In May 2011, Khan took the unusual step of moving from corporate research to investment banking after seven years at JPMorgan Chase & Co., most recently as global head of Internet research. Wah, whose TMT co-head is Mark Simonian, just celebrated his 20th anniversary with Credit Suisse. Named head of the tech group in 2005, he assumed his current post in 2009.
Both based in New York, veteran Wah and new arrival Khan have quickly jelled by closing one of this years biggest Internet deals. Credit Suisse advised Alibaba Group Holding on its $7.6 billion buyback of half of U.S. Internet giant Yahoo!s 40 percent stake in the Chinese e-commerce conglomerate. It also handled several buzzed-about smaller transactions, representing San Franciscobased data manager Splunk and Austin, Texasbased online marketer Bazaarvoice on their IPOs. Year-to-date through late September, Credit Suisse had jumped from 11th to fifth place in global TMT deal volume, with 37 transactions worth a total of $41.3 billion, Dealogic reports.
The banks TMT group has been rebuilding since the tech bubble burst in 2000 and prompted the exit of high-profile bankers like Frank Quattrone, George Boutros and Jason DiLullo. Its stabilized around old hands such as Wah, global head of investment banking James Amine and Eric Varvel, CEO of the investment banking division. The firm has always created an environment where individual bankers can have a significant impact, says Oregon native Wah, who climbed the ranks by covering a wide range of industries, including food, health care, pharmaceuticals and steel. Its an entrepreneurial approach, but in the context of a team.
Joseph Tsai, co-founder and CFO of Hangzhou-based Alibaba, can attest to that. Credit Suisse had excellent individual bankers, but they brought a team approach to the relationship and they devoted very senior resources, Tsai says.
Sometimes the Credit Suisse style can lead to clashes, though. We have a culture in which we all have points of view and we air them, says Wah. If we are arguing and debating, he adds, that helps clients get the best answers from us.
In the Alibaba transaction, which closed on September 19, there was plenty to debate. Former Yahoo! CEO Carol Bartz had reportedly said that her company didnt want to unload its Alibaba stake, because she viewed it as a good investment in China and Chinese media. But Yahoo! shareholders notably activist hedge fund manager Daniel Loeb of New Yorks Third Point had other ideas. Loeb, who owns about 6 percent of Sunnyvale, Californiabased Yahoo!s stock, pushed Bartzs successor Scott Thompson to make a deal.
Alibaba has many different parts that were tricky to price but very lucrative, including marketplace Alibaba.com, shopping site Taobao Marketplace and payment service Alipay. When Yahoo! relented, Wah, Khan and their colleagues helped bring clarity to those valuations.
For Alibaba, the megadeal was financed using the best possible counterparties and done when many leading Internet players market caps have been shrinking, explains Khan. Credit Suisse helped raise $1.3 billion in private convertible preferred bonds. The fundraising period started four days after Facebooks ill-fated IPO; despite a sharp drop in Facebooks stock, Alibabas financing terms didnt change.
Yahoo! plans to give shareholders $3.65 billion, or 85 percent of its aftertax profits, and keep the rest. New CEO Marissa Mayer hasnt announced what the company will do with that money. Mark Stoeckle, CIO of U.S. equity and global sector funds at BNP Paribas Investment Partners in Boston, has a suggestion: Focus on mobile. The first goal [for Yahoo!] has to be to keep existing users as their traffic switches from desktop to mobile, he says.