Newsletter Issue One

1. Introduction to AIBC 2015 | Page 1

2. Mergers and Acquisitions | Pages 2-5
3. The AIIB Rationale and Prospects | Pages 6-8
4. AIBC Competitions | Page 9
5. An Interview Feature | Page 10
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 Introduction

Welcome to Asia Investment Banking Conference 2015!

Even while markets in Asia continue to grow as we move further into the 21st century, the regions financial mar-
kets remain an exciting, vibrant, and rewarding place to be. The Asia Investment Banking Conference (AIBC)
was started in 2009 to establish an avenue for students to develop a deeper understanding of the investment
banking industry in Asia, as the sector continues to thrive alongside the overall regional economic landscape.

A conference organised "for students, by students", the AIBC seeks to provide a holistic platform for the
exchange of ideas among established professionals and student delegates from renowned universities
worldwide. The 7th edition of the conference will see 300 student delegates come together at the Hong
Kong Convention & Exhibition Centre (HKCEC) once again from the 3rd to 4th September 2015. This years
conference will cover four broad themes:

1) Mergers & Acquisitions: Flourishing in an Uncertain Environment

2) Capital Markets: Agilely Riding the Boom
3) Markets: Adeptly Seizing Opportunities in a Diverging World
4) Asset Management: Navigating Volatility, Leveraging Prospects

Participating firms this year will include traditional bulge bracket banks, boutique investment banks, and
firms providing financial support services. Do take a look at our Speakers page on our website for the list.

Besides the various Keynote Speeches and Panel Discussions by our distinguished speakers, this years con-
ference will feature Interactive Learning Sessions (ILS) spearheaded by professionals who are experts in
their respective fields. The ILS will allow greater interaction between professionals and our delegates, and
equip delegates with valuable career and technical skills. There will also be plenty of formal and informal
networking opportunities that delegates can look forward to.

In addition, we strongly encourage all delegates to participate in the M&A Case Study Competition and Eq-
uity Stock Pitch Competition, both of which simulate real-life scenarios in the investment banking industry.
Attractive prizes including a fast-track opportunity to a summer internship with the platinum sponsor or
AIBC 2015 - Credit Suisse, awaits the winners of the competitions.

We look forward to seeing you this September.

Best regards,
The Asia Investment Banking Conference 2015 Executive Committee
Like us on Facebook: http://www.facebook.com/aibc2015

Issue 1 1
 Mergers & Acquisitions

MERGERS AND ACQUISITIONS

Sources: Dealogic, Thomson-Reuters, Mergermarket, FinanceAsia

Mergers and Acquisitions (M&A) involve companies that aim to purchase another, normally smaller, com-
pany (Acquisition), or combine with another company to form a single larger entity (Mergers). This is a very
lucrative business for investment banks, accounting for 31% of the total fee pool in 2014.

Why do Companies Engage in M&A?

Objectives of Buyers: There are two main par- Objectives of Sellers: The reasons for shareholders of
ties who may seek to engage in the acquisition businesses to sell out are fewer than those of acquirers.
of a firm. There are Financial Buyers, normally They could do so to achieve a Liquidity Event, selling
buy-side investment firms, who acquire com- their shares so as to monetise their value and cash out
panies to realise a return on their investment their investment. They could also wish to do so for per-
by selling it later, after improving the busi- sonal reasons, especially for businesses dominated by a
ness through various operational or strategic sole founder, the owner wishing to retire or lacking fu-
changes. This could be made more lucrative by ture successors. They may also have not solicited a sale,
the availability of cheap capital to finance a po- but rather accepted an extremely lucrative offer, or been
tential acquisition. forced to do so due to a poor future outlook for the busi-
ness.
There are also Strategic Buyers, which are
generally firms who seek to buy or merge with
another firm to integrate it as part of its own
operations. There are many benefits to doing
so, such as achieving cost savings from reaping
economies of scale and eliminating back office
redundancies (also called Cost Synergies), di-
versifying a firms sources of revenue, combin-
ing products to offer better value to customers,
expanding market share to increase market
power, or even taking out a potential compet-
itor.

