Trending Content
Career Resources
WSO Free Modeling Series - Now Open Through
May 31, 2024
9 Free Financial Modeling Lessons
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
+Bonus: Get 27 financial modeling templates in swipe file
+Bonus: Get 27 financial modeling templates in swipe file
1) This is too broad of a question to answer, but will attempt at providing some color. PE in Asia is actually quite hard to generalize, as it is a collection of multiple markets that differ quite a bit. It can be thought of more through two lenses, a) developed/mature markets (Japan/Korea, and to a lesser extent the local Singapore/HK/Taiwan markets) and b) emerging markets (China, India, and Southeast Asia). In general, the landscape is quite competitive, especially with the inflow of newly started local funds (mainly in China) along with the ever increasing attention of large cap GPs focusing efforts on capture the growth of the region with the PE market in the US/EU having heated up to its current state. I would say that for any international GP to do well here, they would need a deeply local team that understands the way the local market functions and how deals are done here. Given the name of their platform, they can leverage that to get deals done in the market with more credibility than the local funds. As a local fund, you're highly dependent on the key dealmakers (usually founders) in the firm, and their relationship/experience that they have built up over the years at institutional platforms (BB banks, other PE firms). If you're somewhere in-between without either, it would be tough to truly compete without focusing on a specific niche/sector/angle. From a deals that are done here perspective, Japan/Korea are mainly large-cap carve out markets from conglomerates, China is still focused on mostly growth with increasing number of control deals, India has been a mix of control/significant minority deals, and Southeast Asia is still mainly focused on growth with a limited number of control deals. Deal sourcing overall is still quite focused on relationships, and is far cry from the auction process-driven environment of the US and EU.
2) I prefer not to disclose too much, but will say I have experience in the SEA/HK market.
3) Comp for MF PE here is on par with many UMM funds in the US. Junior associates usually make anywhere from 220-280 all-in.
4) Tough. There are a ton of recruiters on LinkedIn, but making the logistics work, demonstrating interest and knowledge in the market you are aiming for in Asia, as well as the local language requirements make it already quite hard for just anyone with an interest in Asia to pursue a buyside career. A lot of this is dependent on yourself in trying to make this move happen. But on the flip side, for many of the funds there is an added advantage to the perception of being trained in the US, and the more complex and streamlined deal experience you'll receive in the US. And so far, I would say that sheer amount of technical work you receive in the US puts you at a decent advantage to the local HK/SG BB IBD Analysts. And of course, there are also local SEA/China funds who just would never consider someone having never worked in banking in the local market.
1) My firm has a general minimum equity check deployment threshold of $100-200M USD. Valuation multiples from an internal standpoint are quite similar, we evaluate things on an EV/EBITDA basis, with probably a higher tolerance for higher EBITDA multiples initially given the higher growth nature of many of these deals. Leverage multiples are dependent on the type of business, as needless to say there are all types of businesses. Generally, for a classic "LBO" type target, with a entry multiple below 10x, with growth around 5-10% annually going forward, we can expected 35-45% leverage.
2) As mentioned above, Asia is quite hard generalize. Asia is a collection of multiple markets with differing characteristics. Japan/Korea will give you more 100% buyouts, given the carve out nature of the recent deal flow. For China/HK/SEA buyouts, you will see a larger management roll-overs (family business/succession). For growth equity/significant minority deals, you will many times see VAMs, or earn-outs, with deal structures all over the place depending on the deal.