Hong Kong: UBS AG will create a mergers and acquisitions team in China headed by Philip Partnow, after the country's share of global transactions more than doubled in the past three years.

Zurich-based UBS is also forming a financial institutions group and a general industrial team for advising Chinese companies at its local securities venture, according to Hong Kong-based spokesman Mark Panday.

China, with $2.45 trillion (Dh9 trillion) of foreign-currency reserves, is encouraging state-owned companies to make acquisitions abroad as the country seeks to secure energy and raw materials for its growing economy. China accounted for 7.9 per cent of the global value of deals so far this year, up from 3 per cent in 2007, according to data compiled by Bloomberg.

"China M&A has become increasingly important to us and will be both an important revenue stream and a critical part of our coverage strategy with key clients," said Partnow, who will keep his title as deputy head of investment banking at UBS Securities, in a phone interview.

Partnow, 42, helped set up UBS Securities, the bank's local brokerage and investment-banking venture with Beijing Securities in 2006.

Negotiating deals

The banker, who speaks Mandarin and Japanese, helped negotiate UBS's $500 million investment in Bank of China that year, according to the company.

UBS, Switzerland's biggest bank, ranks second in advising on M&A deals involving Chinese companies this year, behind China International Capital, data compiled by Bloomberg show. The second quarter was the busiest ever for Chinese deal-making with 765 transactions announced, the data show.

Goldman Sachs Group, the first Wall Street firm to form a venture in China, is the third-ranked M&A adviser in the country this year, Bloomberg data show.

UBS appointed Liu Wencheng and Gao Yiwen as joint heads of the China financial institutions group, Zhao Ju, who runs investment banking at UBS Securities, wrote in an internal memo. Si Hongpeng and Yang Huai will manage the general industrial team, according to the document.

"We are seeing more deal flow, larger transactions and a broader client base undertaking strategic deals," said Beijing- based Partnow.

Investments in natural resources will continue to drive Chinese M&A deals, Partnow said, adding that transactions involving industrial and agricultural companies are also "coming onto the scene."