Morgan Stanley Puts Mongolian Princeling to Work

Managers of Mongolian state-owned companies have likely been especially alert at meetings with certain bankers recently. That’s because the son of Mongolian Prime Minister Sukhbaatar Batbold has been out pitching on behalf of his employer, Morgan Stanley.

Battushig Batbold, who’s in his early 20s, is a metals-and-mining investment analyst at Morgan Stanley, just right for work in resource-rich Mongolia.

Mr. Batbold, based in London, has been spotted going to meetings in Mongolia, so it seems Morgan Stanley is putting its prestigious hire in front of clients quickly, a rare opportunity for an entry-level banker. Mr. Batbold joined the U.S. firm in November 2009 according to his online LinkedIn profile.

The hurry might have something to do with the sale of half the shares in the state-owned holding company for the world’s second-largest coal deposit, Erdenes-Tavan Tolgoi Co. The Tavan Tolgoi deposit is located in the South Gobi desert, near China’s northern border.

Bankers are pitching for a mandate to carry out the share sale this week and early next week, said one person familiar with the matter.

Mongolian resource companies have already been raising money abroad. Coking-coal producer Mongolia Mining Corp., the first Mongolia-based company to go public in Hong Kong, in October raised HK$5.8 billion (US$745.3 million) in an offering managed by Citigroup Inc. and J.P. Morgan Chase & Co. SouthGobi Energy Resources Ltd., which mines coal in Mongolia but is headquartered in Canada, raised US$442 million in a Hong Kong IPO in January 2010. Citigroup and Macquarie Securities Ltd. handled that deal.

Mr. Batbold’s dad, the prime minister, is viewed as more business-friendly than his predecessors. He used to run a trading company, Altai Trading Co., which had among its interests a gold-mining joint venture. He has five children with his second wife.

In hiring the younger Mr. Batbold, Morgan Stanley may be trying to replicate the pattern in China where the children of China’s top government officials have long been known for their prowess in winning business for investment banks or deals for funds. These children of privilege—called “princelings” on the mainland—include Jeffrey Li, the son of former Politburo standing committee member Li Ruihuan, who left pharmaceutical company Novartis AG after five years as its China chief to set up a private-equity fund called the GL China Opportunities Fund.

Many princelings are educated in the West, like Mr. Batbold, and bring back ideas that can influence policy.

One example is Chinese investment bank China International Capital Corp. Chief Executive Levin Zhu. Mr. Zhu helped bring back ideas from his work at Credit Suisse in the U.S. to influence the thinking of his father, Premier Zhu Rongji, in the restructuring of Chinese state-owned companies in the late 1990s. The power wielded by the children of the Chinese elite has come in for heavy public criticism in China of late.

Speaking at a One Young World summit last year, a get-together for influential people age 25 and under, Mr. Batbold noted that Mongolia has among the world’s largest undeveloped deposits of gold, copper and coal but many of its 2.7 million population still live in poverty
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