With U.S. Busy, China Is Romping With Neighbors

With U.S. Busy, China Is Romping With Neighbors
By JANE PERLEZ
http://www.nytimes.com/2003/12/03/international/asia/03LETT.html

JAKARTA, Indonesia, Dec. 2 — When Citibank was casting around for a brand name speaker at its annual retreat here, the bank spurned the usual Western investors. Instead, Citibank chose the Chinese ambassador, Lu Shumin, one of a new generation of diplomats from Beijing who speak flawless English and play a mean game of golf.

The envoy's presentation was relentlessly upbeat: what Southeast Asia sells, China buys. Oil, natural gas and aluminum to build bigger bridges, taller buildings, faster railroads to serve the country's flourishing cities, like Shanghai, which is beginning to make New York City look like a small town. Palm oil for frying all that food for the swelling middle class, even eggs from faraway New Zealand on the region's southern periphery.

China's buying spree and voracious markets provide the underpinning, he said, for the peaceful coexistence that everyone wants.

More Fallout in the Mutual Fund Industry

More Fallout in the Mutual Fund Industry
By RIVA ATLAS and DAVID BARBOZA
http://www.nytimes.com/2003/12/03/business/03fund.html

Richard S. Strong gave up control yesterday of the mutual fund company he founded, and regulators filed suits accusing the Invesco Funds Group and its chief executive of securities fraud in the rapidly expanding investigation of improper trading.

Mr. Strong is under tremendous pressure from the New York attorney general, Eliot Spitzer, who has said that he intends to file suit against Mr. Strong for trading in and out of funds for his own profit. Mr. Strong, 61, resigned yesterday as chairman and chief executive of Strong Financial, the fund management company, having stepped down last month as chairman of the board at Strong Mutual Funds.

China Regrets Decision by U.S. to Limit Imports

China Regrets Decision by U.S. to Limit Imports
By KEITH BRADSHER
http://www.nytimes.com/2003/11/19/international/asia/19CND-CHIN.html

HONG KONG, Nov. 19 — The Chinese government gave a temperate response today to the Bush administration's decision to limit the growth of imports of certain Chinese fabrics and garments, contending that the move violated free trade principles.

The Commerce Ministry in Beijing issued a statement expressing its regret and its opposition to Washington's action, but stopped short of threatening retaliation against American exports to China or promising an appeal to the World Trade Organization.

China Set to Act on Fuel Economy

China Set to Act on Fuel Economy
By KEITH BRADSHER
http://www.nytimes.com/2003/11/18/business/worldbusiness/18AUTO.html

GUANGZHOU, China, Nov. 17 — The Chinese government is preparing to impose minimum fuel economy standards on new cars for the first time, and the rules will be significantly more stringent than those in the United States, according to Chinese experts involved in drafting them.

The new standards are intended both to save energy and to force automakers to introduce the latest hybrid engines and other technology in China, in hopes of easing the nation's swiftly rising dependence on oil imports from volatile countries in the Middle East.

They are the latest and most ambitious in a series of steps to regulate China's rapidly growing auto industry, after moves earlier this year to require that air bags be provided for both front-seat occupants in most new vehicles and that new family vehicles sold in major cities meet air pollution standards nearly as strict as those in Western Europe and the United States.

China Lowers the Wall for U.S. Cars and Parts

China Lowers the Wall for U.S. Cars and Parts
By DANNY HAKIM and KEITH BRADSHER
http://www.nytimes.com/2003/11/13/business/worldbusiness/13auto.html

DETROIT, Nov. 12 - In a move to quell criticism of its huge trade surplus with the United States, China agreed to let the Big Three automakers send it about 15,000 cars and trucks over the next couple of years as well as more than $1 billion in parts from General Motors, the companies said Wednesday.

China also said that it would allow G.M. to import cars directly, without using a local partner, and G.M. said it was moving into the auto lending business in China.

The deals with G.M., the Ford Motor Company and the Chrysler Group were among a flurry of import allowances, including large wheat and aircraft purchases, that were expected from China ahead of Prime Minister Wen Jiabao's visit to the United States, scheduled for early December.

