: Asian pioneer Matthew Ginsburg

Morgan StanleyÆs head of investment banking in Asia-Pacific Matthew Ginsburg arrived in the region in the 1980s and heÆs here to stay.
He might only be 43, but Morgan StanleyÆs Matthew Ginsburg has seen a lot of change in Asia. When he arrived in the region Ronald Reagan was one-year into his second term as US President, Deng Xiaoping was leading China and talking of a ôsocialist market economyö, the Hang Seng was at 2,500 and Jardine Fleming was the regionÆs dominant investment bank.

That was 1987. In the 21 years since then, you could say thereÆs been a revolution.

But Ginsburg, born and raised in Boston and a graduate of Harvard, says he thrives on change. ôItÆs what first piqued my interest in Asia when studying in college. The dynamism, the diversity, the energy. And itÆs been unabated.ö
To be an effective investment banker, however, you canÆt be a witness or a follower. There are no prizes for reportage. The skill is to be ahead of and ready for the next trend, the next big thing. ôMaybe I was too early on the M&A (mergers & acquisitions) trend,ö he says. ôAs someone once said, itÆs the pioneers who get the arrows and the settlers who get the land. How I see it, I got both. And that probably works best in this industry.ö

Eighteen months after Ginsburg joined First Boston in New York, his career really kicked into life when he was sent to Tokyo in the late 1980s at the height of JapanÆs so-called economic miracle. There he was able to use language skills picked up at college. By 1992, after completing an MBA, he rejoined the bank and headed to Hong Kong to be part of First BostonÆs newly created three-person Asia-Pacific M&A team.

Hong Kong was a natural fit. Ginsburg had regularly travelled there from Japan and had made friends in the city. It was also his girlfriendÆs home town. They married in Hong Kong in 1994, anchoring Ginsburg even more firmly to the region.

A year later, his career path also took a significant turn when he was hired by Morgan Stanley to run the firmÆs nascent M&A department. His pioneering days continued. ôM&A [in Asia] was not the mainstream business it is today,ö notes Ginsburg. His job was to help clients understand the value-add and prove the M&A business model for Morgan Stanley.

It was a time when many Asian governments were deregulating their industries and granting new licences to the leading domestic players. These businesses were in turn looking to multinational companies as strategic investors to help fund and manage build-outs. ôIt was seeing M&A bankers in action on the other side of the table that helped them understand what we brought,ö he says.
And perhaps the M&A pioneer became settler when Ginsburg advised on the watershed domestic-to-domestic Korea deal in 2000, when Hansol.M.Com, a Korean wireless telephone company, was sold to Korea Telecom.

ôFor me, thatÆs when Asian M&A came of age. When our role was finally accepted,ö he says.

After two-years as the chief operating officer of Morgan StanleyÆs investment banking business, Ginsburg moved on to head the financial institutions group (FIG). The firm believed that FIG was poised to break out and it wanted to be ready. The region and its banks were in crisis and that always leads to opportunity. ôFor example, we saw that Korea was going to see recapitalisations and M&A, while China would be restructuring its banks,ö said Ginsburg.

The bet proved right. Korea became a second home for Ginsburg as the firm advised on a slew of high-profile billion-dollar deals, including the sale of Korea First Bank to Standard Chartered, ShinhanÆs acquisition of Chohung Bank and the sales of KoreaÆs two premier asset managers, KITC and DITC. Ginsburg had a local phone and knew all the hotel and airline staff by name, and effectively lived in Seoul during Sars.

But Korea wasnÆt the only story. In early 2000, Ginsburg believed that China would focus on restructuring and privatising its financial services sector, despite the non-performing loans problems, the regulatory environment and investor sentiment.

As Morgan Stanley invested and positioned itself for the trend, it was ChinaÆs insurance sector that moved first. The firm bookran the $800 million IPO of PICC, the property and casualty insurer, and Ping AnÆs $1.8 billion IPO, ChinaÆs first private sector financial services company to be listed. Then came the big one: the listing of China Construction Bank.

For many, this was the deal that couldnÆt be done. Most investor perceptions right up until the deal launch were negative. At best, it was expected to price around book value. But the 2005 IPO was to be a huge success, raising more than $9 billion. ôIt was one of the most gratifying deals of my career,ö says Ginsburg. ôIt was a remarkable perception shift and helped set the stage for the bank deals that came after.ö

A year later, with his mentor, Mike Berchtold, retiring to California, Ginsburg was appointed head of investment banking for Asia-Pacific. ôIt was an exciting time to be taking over. The business was changing again. Private equity û both for ourselves and our clients û was becoming of increasing importance, ChinaÆs private sector was fast emerging and we recognised the need to go it alone in India.ö For Morgan Stanley in India, this meant rebuilding their on-the-ground banking team. The firm also took the decision to enhance its presence in Australia and to start focusing on emerging economies such as Vietnam.

Despite the current market environment, Ginsburg says Morgan Stanley remains fully committed to these and further investments. ô2007 was clearly a great year, revenues took off and we built out in a lot of strategic areas.ö Ginsburg declined to give specifics, citing confidentiality.

And what of the future? Ginsburg explains that 2008 has started strongly. ôWe arenÆt immune to market forces, but we have an excellent pipeline and our commitment to private equity is paying real dividends.

We certainly see a pick-up in investment opportunities both for ourselves and alongside clients.ö Early last year the firm also added meaningfully to its risk management businesses and that is expected to perform well in this environment. ôDown markets are tough but they are also real opportunities. We are very fortunate that our firmÆs senior management really understands Asia, has spent a lot of time in the region, all the way up to and most definitely led by the example of John Mack, and they trust the team on the ground.ö

GinsburgÆs love of Asia isnÆt all business, and his family life reflects the vibrancy, pace and diversity of his chosen career and the region in which he works.

His wife, whom he met when he was 18, is from a long established Hong Kong family with maternal roots in the Philippines. His three children û all under 10 û attend bilingual schools and he is actively involved in the community. ôWe have family meals every weekend, which I love, with in-laws, grandparents and the like.

ItÆs always changing. For me a big warm Chinese family feels just like the one I grew up with in Sudbury, Massachusetts. I have never felt like an expat here, this is home.ö

This story first appeared in the March issue of FinanceAsia magazine
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