Citic Securities, CLSA Combine Global Investment Banking Operations in Joint Venture -- Update

By Nisha Gopalan 

Citic Securities Co., China's biggest brokerage firm, launched its global investment-banking platform Monday, combining its bankers with those from CLSA, the Asian firm it acquired two years ago.

The new venture, Citic CLSA Securities, also established offices in London and Sydney.

Citic CLSA integrates investment-banking operations at both firms and has more than 100 people on staff across 10 cities globally. It was set up "to capitalize on increasing outbound Chinese investment and foreign investors seeking access to China," the two firms said in a statement.

Last year, Citic Securities moved its equities underwriting business outside China into CLSA, but the Citic CLSA outfit will hold all investment-banking operations outside China at the two firms.

Citic Securities, China's biggest brokerage by revenue, bought CLSA from France's Crédit Agricole SA in July 2013.

Monday's launch creates a footprint that is likely one of the biggest overseas ones by a Chinese investment bank. Citic CLSA has operations in banking and underwriting bond and share sales, as well as advising on mergers, in Hong Kong, Bangkok, Manila, Mumbai and Singapore as well as Colombo, Sri Lanka; Jakarta, Indonesia; and Kuala Lumpur, Malaysia; in addition to the new staff members in Sydney and London. While CLSA has always had traders in Sydney, Citic CLSA will have investment bankers in the Australian city as well as in London, focused mainly on M&A.

Andrew Low, who was appointed to lead Citic CLSA, was formerly chief operating officer of Macquarie Capital, the Australian bank's investment-banking arm.

"With this new business, we are better positioned for the rising amount of Chinese investment into Europe, which reached US$18 billion this year alone and continues to grow," said Mr. Low, who joined CLSA as head of international investment banking late last year.

"We're seeing a lot of our clients in China interested in Europe and are also getting approaches by European companies looking for a buyer or investor and believing that the natural buyer may be a Chinese one," he said.

Citic Securities' acquisition of Asia-focused CLSA was one of the biggest overseas purchases by a Chinese securities firm. A more ambitious attempt by Citic Securities and Bear Stearns to buy stakes in each other in 2007 was never completed because the Wall Street bank collapsed the following year during the global financial crisis, before Chinese regulators had the opportunity to approve the deal.

Citic Securities is listed in Hong Kong and Shanghai but is around 17% owned by Chinese conglomerate Citic Ltd., which in turn is owned by the Chinese government.

Write to Nisha Gopalan at [e-mail]

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