SWF - Direct Investments

Would be curious if people had a view on sovereign wealth funds that do direct investments (GIC / Temasek / ADIA / QIA / Mubadala) in North American offices. Any idea on comp / hours / investing experience at the junior level?

Specifically, deciding if it makes sense to make the jump from IB, since it doesn't seem like you can go from SWF to corporate PE. Thanks in advance!

 

Can say all are great places to work at and have their own pros (except QIA, can't speak to them). However, you will be doing co-investments at most of these shops except Mubadala. They are the only true SWF from this list (to my knowledge) that goes about the entire investment process like a typical GP. 

 

Made me lol. Mubadala doesn’t even have the most exhaustive investment process in Abu Dhabi. Investing in a structured SoftBank product or GP stake doesn’t count as direct. I’ve been spent time with every SWF/PF on the list. I’d say most are sort of in the same place with respect to level of direct investing. All are still significantly below true GP-type experience. Comp is inline with UMM PE for juniors. Gap to GP peers happens as a result of no carry but seniors at SWF will pull in low 7 figures cash. Comp to WLB balance is great. Some are tax free or majority tax free (Uncle Sam gets paid everywhere). I think GIC is farthest ahead wrt PE investing. I believe they have separate groups that handle underwriting for small vs. large tickets. Obviously, you’d want to be in latter group if you want to prioritize experience. You can tell which SWFs are more legit by lookin at the background of their teams. Try to cut through the BS of who has the best investment process. Everyone will say they operate as GPs but that is not true in any scenario. Final note, exiting from a SWF to a GP is hard but not impossible. However, usually people hop between them or do IR at a GP. Happy to answer additional questions.

 

Think you're thinking of Mubadala from 5+ years ago. They have made equity investments into GP firms but majority of their dealflow is direct investing as a lead. These investments are lowkey and are not made public in the press by design. "Doesn't even have the most exhaustive investment process in Abu Dhabi" makes me think you haven't worked with Mubadala or ADIA recently. Anyway, I don't have reason to spread misinformation as I'm just a banker servicing these funds... 

 

Hey - do not mean to bring back this thread from the dead but appreciate the insight here.

Is it possible for you to elaborate on what "low 7 figures cash comp" entails? Are you implying seniors at these Middle Eastern SWFs (ADIA, QIA, etc) can pull $3-4mm+ cash compensation (pre-US taxes for Americans)? Is it possible for expats to rise to those senior levels?

Please feel free to PM me if easier

 

Comp and hours are great; the former should be on par or even above market (usually a mix of higher base and lower bonus since there is no concept of carry), whilst the latter is probably better than most PE firms. 

Specifically on GIC and Temasek: the 2 will offer extremely contrasting experiences within their direct investments team. Also, all decisions are centralised in HQ i.e. Singapore so I wouldn't expect much discretion for satellite offices. On whether it makes sense to hire out from IB, I think you'll need to shed more light on what your longer term goals are. There are decent reasons why most decide to remain lifers within these 2 organisations.

 

thecoldburns

Comp and hours are great; the former should be on par or even above market (usually a mix of higher base and lower bonus since there is no concept of carry), whilst the latter is probably better than most PE firms. 

Specifically on GIC and Temasek: the 2 will offer extremely contrasting experiences within their direct investments team. Also, all decisions are centralised in HQ i.e. Singapore so I wouldn't expect much discretion for satellite offices. On whether it makes sense to hire out from IB, I think you'll need to shed more light on what your longer term goals are. There are decent reasons why most decide to remain lifers within these 2 organisations.

Do you mean GIC and Temasek are extremely different in their direct investments teams? If so, can you elaborate? 

 
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Specific to their direct investments with a fair bit of generalisations:

1. Whilst both firms optically lean towards sectors that benefit the Singapore economy, Temasek is extremely specific on the 6 verticals (some may argue 7 with EDG) which it takes positions in. Verticals like Life Sciences see a lot of doctors (PHD and medical) turned finance professionals join and hence the culture is drastically different intra-firm from a vertical like financial services where most of the team are IB hires. They also have an entire team of operating professionals with sector experience which one can draw upon, which will take over the portfolio management post execution (once again, EDG the exception). 

GIC on the other hand, looks broadly at corporate private equity as one investment vertical and hence it's driven either opportunistically (rarer) or in sectors which are pertinent to Singapore's economy. They do significantly more real estate and infrastructure deals as well. Culture is generally similar across the private investment teams since the profiles of the professionals are similar. GIC's typical risk appetite is also much more conservative and that is typically reflected in both the investment and return profile.

2. GIC almost never leads - can't think of a deal that they've done so. I've seen Temasek lead albeit usually in privatisations of core businesses e.g. SMRT. I'm sure you appreciate the significance between being at the negotiation table (even in a supporting role) and being a co-investor that takes reference from the lead. That said - very few MDs in Temasek to my limited knowledge are rainmakers and the few who are, tend to move on to set up their own firms seeded by Temasek.

 

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