Ant Financial filed to list its shares in Hong Kong and Shanghai, this could be among the biggest in history. The dual IPO will provide, no doubt, a lot of work to bankers who are working on the deal. What other opportunities will this deal bring to financial services professionals?
Bonuses
Ant Financial said it will offer at least 10 per cent of its shares in a dual offering in Hong Kong and Shanghai at a valuation of between $200bn and $300bn. However, people familiar with the plans say it could offer up to 15 per cent. At the top end of the range, the listing could even net up to $450m in Hong Kong — a record for Asian deals outside Japan. And this will provide a welcome boost for the bonuses of Hong Kong-based bankers who are working on the deal. According to former Head of Asia Equity Capital Markets at Nomura, the highest bonuses he received were in the years worked on large, visible and prestigious transactions. Which this dual listing is ticking all the boxes.
However, no bank can “afford to turn its nose up to such a lucrative deal even if it’s just a global co-ordinator or joint lead manager”, says Abimanu Jeyakumar, head of Selby Jennings for North Asia. Ant Financial could raise up to $30bn, making it the largest IPO in history. “The deal will be a much-needed addition to the 2020 bonus pool in Hong Kong,” adds Abimanu Jeyakumar.
Headcounts
“This deal will not specifically increase hiring in ECM right now," says Abimanu Jeyakumar. "Although having Ant Financial in the pipeline has not triggered more recruitment at the banks involved in the Hong Kong leg yet, I believe banks will look to bolster their teams longer term as they will have more fee income. And the Ant IPO will hopefully entice more private companies looking to list."
The IPO pipeline in Hong Kong is particularly heavy, with a number of ‘homecoming’ listings by Chinese companies that are currently quoted in other jurisdictions, particularly in the US. ECM teams will generally be kept busy going forward, and in some cases, there may be additions to existing teams.
IPO execution involves investment bankers from a variety of teams. Which including not just ECM, but also country and industry/sector coverage on the corporate finance side. Moreover, support functions (legal, compliance), and equity research and sales on the securities side of the business. Some bankers, particularly with the tech sector or industry expertise may have been relocated for the deal from other jurisdiction.
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