Greenhill PCA or BofA IBD Generalist in HK

Hey guys, I got offers from the two teams as mentioned in the title. I'm struggling between these two. On one hand BofA has good presence and dealflow in APAC and could potentially give me a decent exit, but the recent performances in China/HK capital markets are quite poor so I'm worried about the return rate. Despite that the program has an average return rate of 88% for the past 3 years, I'm not sure if they will cut HC this year.
On the other side, Greenhill is perhaps one of the strongest PCA team in APAC, and the secondaries market is growing rapidly globally. They're about to close several largest LP-led/GP-led deals around APAC. Since APAC GPs are facing serious liquidity issues recently, I reckon the upside is large. But on the flip side, their track record of return rate is not very clear, and my exit options would be severely restricted within the secondaries sector while I'm kind of interested in corp related exits.
With this kind of trade-off, what do you guys think? Which one should I choose and perhaps why? Thanks a lot for any insights on this issue!

 
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The market is shitty for everyone in HK right now. The China market has imploded and is unlikely to recover over the next decade or potentially ever, with the current leadership over there. No one has much deal flow across any sector right now in APAC, except for the developed market geography teams (Korea, Japan, ANZ). Layoffs have been rampant, and there isn't really any sort of safe harbor for anyone in HK right now.

I'm guessing this is for an internship. I would say go with BofA and try to edge your way into working on ex. China deals. That would give you the most optionality even if a full time offer is not forthcoming.

I have some friends in secondaries, and from what I hear, Greenhill PCA APAC is pretty much just LP-led deals now, which is just a lot of mindless document and email processing. And apparently, they are known for very low fees, which can't translate well to good pay or career security, especially with the broader issues with their overall global platform. They had some success previously with GP-leds, but the guy driving a lot of that left, and while plenty of APAC GPs want liquidity, there are almost no buyers given the market volatility.

The immediate goal in this market should just be finding a seat. BofA will give you the best chance of that, with the recognizable brand name and the experience that is transferable to a wide range of things in finance, including secondaries. The medium-term goal should be to get a foot in the door in covering other geographies since SEHK and the China market are going to be dead for the foreseeable future.

 

Much appreciated for your detailed response! This is super helpful and pretty much answered all my questions. Since it's rare to get insights from senior APAC bankers on this forum, I really don't want to miss the chance to hear about your input on a follow up question if you have time. I'm currently studying in UK but have a slight preference to live in Asia/APAC. Considering the underperforming market in China, should I go all in for a fulltime position in London even if I convert at BofA the next year, or should I lateral to another region like Singapore/Australia if I start my career in HK (and if it's doable)? Thanks a ton for your insights.

 

No worries, I think APAC finance isn't well covered here on this forum. And I don't consider myself a senior banker yet by any means.

I think you should just keep your options open for now. It doesn't hurt to interview at more places in different locations and then decide based on which team you liked the most. There's a lot of uncertainty everywhere right now, and no one knows where the chips will land for most of the APAC region over the next decade. Bearing that in mind, I would just say to go get some good experience in areas with good growth potential without overly stressing about being in the right place. You will be just starting your career, and for the next 5 years or so, you will be plug-and-play, which gives you a lot of flexibility to pivot if things don't look good. BofA or any other similar global firm will have opportunities to move to other groups and other geographies assuming you can get through your first 2 years.

No need to worry about it too much. I would just aim for the broadest exposure possible and then figure out what interests you from there. There's no right answer or right path in the real world outside of the WSO echo chamber. Many people's careers are not linear or straightforward, and they end up doing just fine.

 

Probably depends on which team / asset class. That being said, a lot of HK junior bankers will opt to head to one of these fund of funds / asset managers given that there are much fewer traditional PE exits in APAC. Lifestyle is usually the major factor. Depending on the team, some of my friends at these firms usually work at most 50-60 hours a week, with probably very little to no weekend work. 40-50 hours can be more the norm, with some late night calls here and there with HQ in NYC / LDN. Pay is going to vary quite a bit, again depending on team and asset class, as well as firm and fund size, but for most of these, you will be taking a meaningful pay cut from banking. It will be probably a ~20% cut for base salaries at the associate level and a 40% or more cut for base salaries at the VP level. The cut on bonuses will hurt even more than that, but can be a bit easier to swallow if you can get carry. The promotion track / timeline can also be unclear sometimes since the partnership levels are usually pretty bloated, but that is an issue for a lot of buyside roles.

Ultimately, it is still a solid amount of money (if you can get out of the banking / buyout PE / HF mindset) and a much better lifestyle. For some, the trade-offs make sense.

 

Equity was always the primary name of the game in capital markets in HK. That is why the Chinese pullback from SEHK IPOs has decimated the investment banks here. DCM in Asia is primarily dominated by sovereign issuances and some corporate bonds by large conglomerates, especially the RE developers. Leveraged finance is a very small, spot-focused effort since bankruptcy laws are so different by country, with many Asian countries not really having any system for leveraged bond issuances / syndication / investment. That is why most buyout deals outside of the developed market economies (Japan is also mostly just bank debt, given insularity of market and cultural allergy to debt after their crisis in 1990s) are heavy-equity and some bank debt. There just isn't enough liquidity for non-IG loans. And most Asian debt funds have been absolutely decimated over the last 5 years with the Chinese RE crisis, with many closing up shop. There are still a few private lending funds out there, but they are not that big and very selective, with a primary focus on Korea, ANZ, and some India.

Corporate banking teams are still open for business, but USD interest rate environment remains elevated and uncertain. Most clients are not in a position to take that risk on borrowing right now. Onshore China rates are bottom-of-the-barrel, and the Chinese banks are all actively trying to lend, but no international banks are trying to take that risk. HSBC is actively trying to offload its prop debt book.

So short answer is no, deal flow for debt teams is down, as well. And most banks that have been active lenders in this region (which mostly means China) are in a pretty dangerous spot. Private lending funds might be in a good spot, just like in the U.S., to pick and choose their deals given the pullback by large institutional players, but no telling how their existing book looks with multiple SEA RE sectors going through a downturn alongside China right now.

 

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