Issue 1 2
 Mergers & Acquisitions
Role of the Investment Bank Brief Glossary of M&A terms

M&A often involves huge sums of money, and Divestitures

is a major event for all stakeholders involved. Divestitures are the partial or full disposal of an asset by
Thus, investment banks are frequently hired a company through sale, exchange, closure, bankruptcy
as advisors in the M&A process to maximise or any other means. This is usually done to non-core or
the interests of their clients, and navigate any loss-making portions of a business.
potential complexities. There are three main
roles that investment banks have in an M&A Spin-offs
transaction, namely conducting the sales pro- Spin-off is a type of divestiture where a new company is
cess, valuation and financing. created through the sale of a part of an existing business.
This is usually done to streamline the company by getting
During the sales process, bankers will have to rid of non-core assets or to unlock the assets value.
carry out research to identify potential buyers
and/or sellers, liaise with potential target firms Takeover
and acquirers, carry out due diligence, adminis- Many companies are averse to acquisitions, and prefer to
ter the bidding process, and prepare the neces- remain independent, in which case the potential acquir-
sary marketing materials and legal documents. er could turn hostile and mount a takeover to acquire the
Bankers may also need to engage in the struc- company by publically tendering for shares or trying to
turing of the transaction, especially if multiple kick off unfriendly directors off the companies boards.
stakeholders and legal entities exist, and also
to suit the complex requirements and inter- Management Buyout (MBO)
ests of stakeholders. For valuation, investment An MBO is the acquisition of a company from its exist-
bankers calculate the fair value (true worth) ing shareholders by the management and executives of a
of companies by using financial models and company. This is often done in cases where management
taking into account situational changes such feel that the business could be run more efficiently or prof-
as cost synergies. They also help companies itably without oversight from external shareholders, or
structure deals in a certain way depending on where management might have conflicts over company
the situation. This is especially so in the case of direction and strategy with shareholders.
mergers, where both sides have to agree on val-
uations so as to decide how their shareholders Leveraged Buyout (LBO)
will split ownership of the combined company. A LBO is the acquisition of a company that is predominant-
ly financed by debt. The debt is normally then put on the
Investment banks also assist in the financing of balance sheet of the target company, whose assets and
the M&A transaction by helping the company cash flows are used to collateralise and amortise the debt.
issue debt or equity, and may even provide a This is a key way in which private equity firms are able to
bridge loan to provide capital to the companies generate outsize returns, since they are able to increase
involved pending the completion of the trans- their Return on Equity substantially by using leverage, and
action. placing the debt on the books of the acquired company
limits their exposure to potential losses.

Issue 1 3
 Mergers & Acquisitions

M&A Review and Outlook (Asia ex-Japan) 1H2015 Review

2015 saw M&A activity hit a record high once again,
2014 Review with deal value in 1Q15 grossing a total of US$229.6
Asian M&A activity in 2014 was markedly greater billion, a 78% increase compared to the same period
compared to 2013, with its record high gross deal last year. We also saw a record breaking deal as Hong
value of US$743.9 billion, a 62% increase. Invest- Kong tycoon Li Ka-Shing reorganised his holdings,
ment Banking fees from the sector also increased, Cheung Kongs US$45.4 billion acquisition of the re-
with Thomson Reuters estimating that fees in- maining 50% of Hutchinson Whampoa eclipsing the
creased 10% from 2013 to US$2.7 billion. The year aforementioned CITIC deal. Estimated IB fees were
also saw a record breaking deal the acquisition of US$501.3 million in 1Q15, a 14.2% decrease from
assets from state-owned CITIC Group by subsidiary 1Q14.
CITIC Pacific, the US$42.2 billion deal eclipsing the
US$35.5 billion acquisition of Cable & Wireless HKT Outbound M&A activity also thrived as Chinese
by PCCCW in 2000. corporates sought to deploy their cash in Europe
amidst the backdrop of a declining Euro and cheap
The drivers of M&A activity in 2014 were numerous; financing as a result of ultra-low interest rates in the
investor sentiment flourished amidst booming stock Europe, a result of the launch of the ECBs Quanti-
markets, business optimism rose in view of poten- tative Easing programme. While China cross-border
tial political and economic reforms in several key M&A increased a mere 25% to US$28.8 billion in
Asian economies (India, Indonesia, China), and Asian 1Q15 compared to 1Q14, more than 80% of that ac-
corporates flush with cash sought to leverage their tivity was outbound. We saw a flurry of such deals in
strong balance sheets amidst low interest rates. 1H15, with Fosuns takeover of Club Med following a
frantic bidding war, Li Ka-Shings acquisition of tele-
coms giant O2 and train manufacturer Everholt Rail
to diversify his geographic exposure, Unisplendours
acquisition of a majority stake in H3C Technologies,
and the US$8.8 billion acquisition of tyre-maker
Pirelli by a ChemChina-led consortium.

