Citi braces for busy spell for financial sponsors deals in Asia
The bank leads on the STT GDC deal for KKR and Singtel, providing key acquisition financing
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[HONG KONG] Citigroup is bulking up its investment banking franchise that looks after financial sponsors as deal activity increases and firms seek to deploy capital.
A resurgence in mergers and acquisitions, including deals led by private equity (PE), has fuelled a boom in Japan, while India is a solid hunting ground for PE firms and Australia is off to a stronger start to the year too, according to the bank.
“Global financial sponsors are a key pillar of dealmaking,” said Ashu Khullar, Citi’s head of global asset managers. “From private equity to infrastructure to credit, alternative asset managers are once again more actively participating in big transactions.”
Asia is increasingly relevant for financial sponsors and there’s optimism about dealmaking in Europe, Khullar said, adding that the US remains the biggest market.
In Asia, Citi was lead financial adviser to KKR and Singtel on last month’s roughly US$5 billion deal for Singapore-based data centre company STT GDC. Citi also provided acquisition financing. Elsewhere, it advised Chinese appliance maker Haier Smart Home on the sale of a 49 per cent stake in its India unit to Bharti Enterprises and Warburg Pincus in December.
Citi brought in Vikram Chavali from Goldman Sachs Group last year as APAC head of global asset managers. He says consumer, health care, industrials and digital infrastructure are among the most active sectors for PE deals, with China showing signs of a recovery and Japan leading the pack.
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“Japan remains the busiest market for buyout activity,” he said. “The opportunity to deploy capital there is greater now than it’s been in years.” BLOOMBERG
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