47 Currency Traders Are Indicted on Fraud Charges

47 Currency Traders Are Indicted on Fraud Charges
By KENNETH N. GILPIN
http://www.nytimes.com/2003/11/19/business/19CND-DOLL.html

Forty-seven currency traders were indicted today on charges of conspiracy, wire fraud, money laundering and securities fraud for what prosecutors said were wide-ranging crimes involving nearly every level of foreign-exchange trading.

The charges, which involve employees at low-level boiler-room operations with fancy-sounding names and at some of the world's largest financial institutions, capped an 18-month investigation conducted by undercover agents from the Federal Bureau of Investigation that was code-named "Operation Wooden Nickel."

LVMH Battles Against Morgan Stanley in Court

LVMH Battles Against Morgan Stanley in Court
By JOHN TAGLIABUE
http://www.nytimes.com/2003/11/18/business/worldbusiness/18lvmh.html

PARIS, Nov. 17 -Echoes of a four-year battle for the Gucci Group resounded here on Monday as a commercial court heard opening arguments in a lawsuit that pits LVMH Moët Hennessy Louis Vuitton, the luxury goods group that lost the struggle for control of Gucci, against Morgan Stanley, Gucci's investment banker.

LVMH sued Morgan Stanley a year ago seeking 100 million euros ($118 million) in damages, accusing the bank of improperly manipulating its stock research to benefit its investment banking clients by issuing unusually negative assessments of rival companies.

Schloss to depart CSFB

[ironically perhaps, as the Deal notices, "Three years after Garrett Moran left CSFB, his replacement as head of private equity Lawrence Schloss now is leaving."]

Schloss to depart CSFB
Movers & Shakers: Week of Nov. 17, 2003
by Dennis Fitzgerald and Heidi Moore Posted 11:04 EST, 14, Nov 2003
http://www.thedeal.com/

A top private equity banker who helped build DLJ Merchant Banking Partners into a powerhouse is departing Credit Suisse First Boston. Lawrence "Larry" Schloss plans to step down from his job as global head of private equity this spring to explore opportunities, the firm said in an internal announcement last week. CSFB insiders say Schloss, 49, had been thinking about leaving for some time. Tensions between Schloss and Thompson Dean, CSFB's head of leveraged corporate private equity, have been well known on Wall Street.

Possibilities for Schloss include starting a private equity firm of his own or bringing his expertise to an existing firm. "We wish Larry the best, and would look forward to the opportunity to invest with him, should he launch a new private equity investment business in the future," says CSFB CEO John Mack in the announcement Nov. 12.

Goldman, BofA cutting bankers

Goldman, BofA cutting bankers
by Heidi Moore Posted 04:00 EST, 7, Nov 2003
http://www.thedeal.com/NASApp/cs/ContentServer?pagename=hpa&c=TDDArticle&cid=1068053450546

Just as things seem to be looking up for investment bankers, there is one more hurdle to jump: year-end performance reviews. And this year, staff cuts are coming with them.

Goldman, Sachs & Co. is laying off at least 30 bankers, sources said. The cuts, which are all based on performance, involve mostly managing directors and vice presidents, including some who were only months away from being promoted to managing directors, sources said. A Goldman spokeswoman declined to comment.

Banc of America Securities LLC, meanwhile, is in the process of letting go 100 bankers from its global corporate and investment bank. The cuts, which a BofA spokeswoman said represents 1.5% of GCIB's total staff, includes positions in everything from research to high-yield to capital markets to investment banking.

The layoffs are startling since many bankers thought the coast was clear after three years of aggressive cost cutting. After wielding the ax for months, many Wall Street firms were finally able to post healthy profits in the most recent quarter.

Sprout Group cuts back fund

[Sprout was DLJ's VC division...]

Sprout Group cuts back fund
by Katherine Goncharoff Posted 04:58 EST, 3, Nov 2003
http://www.thedeal.com/

Sprout Group of New York, a venture capital firm affiliated with Credit Suisse First Boston, announced on Monday, Nov. 3, it is slashing its $1.44 billion Sprout IX fund by $360 million, or 25%, reducing the capital managed by the fund to $1.08 billion.