An emerging trend we are seeing in recent months

has been the emergence of take-private deals
amongst US-listed Chinese firms. In late June, Qihoo
announced that it had received a US$9.1 billion of-
fer from an investor group led by Chairman and CEO
Zhou Hongyi, the latest in a streak of other privati-
zation deals that have totalled US$22.6 billion in 14
deals, compared to US$660 million in 1 deal in the
same period last year. Drivers of this trend include
the booming Chinese stock market that has enticed

Issue 1 4
 Mergers & Acquisitions
companies to shift
their listings back to
the domestic market,
an influx of capital into
the technology sector,
many of whose mem-
bers had listed on the
US market to raise cap-
ital in the past, and the
greater availability of
domestic capital.

That said, as we go into

2H15, there is greater
uncertainty whether
the current trends will
continue. The EUR de-
cline has arrested for now, and European bond yields have risen from their recent lows, which could dampen
Chinese enthusiasm for cross-border M&A. Domestically, the Chinese financial markets have experienced
significant turbulence, and it is still unclear if the real economy will avoid the potential hard-landing that
has been repeatedly predicted by pundits in recent years. No doubt, China and the region beyond still have
much going for them, standing resolute economically when other emerging market regions have run into
difficulties, but it remains to be seen whether the exuberance of 1H2015 will persist.

Top APAC ex-Japan M&A

Deals in 1H2015

Issue 1 5
 The AIIB

The Asian Infrastructure Investment Bank

Rationale and Prospects

The Asian Infrastructure Investment Bank (AIIB) has and Italy. Of the numerous countries that applied to
been a recent hot topic, with many heralding it as a be founding members of the AIIB, only North Korea
marker of Chinas ascent as a dominant force in the and Taiwans applications have been denied.
global economy. But what exactly is the AIIB, and
what does it mean for Controversial-
financial markets in ly, the AIIB was
Asia going forward? created with the
knowledge that
Formulation a similar bank
The AIIB is a multilat- already exists:
eral development bank The Asian De-
(MDB) aimed at fi- velopment Bank
nancing infrastructure (ADB). The ADB
development in Asia. has been around
As compared to other since 1966 and
MDBs, AIIB promises serves a similar
to focus on a single as- objective - to pro-
pect of Asias develop- mote economic
ment: infrastructure. It development in
aims to provide the re- Asia. While exist-
quired funds for the development of railways, roads, ing banks such as the World Bank, ADB and Inter-
airports and other infrastructure projects in Asia. Ul- national Monetary Fund (IMF) have voiced concerns
timately, the Bank would promote interconnectivity over its creation, the AIIB has promised that it will
and economic integration in Asia. collaborate with and work alongside its counter-
parts. As a matter of fact, the World Bank has begun
History cooperation with AIIB in areas such as institutional
It was first proposed by China in 2013 in response to standards and framework formulation.
the slow pace of reforms in other MDBs, as well as
to create an additional financial institution to satis- Implementation
fy the demand for infrastructure loans in Asia. The The AIIB will begin with an initial capital base of
AIIB has since received widespread support from 57 US$50bn, eventually to be increased to US$100bn
nations as of 15 June including developed western (via a US$50 billion contribution from existing finan-
economies and staunch US allies such as the United cial institutions and private capital).
Kingdom, Germany, France, South Korea, Australia China will hold a 30% stake in AIIB, making it the

