Online Investment Banks For Exceptional Ant IPO Salary

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Wall Street banks, including Citigroup, JPMorgan, and Morgan Stanley, are set to share at least $ 300 million in fees from Chinese payments firm Ant Group’s hit-and-run double list, in what will likely be the biggest windfall in a decade for bankers at Asia’s largest financial firm. center.

Ant has said he will offer at least 10% of his shares in a dual bid in Hong Kong and Shanghai at a value of between $ 200 billion and $ 300 billion. People familiar with the plans say it could offer up to 15 percent. At the high end, the listing could even fetch up to $ 450 million in Hong Kong – a record for Asian transactions outside of Japan.

Ant Group’s IPO fees will be “huge,” said John Mullally, director of Hong Kong-based Robert Walters financial recruiting group. “People who run banks in Hong Kong are hoping this is a harbinger of the city’s progress, especially with more Chinese companies choosing it over the United States,” Mr. Mullally.

The fees will likely be 1.5% of the size of the IPO – the midpoint of the typical Hong Kong range according to bankers and lawyers. Their distribution will depend on how the supply is split between Hong Kong and Shanghai and the final size of the deal.

The Ant show is set to deliver the largest pool of fees for an Asian deal outside of Japan since the $ 408 million earned in AIA Group’s $ 20.5 billion list in Hong Kong in 2010, according to Dealogic data.

Citi, JPMorgan and Morgan Stanley declined to comment on expected fee income from the IPO. China International Capital Corporation – also sponsor of the transaction – did not respond to a request for comment.

Ant’s market debut is expected as early as October, according to people familiar with the payment group’s plans. A $ 20 billion fundraiser would roughly triple the stock market’s total of $ 9.5 billion for the year so far, and push the total by $ 4 billion beyond the total for 2019. .

The expected windfall for the major investment banks listed on the Ant Group follows a drop in transaction volumes and fees in 2019. In response to this slowdown, Morgan Stanley reduced its bank bonus pool. 2019 investment of around 9 percent in Asia, while Citi the company reduced its pool by around 6 percent.

Yet despite simmering hostility between Washington and Beijing this year, Wall Street banks earned more than $ 410 million in fees on Chinese listings in New York and Hong Kong in 2020, up nearly one quarter compared to a year ago.

“There are going to be a lot of offers [this year] with everyone sitting on a big pipeline, ”said Philippe Espinasse, consultant and former head of equity markets at Nomura.

Mr. Espinasse added that Hong Kong’s stock offerings “increasingly see Chinese banks in first place,” pushing their international peers as mainland financial groups expand their presence in the city. This month, a Financial Times analysis found that mainland investment bankers will soon outnumber their global rivals in Hong Kong.

Mr Mullally warned that Ant’s IPO was more of a “welcome boost” for the city’s bankers, who are still under pressure to minimize costs for Chinese corporate clients.

“The trend in China among Chinese companies is to put pressure on bankers on fees,” he said. “Ant’s size mitigates that, but it won’t be a game-changer for bonuses and fees in general.”

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