A&M targets 20pc revenue from Asia amid China's battle with slowdown

Alvarez & Marsal (A&M) aims to expand its revenue from Asia to one-fifth of its global income in five years, as Chinese companies are increasingly seeking higher efficiency in operation and overseas expansion amid the growth slowdown.

The New York-headquartered consultant, recently famous for its restructuring business for the bankrupt China Evergrande (3333), said the proportion of Asian business in its global revenue is only single-digit now and the goal presents its commitment to and positive outlook about the Chinese market.

A&M is seeing an increasing demand from mainland companies whose growth has been slowed or even reversed amid the intensified domestic competition and escalated geopolitical tensions, according to Zhu Wei, managing director and co-head of A&M North Asia.

But they are “absolutely not” in distress, said James Dubow, managing director and co-head of A&M North Asia, adding that they just care more about the operation now after the dazzling rapid development period ended.

Based on the current condition of the Chinese market, A&M will focus on four types of businesses, including performance improvement, restructuring, disputes and investigations, and private equity services.

But Zhu and Dubow stressed that the companies in the developed markets like Europe and the United States are also seeking more “tangible results,” not just China facing a slowdown.

A&M also targets Chinese companies that are exploring overseas markets, as expansion has been a must for nearly all industry leaders.

Dubow noticed that local banks are still confident in funding Chinese companies, as long as they have specific plans for their expansion. 

When asked about China’s sluggish real estate sector, Dubow thinks the restructuring is getting towards the end. But he sees the debt reduction needs to be extended even after the restructuring.

In the past five years, A&M expanded rapidly in China (including Hong Kong), with the number of employees up by three times to 400 and the revenue up by four times, according to the company.