Issue 1 6
 The AIIB
banks largest shareholder, followed by India with a gion lacking the necessary financial framework to
10-15% stake. The prominence of Asias fastest-ris- facilitate such investments (Such as ratings agen-
ing economies (i.e. China and India) at the helm of cies, financial regulatory laws, liquid bond markets).
AIIB leadership represents a potential consolidation Thus, there exists a major structural financing gulf
of soft economic influence in the region. However, for infrastructure in developing Asian countries,
notably, China does not hold any veto power, having and the persistence of the problems that impede
only 26.06% of the institutions voting rights, unlike the flow of funds to infrastructure projects will hin-
the IMF and World Bank which have the US holding der economic development. Hence, the role of AIIB
a limited veto over decisions. serves to bolster financial leverage in infrastructure
Essentially, AIIB plans to create a three-tier organ- projects across the region and improve interconnec-
izational structure, including a council, board of di- tivity among Asian countries, thus potentially mak-
rectors and management, alongside the introduc- ing significant achievements in satisfying infrastruc-
tion of a supervisory mechanism to ensure sufficient, ture investment needs.
transparent and open policy-making. The AIIB seeks
to build a reliable organization that has a small and Potential Impact on Finance in Asia
efficient management team, with zero tolerance for While it is premature to come to any decisive conclu-
corruption. Amongst many other benefits, the par- sion about the AIIBs influence on Asias future, it can
ticipation of advanced European countries would be safe to assume that its introduction would boost
bring good governance and a strong focus on devel- investment activity in the Asian financial industry.
oping high-quality projects, while adhering to strin- The introduction of AIIB would create an influx of ac-
gent environmental standards. tivity within the financial services industry in Asia. As
The combination of reliable bureaucracy, transpar- the number of infrastructure development projects
ent open policy-making and dynamic pluralism could in the region increases, the volume of fund-raising
potentially encourage the opening of profitable for- activities organized by the various member states
eign investment channels, essential to AIIBs core would similarly increase. Financial institutions in
objective of satisfying Asias growing infrastructure Asia, especially the ones from prominent hubs like
demand. Hong Kong and Singapore, can provide a full range
of financial services and expertise to the member
Potential Impact on Asian Economy states of AIIB. This could come in various forms,
The ADB estimates that the region requires US$8 such as issuing bonds and raising funds from inves-
trillion in financing by 2020 for infrastructure pro- tors and providing project evaluation services. In ad-
jects, particularly for energy and ports, in order to dition, AIIB will coordinate numerous private-public
build the infrastructure necessary to sustain the banking interactions that could facilitate the tech-
growth trajectories of the regions economies. How- nological catch-up required to bring about greater
ever, Asia lacks existing platforms that can channel efficiency and effectiveness.
capital to satisfy these financing needs, due to tra- With the AIIB, the RMB is likely to be further inter-
ditional commercial banks having less appetite for nationalized with an increase in RMB-denominated
such project finance, and many countries in the re- loans, increasing the use of the RMB as a medium in

Issue 1 7
 The AIIB
international financial transactions. In conjunc-
tion with the creation of AIIB, there have been
an increasing number of countries including
China, India, Russia and Turkey that are avoid-
ing the use of the USD as a means of carrying
out transactions. This potentially bodes well for
Chinas attempts to achieve the internationali-
zation of the Chinese Yuan, to compete with the
USD as the worlds primary reserve currency and
medium of exchange, which would boost Chi-
nas economic power and prestige.

Ultimate Significance of AIIB

That said, not everyone agrees that the setting
up of the AIIB will be a game-changing step for
the AIIB. Ben Bernanke, former chairman of the
US Federal Reserve, noted recently that the
amount of capital in private hands today is much
higher than in 1944 when the World Bank and
IMF were created. This implies that private capi-
tal can exist as an outlet for infrastructure financ-
ing, thereby putting the relevance of AIIB into
question. There are also fears that China could
wield the AIIB as a political tool, using the carrot
and stick of withholding or providing loans as a
way to get smaller countries in the region to fall
in line with its desires, fears that China has tried
to assuage by bringing in the involvement of nu-
merous other countries. That said, the true sig-
nificance of the AIIB in these early days is yet to
be seen. Infrastructure investment will definite-
ly continue to be a growing sector, although it
remains unclear as to who will be the dominant
provider of capital in this area. Nonetheless, the
setting up of the AIIB belies significant potential
benefits for the regions economies and financial
markets, and many will definitely hope that it
achieves what it has set out to accomplish.

