| HONG KONG
HONG KONG Boutique investment bank China Renaissance, which has advised on some of China's top technology deals such as the listing of e-commerce firm JD.com (JD.O) and the formation of ride-hailing company Didi Chuxing, is making a big push to expand at home and in the United States.
The Beijing-based firm launched a domestic securities joint venture on Tuesday to tap the rapidly growing advisory and stock broking businesses in mainland China.
It also plans to triple its U.S. headcount in the next two to three years from the current 15 in an attempt to capture a bigger chunk of deals between the world's two largest economies.
China Renaissance's growth plans come even as global and regional financial firms such as Goldman Sachs (GS.N), Standard Chartered (STAN.L) and Bank of America (BAC.N) are cutting back in Asia Pacific due to a sharp decline in deal activity in the region.
"Overall, the investment banking business in China is still at the early stage - there's a lot of room for growth," the bank's founder and CEO Bao Fan told Reuters in an interview.
Set up in 2004, China Renaissance has built a 300-strong team, excluding the new joint venture, and become a major player in China's buoyant technology sector.
It has helped several fast-growing companies, including JD.com and ZTO Express (ZTO.N), go public in New York as well as advised on high-profile transactions such as the merger of online deals and food delivery duo Meituan and Dianping last year and the combination that formed China's largest ride-hailing company Didi Chuxing.
The launch of the new venture, Huajing Securities, comes amid fierce competition in China's onshore capital markets, which is dominated by large firms such as CITIC Securities (600030.SS) (6030.HK) and Haitong Securities (600837.SS) (6837.HK).
China Renaissance is betting its focus on "new economy" companies that are becoming more and more relevant in China will give it an advantage over competitors, Bao said.
The firm holds a controlling 49 percent stake in Huajing. Its two partners in the venture are Beijing Enlight Media (300251.SZ), with a 46.1 percent stake, and Wuxi Qunxing Equity Investment Management, which owns 4.9 percent.
In preparation for the launch, Huajing hired about 150 bankers and other financial professionals who had worked previously for local rivals, people familiar with the hirings told Reuters.
It is only the second joint venture that has won regulatory approval under a trade agreement between Hong Kong and mainland China - the Closer Economic Partnership Arrangement (CEPA), after Shengang Securities.
In the United States, China Renaissance aims to expand its investment banking, equity underwriting and asset management businesses, Bao said.
Outbound M&A volume from China has more than doubled so far this year to nearly $196 billion, a record, according to Thomson Reuters data. The United States accounts for nearly 30 percent of these deals, making it the most targeted country.
"In terms of cross-border deal flows, outside China, the most important strategic market for us is the U.S. Especially in technology and healthcare, there are a lot of cross-border aspects between the two markets," he said.
But Bao was clear the bank will retain its boutique character and focus on niche areas.
"We'd like to be the little giant in the space we focus on, but we don't really want to be a global investment bank doing everything. That's certainly not our ambition," he said.
(Reporting by Julie Zhu and Elzio Barreto; Editing by Edwina Gibbs and Muralikumar Anantharaman)