why-syndicated-investing-is-the-new-big-thing

Why 'syndicated investing' is the new big thing

Forget private equity. Chinese entrepreneurs, investment banks and hedge funds reckon the hottest thing in Asian finance is 'syndicated investing'. We reprint FinanceAsia magazine's April cover story that tells you all about the new trend.

Steven Irvine

May 08, 2007

In the old days banks lent money and out of this grew a business called syndicated lending. Today thereÆs a new phenomenon. Investment banks are now investing in Asian companies û side by side with hedge funds û in what might be termed æsyndicated investingÆ.

Take the recent transaction involving Chinese property firm, Skyfame Realty. The $200 million convertible bond saw Merrill Lynch lead the deal and also buy $70 million of the bonds. It syndicated the remainder to six hedge funds. Merrill, alongside the hedge funds, evidently took a very strong view on SkyfameÆs credit and equity story. The result instead of just being paid an increasingly commoditised fee for lead managing the convertible,...

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Disruption