UBS Bulks Up China Unit With Senior Hires After 51% Stake

(Bloomberg) -- UBS Group AG is beefing up the ranks of senior executives at its securities joint venture in China after taking majority control late last year, hiring five managing directors for the investment banking business, said a person with knowledge of the matter.

Shen Dehua, most recently investment banking head of HSBC Holdings Plc’s Qianhai securities venture, joined UBS Securities Co. as vice chairman for Asia, people with knowledge of the matter said, asking not to be named has the appointment hasn’t been announced. The UBS joint venture also hired Eric Zhang from a private equity arm of China Merchants Bank Co. to run its Shanghai office, according to the people.

UBS and some of its biggest competitors are ramping up expansion in China after regulators allowed them to take 51 percent stakes in local securities ventures. Majority control gives international firms more influence over strategy, just as officials add new trading venues and loosen a range of regulatory restrictions in a bid to foster a more market-based system.

A UBS spokesman in Hong Kong declined to comment.

UBS Securities is in talks to hire three more managing directors for its investment banking business, one of the people said, declining to name them as the discussions are at an early stage. Once those hires are completed, the business will have about a dozen employees at that level, according to the person.

While China’s economy is cooling and competition among securities firms is fierce, UBS executives predict cross-border acquisitions will increase and more companies will go public on a new technology venue in Shanghai, the people said. Those are two areas where foreign investment banks are betting their experience and global footprint give them an edge.

UBS raised its stake in UBS Securities to 51 percent in December. Beijing Guoxiang Asset Management Co. owns 33 percent of the joint venture, while two other Chinese shareholders hold the rest. As of December, the venture had a total of 109 investment banking staff, according to a company filing.

Nomura Holdings Inc. and JPMorgan Chase & Co. have also received approval to take majority stakes in their local securities joint ventures, while Morgan Stanley and Credit Suisse Group AG are working toward obtaining 51 percent holdings. With overseas firms taking charge of onshore businesses, the number of investment-banking jobs in China could jump by about 25 percent from 2017 through this year, according to recruitment agency Kelly Services.

The estimated need for additional manpower means overseas firms might struggle to attract qualified candidates, said Tony Wilkey, senior consultant at recruitment firm Robert Walters.

©2019 Bloomberg L.P.