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TO star investment banker Keith Magnus, there is one key principle that determines whether a deal is worth pursuing by a client.
That is whether the deal creates value that exceeds the cost. “If the cost of creating value is higher than the value being created, I tell my clients to walk away from the transaction. We’re happy to do that.”
Mr Magnus is global partner and chief executive of independent investment bank Evercore Asia (Singapore). The key word in the firm’s descriptor is “independent”, an aspect that Mr Magnus says he is passionate about. After having helmed a number of global investment banks, joining Evercore in 2013 was an opportune moment.
“Evercore had been talking to me for a period of time. I felt the timing was right. It was an opportunity to take the ultimate challenge, to build an investment banking business from scratch. But I also wanted... to go back to basics and just look after clients’ interests. I’m very jealous about advancing clients’ interests. Clients hire bankers and advisers for that very reason.”
Since establishing its Asia office, Evercore has moved from strength to strength, with billion-dollar deals under its belt. The outlook for the future for dealmaking in Asia, says Mr Magnus, is bright even with muted economic growth. Read all about it in our Spotlight profile.
This edition is our first for 2017 and we bring you a wealth of investment insights for what is expected to be a somewhat challenging, but we hope ultimately profitable, year. In our Roundtable, experts share key themes that could help you navigate a landscape that is likely to be marked by political uncertainty and global central bank policy divergence.
John Woods of Credit Suisse, for instance, says global infrastructure equities and China equities are among his picks. On China, he says macroeconomic indicators have improved; the Producer Price Index has made gains and he is also expecting an uplift in stocks’ earnings per share.
Tuan Huynh of Deutsche Bank Wealth Management says volatility is set to be an intermittent theme and investors should keep an eyeon longer-term themes such as population ageing, millennial spending patterns and cybersecurity.
Meanwhile, on more specific assets, Schroders’ Tom Wilson shares his views on emerging markets (EM). EMs, he says, are supported by a cyclical economic recovery and “reasonably attractive valuations”. But tail risks have risen with global politics. He is watching for changes in US trade
In the fixed income space, James Cheo of Bank of Singapore says in a year of reflation, he is keeping an eye on inflation and prefers shorter-duration bonds which are less sensitive to rising inflation and interest rates. In particular he sees opportunities in the leveraged loans segment where coupons are periodically reset. He also likes emerging market bonds which still offer a relatively sizeable premium over US Treasuries. But he adds that investors will have to brace for more muted EM bond returns this year.
DBS Group Research’s Derek Tan tackles an asset close to Singapore investors’ hearts – Singapore real estate investment trusts (S-Reits). S-Reits, he says, currently trade at a forward FY17 yield of 7 percent, which represents a spread of four percentage points over the forecast rate for 10-year Singapore government bonds. His preference for real estate sectors are office, retail, industrial and hospitality.
Meanwhile, in our Philanthropy column we feature the RHT Rajan Menon Foundation, set up by the RHTLaw Taylor Wessing firm. The foundation, says RHT partner Tan Chong Huat, who is also the foundation’s chairman, aims to engage in philanthropic activities in a more focused fashion and to inspire other companies to do likewise. “One of the main tenets of our beliefs is that when we do well, we must do good,” he said.
In the Real Estate column, Knight Frank executive director Tay Kah Poh highlights opportunities and trends in the much coveted Good Class Bungalow (GCB) segment. Even withcontinued cooling measures, the GCB market is expected to remain stable, thanks to the scarcity and desirability factors.
In Lifestyle, Rahita Elias presents the delicious options available for the well heeled gourmand. Tara Loader Wilkinson showcases the M+ museum in Hong Kong for visual culture, which is expected to attract two million visitors a year. The museum benefited from the largesse of Swiss collector Uli
Sigg who gave 1,400 pieces from his collection of modern Chinese art.
We wish you a rewarding investment journey this year.