"When Competing With Big Banks, Smaller Can Be Better" is the headline over a New York Times article about U.S.-based firms doing deals with and in China:
In 2010, the New York Global Group handled $1.1 billion in China mergers and acquisitions, up from $500 million in 2007, according to the firm's president, Benjamin Wey....
"You need rainmakers who have special access to Chinese companies — those special relationships drive deals," said Mr. Wey of New York Global.
His firm's Beijing staff includes two children of current mayors, the son of a chief prosecutor and another whose father is the chairman of a major state-owned enterprise.
There's a business development strategy: Hire the mayor's son or daughter! "Those special relationships drive deals."
Nothing against the bankers — it's not their fault their father or mother is the mayor, and they may be highly talented and hardworking individuals in their own right. Building and nurturing relationships is important in most businesses and especially in investment banking. But even so, there's something about this that strikes me as as demanding some skepticism. One begins to wonder whether the deals are being driven more by the relationships than by the underlying merits for shareholders or citizens.