CSFB and Sprout Group also announced the spinout of Sprout's healthcare-focused investment unit into a new entity, Sprout Healthcare Ventures. SHV will manage the existing Sprout Group healthcare portfolio and will be managed by the former Sprout Group healthcare investment team, including general partners Philippe Chambon, Jeani Delagardelle and Kathy LaPorte.

The changes at Sprout come as venture capital firms grapple with new disclosures of their investment performance. Over the past several months, the internal rates of return of venture capital firms such as Sprout have come under scrutiny. Due to lawsuits and public record requests, a number of public institutional investors including the University of Texas Investment Management Co. and the California Public Employees' Retirement System have begun to release such numbers.

Some funds managed by Sprout have appeared to be in negative territory. For Sprout IX, a fund that closed in 2000, the numbers reveal a -25.1% IRR as of March 31 of this year, while for Sprout VIII, a fund that closed in 1999, the numbers show a return of -21.9% as of March 31.

After the storm

[interesting couple of articles in The Daily Deal the last few weeks on M&A and the general IB environment...]

After the storm
by Heidi Moore Posted 01:10 EST, 26, Sep 2003
http://www.thedeal.com/

Don Meltzer, 45, the co-head of global M&A for Credit Suisse First Boston, is that rare creature on Wall Street: an investment banker who has been at one firm for his entire career.

Meltzer joined First Boston right out of Harvard College in 1979. He took a break to attend New York University Law School and work a two-year stint at Cravath, Swaine & Moore LLP, but he rejoined First Boston in 1986. (His take on law: "I thought it was going to be a lot more fun.") Starting as a generalist, Meltzer went on to run CSFB's healthcare practice for four years and its European M&A and industry groups for three before taking the reins of global M&A in 2000 — just in time for the dealmaking downturn.

Age of reason

Age of reason
by Heidi Moore Posted 02:52 EST, 4, Sep 2003
http://www.thedeal.com/

Running mergers and acquisitions at a bulge-bracket bank hasn't exactly been a cakewalk in recent years. Volume has fallen; M&A bankers have been redeployed or laid off; commercial banks have used their balance sheets to take market share.

But Stephen Munger, co-head of worldwide M&A for Morgan Stanley, says the outlook is brighter at last. And after 20 years in investment banking, he's seen enough to make the call.

Sobriety test

Sobriety test
by Matt Miller
http://www.thedeal.com/special/manda/articles/feature2.html

At long last, mergers and acquisitions banking appears to be coming out of its funk. According to estimates by Dealogic, a New York research firm, the fee backlog for announced M&A deals in the third quarter is up after 12 straight quarters of decline.

Time for deal bankers to run over to their nearest Ferrari dealership in expectation of fat bonuses? Hardly. The fee pipeline may be finally picking up, but it's way too early to celebrate.

Double time

Double time
by Heidi Moore Posted 04:16 EST, 11, Sep 2003
http://www.thedeal.com/

When compensation expert Alan Johnson meets with clients, he describes what Wall Street pay will look like this year: "We've moved from the cappuccino culture to the Roman galley culture.

"Two or three years ago we were very concerned that [a banker's] cappuccino was exactly the right temperature and the foam was just so in the mornings," says Johnson who heads Johnson Associates Inc., a New York consulting firm. "Now we take the view that we put [the banker] in that little galley and hook him up to the oar, and if he doesn't like it, we'll get somebody else."

Start rowing.

Currency Rumors in China Shake Hong Kong

Currency Rumors in China Shake Hong Kong
By KEITH BRADSHER
http://www.nytimes.com/2003/10/09/business/worldbusiness/09hong.html

HONG KONG, Oct. 8 - Speculation that China will be forced to let its currency rise has sent a flood of money into the Hong Kong dollar, pushing up its value and inflicting heavy losses on traders while driving short-term interest rates here almost to zero.

The Hong Kong dollar is often described as having been pegged at 7.8 to the American dollar for the last two decades. But as currency traders have been reminded lately, to the anger of many, the Hong Kong Monetary Authority is only committed to maintaining a floor of 7.8 but has not set a ceiling for the currency's value.