The art of leaving an investment bank in Hong Kong
You know you’ve done a good job if they send you a goodbye memo with ‘thank you’ in the subject line when you leave.
That happened to Jonathan Slone, who's standing down as chairman of Jefferies’ Asia business in Hong Kong after less than three years. Like all good junior bankers below him, Slone is leaving for private equity - except he's setting up his own private equity fund rather than joining someone else's.
He goes with the full blessings of his bosses. “Please join us in wishing Jonathan well on his next venture and his continued success,” said Rich Handler and Brian Friedman in a memo seen by eFinancialCareers. To further underline just what a good leaver Slone is, Jefferies also says it will also consider investing alongside Slone, who's not fully leaving but has been handed the title of senior adviser to the firm.
Slone only joined Jefferies from CLSA in 2019 as chair of the bank’s Asia business, but his job title was less important than the move itself. He proved something of a talent magnet: Jefferies used him to draw around 50 bankers and traders from CLSA, providing a springboard for the firm’s growth.
“Jonathan was integral in bringing everyone together, for which we are most grateful. In just three years, we have seen meaningful revenue and market share growth in our core markets across Asia-Pacific,” the memo also gushes. The bank turned in record revenues in Asia Pacific in 2020, driven by a strong performance in cash equities.
Jefferies has a top-ranked Convertible Bonds franchise, and has bolstered its trading operations in Hong Kong while its research business covers more than 800 companies in the Asia Pacific region. Jefferies said it also has “one of the top Healthcare Investment Banking franchises in the region and are quickly gaining share in Technology, Consumer and Industrials.”
The Pied Piper of Jefferies
Most big banks avoid big ‘team lifts’ of the kind Slone facilitated, but Jefferies continues to favour bulk hiring as a route to rapid expansion, usually taking advantage of disruption at rivals. In March, the bank hired a group of bankers from the financial institutions group (FIG) at Credit Suisse, which at the time was reeling from the $5.5bn loss related to the collapse of Archegos. The team included two bankers that are now part of Jefferies’ Asia team.
Jefferies particularly likes ‘Pied Piper’ recruitment strategy – where it hires a charismatic senior banker who then brings a team with him and has been using it to good effect since 2007, when the bank hired US healthcare banker Ben Lorello from UBS. Lorello, who went on to become global head of investment banking at Jefferies until his retirement this year, brought a 50-strong team with him.
The question, though, is what happens when the figurehead leaves. There has been little fallout from Lorello’s departure and likewise, it seems Jefferies has integrated the CLSA team to good effect. It probably helps that Jefferies is known to reward banker for the business they bring in, and often pays cash bonuses upfront.
Jefferies will be keen to maintain the momentum in Slone's absence. Its first big expansion in Asia came after the financial crisis, but it then trimmed headcount in 2015. It subsequently moved back into expansion mode in 2016, triggered by Barclays’ decision to close its Asian cash equities sales and research operation. Then came Slone and the land grab with the CLSA hires.
Jefferies seems to already have a strong bench for the post-Slone era. In January 2020, it hired Murray Wilson as President from Deutsche; last month it hired Chris Laskowski to head it Asia investment banking division. Laskowski joined after a brief stint at MSA Capital, a private equity and venture capital firm. Prior to that, he had a 23 year career at Citigroup, with the last decade spent in Hong Kong as head of coverage for MNCs, Local Corporates, and Financial Institutions in the corporate and investment bank.
Laskowki’s challenge will be to take Jefferies to the next level and establish it as a force in corporate finance. Jefferies is ranked eighth in US investment banking, fifth in the UK, but does not feature among the top 10 in China so far this year, according to Dealogic.
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