Ex-Morgan Stanley bankers make a splash in HK as new boutique firm adds Ant Group, Xpeng to list of clients

28-Oct-2020 Intellasia | South China Morning Post | 7:06 AM Print This Post

A new investment banking boutique in Hong Kong is already landing big clients, including fintech giant Ant Group and electric vehicle maker Xpeng, proving it is possible to land with a splash in a crowded market of financial advisers from traditional powerhouses.

Ampere Partners was launched last year by two former senior Morgan Stanley bankers, Crawford Jamieson and Daniel Wetstein, and has since added top-notch companies including Alibaba Group Holding, Ant Group, and Xpeng among its clients. The firm offers corporate finance advice to companies and financial sponsors in the technology, health care and financial services sectors, backed by experience in completing $500 billion worth of deals between them since late 1990s.

Ampere is rustling up business at a time when the value of banks’ research is falling and investment banking fees on initial public offerings (IPOs) are thinning in Hong Kong. Chinese brokers have waded into the market during the past decade to use the financial hub as a launch pad for their international expansion, heightening competition for equity and debt capital raising fees in the process. Ampere said they are not exactly aiming for the same pie.

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“Our job is not to compete; it’s to complement,” co-founder Jamieson said in an interview. “I’m not sure everyone will see it that way. This is a team sport.”

In Asia, investment banking business tends to be more capital-markets focused than in the more mature markets of the US and Europe where boutique banks have more M&A work and boutique advisory firms can count on a stream of fees even in niche areas such as convertible bonds.

Wetstein and Jamieson helped e-commerce giant Alibaba on its secondary listing in Hong Kong in November. Some aspects of this landmark deal were used as a template for other large US-listed technology firms that followed in the pioneering footsteps of the Hangzhou-based group.

Capital-intensive electric vehicle makers start-ups have been tapping investors this year from Shanghai to New York. Ampere landed a mandate to advise Xpeng on its $900 million pre-IPO funding, followed by its $1.7 billion New York IPO in August, the largest ever by a Chinese electric car maker.

Chinese fintech giant Ant Group named Ampere as its financial adviser in its listing prospectus on what looks likely to be the world’s largest IPO in the making. In the biotech space, Ampere also advised Burning Rock on its $256 million IPO in June.

The name Ampere, which is a unit of electrical current, speaks to the firm’s hi-tech focus. The founders also chose the name as it will be high up in alphabetically ordered lists and the domain name was still available. Wetstein said the best advice they had on branding was not to name the firm after themselves as they hope to bring in other partners. The team is nine-strong and Ampere is looking to hire more next year.

“The industry is changing in terms of tenure, experience and capabilities of broader teams especially in Asia,” said Jamieson who hopes to bring more “horsepower” to the issuers’ side of the negotiating table.

Jamieson began his career at Bear Stearns in Hong Kong in 1994 and subsequently joined Morgan Stanley in 1997. He started the Asia-Pacific technology investment banking business in 1999 and later served as co-head of equity capital markets for the Asia-Pacific region, co-head of global capital markets for Asia-Pacific and finally vice-chair of global capital markets.

Jamieson has advised on more than 200 capital markets, private and strategic transactions valued at more than $300 billion. Jamieson earned a B.A. in biochemistry from Harvard University and an MBA from Harvard Business School.

Wetstein started at Morgan Stanley in equity capital markets in 1996. He led Morgan Stanley’s Asia-Pacific technology investment banking business from 2006 to 2019. He has advised on more than 100 capital markets, private and strategic transactions for clients in the technology industry valued at more than $200 billion. He earned a B.A. in Business Administration and Management from Universität Rostock.

What they do not do is pre-packaged deals where advisers are just confirming the price of the transaction with investors. “We’re not for everyone,” said Jamieson.

The duo said that they spotted a market opportunity for experienced advisers to sit on the issuer’s side of the negotiating table during fundraising. They aim to work with both companies and financial sponsors on capital raising as well as mergers and acquisitions.

Asian capital markets have developed rapidly in the past couple of decades, and while many deals can now take a cookie-cutter approach, there is still a need for creativity and innovation in the more complex transactions undertaken by Asia’s fast-growing companies.

Based on its short-track record, Ampere tends to get involved early on in the process and helps draw the road map for the deal.

While boutique advisers, such as Rothschild, have focused on playing referee for the ever-expanding syndicate of banks in Hong Kong selling IPOs, Ampere sees its role more as getting hands-on, crafting listing prospectuses and the equity story for investors, drafting marketing materials, as well as helping orchestrate the sales process.

Looking ahead, Ampere sees a healthy pipeline of more capital raising during the rest of the year, supported by abundant liquidity in markets.

“There’s going to be a lot more issuance. Those US-listed Chinese companies that are not going private will come to Hong Kong. Why wouldn’t you?” said Wetstein. “Private market activity came off two years ago, and it will be lower again this year. So huge amounts of money is behind technology companies looking for a route into public markets,” he added.

To be sure there could be market volatility around the US election. “The presidential election could be a black swan event,” said Jamieson.

This uncertainty in stock markets could turn out to be positive for big IPOs by companies with strong growth prospects.

“People aren’t sure how much outperformance is left in markets, so being part of large transactions they believe in is particularly important as they try to generate alpha,” said Jamieson.

While co-hosting Ant’s IPO is a boost for Hong Kong, the city’s exchange has some way to go before it can match New York’s speed and efficiency on processes such as the settlement cycle.

“Hong Kong’s ambitions are way ahead of their technical capability, maybe someday they’ll fix,” said Jamieson.



Category: Hong Kong

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