Steven Barg has resigned as head of global capital markets for Asia at UBS and will be joining Goldman Sachs as co-head of equity capital markets for Asia ex-Japan, sources said at the end of last week.
In his new role, Barg will work alongside Jonathan Penkin who until now has been sole head of ECM at Goldman. Barg will continue to be based in Hong Kong and is expected to start his new job in about three months, following the customary gardening leave.
As head of GCM at UBS, Barg was responsible for both ECM and the debt capital markets business. However, he was always more of an ECM banker, having worked in that part of the industry since 1996, so the fact that he is choosing to give up the DCM side of the business as moves on to a new challenge is perhaps not too surprising. He was appointed head of GCM for the region in May 2008 when his predecessor, Matthew Koder, transferred to London to become global head of GCM. Before that, Barg was head of Asia ECM.
Barg's departure comes only two weeks after UBS lost its head of Asia ECM. As reported by FinanceAsia, Mark Williams, who had been with the Swiss bank for 15 years, has left the firm to join Nomura as head of ECM for Asia ex-Japan. The gap created by Williams was filled within a few days by moving Stuart Mackay into a new role as head of ECM origination for Asia excluding China, while Sam Kendall will return from London to replace Mackay as head of equity syndicate for Asia.
UBS has made no comment yet on who may replace Barg, who resigned on Wednesday last week, but it is widely expected that it will again tap the deep bench of bankers within the firm. Aside from Mackay and Kendall, who were both to report directly to Barg in their new roles, the positions immediately below Barg also include Joseph Chee, who is head of China GCM, and Guy Wylie, who in February was appointed head of an expanded Asia DCM platform that includes investment-grade and high-yield bonds, special-situation finance, leveraged finance, ratings advisory and corporate derivatives.
For now, Mackay, Kendall, Chee and Wylie will all report to Koder in London.
A source noted that part of Barg's legacy is his ability to build a well-functioning team, both through new hires and internal transfers and promotions, and he leaves behind him a strong line-up of bankers. "It is of course disappointing when people leave, but the UBS franchise is not about one person and the everyday running of the business won't be affected by his departure," the source said.
While this has indeed proven to be the case in years past, the loss of two key bankers in such a short time is bound to leave a bit of a gap.
Barg, who is a managing director, first joined UBS in 1985, but in 2000 left to join Donaldson, Lufkin & Jenrette (DLJ), which shortly afterwards was acquired by Credit Suisse. Barg stayed with Credit Suisse until 2004 when he decided to return to UBS. In 2006 he transferred to Asia to become head of ECM for the region.
Meanwhile, the introduction of a co-head of ECM at Goldman seems to be a reflection of the greater workload in this division as the primary equity markets continue to pick up pace after the recent financial crisis. The fact that Goldman is hiring from UBS also suggests that the firm may be looking to broaden the type of ECM business that it does. In recent years, the US bank has been focusing primarily on large market-defining transactions, as well as deals for large repeat clients. It has combined this with deals for up-and-coming mid-sized firms -- often companies that are leaders in their industry or that Goldman's private equity arm has already invested in. By comparison, UBS does equity deals for a wide range of firms and in most geographies across Asia, and has been in the top two in the Dealogic league table for Asia ECM with regard to volumes for the past five years. It is also routinely one of the busiest banks in terms of number of deals.
In 2009, UBS helped arrange 59 deals compared with Goldman's 36. However, in volume terms the US bank was not as far behind, ranking fourth overall with $11.6 billion worth of deal credits. UBS ranked number one with $14.4 billion followed by Morgan Stanley and China International Capital Corp. The last time Goldman ranked in the top two was in 2007 when it finished first.
However, the hiring of Barg comes as Goldman is in fact at the top of the Asia equity league table year-to-date with $5.4 billion of league table credits, followed by UBS with $4.9 billion. Goldman, which appears to have a lot of positive momentum at the moment, has climbed to this position on the back of deals such as: the $1.25 billion sell-down by Newbridge in Ping An Insurance (Group); a $601 million top-up placement for Cosco Pacific; and the $4.4 billion IPO for Samsung Life in Korea. It is also mandated, together with five other banks, on the H-share portion of Agricultural Bank of China's upcoming IPO which, including the A-share tranche, may attempt to raise as much as $30 billion. UBS, notably, is not mandated for that transaction.
Like Penkin, Barg will report to Dan Dees, who is head of Goldman's Asia financing group.