Issue 1 8
 Competitions

M&A Case Study Competition

Interested in joining investment banking and keen to understand this industry better? Heres your
chance to work on a real-life example by participating in the AIBC 2015 Investment Banking Case Study
Competition.

Simply form a team of 3-5 people and present a strategic review for a company in the form of a pitch-
book. The details of the company will be provided by the committee. The finalists will be shortlisted
and invited to present to a panel consisting of committee members.

Equity Stock Pitch Video Competition

Always had a passion for equities or interested in Sales and Trading? Take part in the Equity Stock Pitch
Video Competition to showcase your stock pitching skills and stand a chance to be fast tracked to
Credit Suisses 2016 Summer Internship!

Simply create a video to pitch a buy or sell call based on the scenario given. The video does not
have to be professionally filmed and you can use visual aids to supplement your presentation. The
winner will win a chance to be fast tracked for first round interviews for the 2016 Credit Suisse Equities
Sales and Trading Summer Internship.

The competition will be opened to delegates who have registered and paid for AIBC 2015 from 13th July
2015. For more information, please refer to http://lseaibc.com/index.php/competitions/equity-compe-
tition.

More details about the competitions will be released nearer to the date.
Do take note that only AIBC delegates are allowed to participate in the above competitions.

Issue 1 9
 An Interview Feature

A Credit Suisse Staff Interview Feature with Zi-Kuan Lim

To start off, tell us more about yourself.
I am currently a Director in the Corporate Finance team with Credit Suisse in Singa-
pore. Outside of work, I love to travel and try out new restaurants with my wife and
young daughter. I am a Singaporean and spent most of my childhood here. Later
on, I spent 5 years in London for my undergraduate studies and work experience.

How would you describe your career path?

After graduating from London School of Economics in 2001, I joined the corporate
finance graduate program at Ernst & Young, London. I moved back to Singapore
and joined Credit Suisse as a corporate finance analyst in 2003 and subsequently
joined the Southeast Asia Mergers & Acquisitions team in 2005. Since then, I have
been focused on both the origination and execution of M&A transactions through-
out the Southeast Asia region. In 2013, I became co-head of the corporate finance
team. This year marks my 12th year with Credit Suisse.

Describe, in your opinion, the type of person most suited for a role in IBD?
We look for candidates who have strong analytical ability and intellectual curiosity,
and display a strong willingness and ability to learn. They should be hardworking
and discipline, and be able to multi-task under pressure. Given how a bank is struc-
tured, it is important that they can work well in teams and get along with other
colleagues. Being passionate about what they do will help a long way in terms of
establishing a long term career in banking.

What do you think is the most important attribute that enabled you to arrive Zi-Kuan Lim
at where you are today? Investment Banking Department
I do not think it is easy to just pinpoint a single most important attribute. Similar Singapore, Credit Suisse
to what I have highlighted above, the key is to be passionate about what you do,
and to maintain a strong intellectual curiosity to keep challenging myself. Investment banking is a very dynamic profession, and
even after 12 years in banking, I came to realize that there is always something new that I can learn and that is the only way I keep
myself motivated in my career. It certainly helps that we have a great team at Credit Suisse which has reinforced the enjoyable
and enriching experience I have had in my career.

What advice would you give to someone who is interested in the investment banking industry?
The key is to get a strong understanding of what investment banking is really about, and this does not only mean reading up
transactions in the news but also finding out from your alumni or other network what an investment banking career really entails.
I usually advise students to apply for an investment banking internship as I strongly believe it is the best way for someone to truly
assess whether investment banking is something they want to pursue as a long term career.

What expectations do you have for your business field in the next couple of years?
M&A continues to remain very active in this region as we continue to see both inbound and outbound interest. With the strong
demographic and economic profile of Southeast Asia, there will be continued interest from corporates looking to expand and
improve their platforms and growth profiles.

Issue 1 10
 Sponsors & Partners

Our Sponsors and Partners

Platinum Sponsor:

Gold Sponsor:

Strategic Partners:

Analytics Partner:

Education Partner:

We are continuing to update and add sponsors for AIBC 2015.

Please check our website at lseaibc.com frequently for updates.

Issue 1 11