Top Chinese banker joins private equity

Former chairman of SDB teams up with old friend to head PAG's business in the country

PUBLISHED : Monday, 25 November, 2013, 10:23am
UPDATED : Tuesday, 26 November, 2013, 1:40am

Xiao Suining is the latest top banker to move into private equity, a growing trend in the financial industry.

The former chairman of Shenzhen Development Bank - which was renamed Ping An Bank following its takeover by Ping An Insurance - recently joined PAG (formerly Pacific Alliance Group) as China chairman and partner in charge of the company's private equity business, people familiar with the matter said.

In Hong Kong, the private equity world is a hot new destination for high-flying investment bankers. The 2008 financial crisis, which cost tens of thousands of banking jobs, forced many bankers to rethink their careers with the big global banks at the heart of the crisis.

On the mainland, it is uncommon for top executives of leading domestic commercial banks to join the private equity world, since most would rather opt for senior jobs in the government or enjoy a comfortable retirement after decades of service.

[Both men have] deep knowledge of how things can really be done in the country

Xiao's move may inspire other bankers pondering their career paths, industry sources said.

An internal PAG memorandum to staff, seen by the South China Morning Post, said: "Suining will be involved not only in sourcing and executing investments on behalf of PAG Capital in China but will also bring important relationships and a senior presence for PAG in China across our strategies."

Xiao may not be well known in private equity circles, but he is no stranger to powerful dealmakers in Asia, including Shan Weijian, the chairman and chief executive of PAG.

Shan is a former senior partner at US-based TPG Capital, one of the world's largest private equity companies.

Shan was the key person behind TPG's major equity investment in SDB in 2004, which made the bank the first on the mainland to be controlled by a foreign investor.

Several years later, the investment proved to be one of TPG's most profitable private equity deals when it sold its stake in SDB to Ping An.

In 2010, Shan left TPG to head PAG, in which he is said to have a major equity stake. In the same year, Xiao stepped down as president of SDB and became its chairman, a move widely seen as preparing for full control of SDB by Ping An, which then appointed its own senior executives to the bank.

Before Xiao joined SDB, he spent 17 years at Shanghai-based Bank of Communications in senior roles including as general manager of the bank's operations in Shenzhen. At SDB, he was one of the best-paid bankers on the mainland.

A person close to Shan, a former university professor, said of the two men: "They have known each other very well since their days at SDB, and it's great to see they can work together again, as both of them are considered real experts on China, with deep knowledge of how things can really be done in the country."