AMA: Mega Fund Associate - Asia Pacific Edition

frostnovae783's picture
Rank: Baboon | 100

This website gave me a lot of true (and not so true) information into the industry, but more importantly, the amount of comments from people who have no idea what they are talking about made me laugh a lot.

So in this context I thought I would give back to the community that provided me with such entertainment and simultaneously provide an Asia Pacific view point because I was never able to find information on this region while going through the well trodden path.

Comments (45)

Jun 13, 2018

@WallStreetOasis.com can you verify the original poster's background?

For context, can you give us your background? School or at least target/non-target specification, previous job, etc.

  1. What are the barriers to breaking into Asia Pacific PE from NY with no relevant language skills? How would you go about that? Did you use NY based headhunters, or did you have to find local headhunters?
  2. Are you from the region? Why there and not the USA?

2.5 Follow up question: what market do you operate in and how is that market different from its counterpart in the West?

  1. How do you like your job? Are there elements that are Asia Pacific specific that you like or dislike?
  2. What cultural differences have been most pronounced in terms of in work style, work life balance, hierarchy, quality of work, dress, leisure, etc.?
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Jun 14, 2018

Sure I grew up in the region but did boarding school and college (Ivy) in the states. I did 2 internships at a BB (MS/GS/JPM) in NY but decided to start FT back in the region as I knew long term that was where I wanted to be. Did IB for 2 years then joined a MF

Answers to your questions:

  1. I think at a junior level there are definitely barriers but also depends on location. e.g. HK mainly serves North Asia (China, Japan, Korea), Singapore serves South East Asia (Indonesia, Thailand, Vietnam etc.) and then there's Australia which doesn't require any language except English. Australia is a bit unique in the sense some funds serve Australia out of Singapore, others out of HK or have will physically have an office in Australia.
    In terms of barriers into breaking into Asia Pacific from my experience I did well during my internship and had a FT offer to return and negotiated that I wanted to start in the region. The bank will chuck a little bit of a fit as obviously the NY office spent the time and resources to recruit you and now you are going to be a resource in another region but ultimately they would rather keep you in the family than see you leave to a competitor. My transition is actually the rarity here in the region. Most people that work in PE here, except maybe for those that serve China as you really do need to be highly fluent in Mandarin), did their two years of IB in the US then came over. Talking to them usually headhunters will reach out or they just proactively reached out to headhunters here in the region. As long as you can indicate why you want to work here, whether its family or you have an interest / story, it shouldn't be too difficult especially for Singapore and Australia where the main language is English.
  2. My family is from the region. If you look at where growth is coming from for PE firms and where growth in general is coming from for the world economy its quite clear it is the Asia Pacific. Just look at KKR's fastest growing platform - it is its Asia Fund, hence they made Joseph Bae Co-CEO.
  3. IB is IB and PE is PE wherever in the world - the only difference is likely the deal dynamics and structure due to the stage the markets are at. For example I have worked on an Australian deal and it is basically exactly the same as working in the US at is a developed market with the majority of businesses all being corporatized, and if sold, usually it is a majority stake being sold in an auction process by an investment bank. Similarly I have worked in Asia where markets are less developed, still majority family owned who actually care about their partners and not the highest price and will often times will not sell the majority (Note: if they do then usually its a big red flag). Asia is just going through what the US went through with the Rockafellers etc.
    The only downside about Asia (for PE anyway) in this juncture is that it is probably harder to do well in the region as valuation expectations are much higher as businesses are still majority owned by families so every dollar you pay for a business is literally going to their pockets, unlike in developed markets. Additionally, every major PE firm knows that eventually the Asia Pacific will become corporatized and due to population sizes and growth they have to build a track record here.
  4. As mentioned above, IB is IB and PE is PE wherever in the world. Yes the markets maybe different but the type of work is the same. Moreover everyone in the major funds were basically educated in the US or UK, did their IB stints or even started their PE careers in those regions then moved to the Asia Pacific. So in terms of culture I would say the only difference between Asia Pacific and the US is probably just size of office. In this region you will know everyone and talk to everyone in your teams. NY office during my IB time was just a giant amalgamation of people of which you only knew a portion of.
    In terms of life style for PE, I would say my US counter parts actually work longer hours than me yet we all get paid the same (at the associate level anyway). In IB if you are at a top BB (MS/GS/JPM) you are getting fucked no matter where you are so hours will be exactly the same.
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Jun 14, 2018

Could you comment a bit on summer associate recruiting for MBA level? How to break in? Do they apply on bschool career service, network, or else? Also, I am curious on what type of contact you develop from your jobs (bankers, business owners, other buyside professional or else?).

Jun 14, 2018

This is the only hard thing about breaking into private equity in Asia Pacific and Europe for that matter. There is no strict recruiting timeline for PE jobs here as the 2 and out system does not exist. Similarly they don't interview people after 6 months of banking, they interview people who have 2-4 years experience. This results in 3 key things:
1. Each position is more competitive as everyone on the street
will likely be going for it and more over you are competing against bankers not just in the region but else where
2. You will not have an opportunity to interview at every PE shop like in the US. i.e. if you are a first year IB analyst and KKR just hired someone that year - it is unlikely they will look to hire for the next 2-3 years so unless you want to wait that long for KKR you will unlikely ever interview with them
3. The interview process, from talking to my US counter parts, is much harder as they expect you to know a lot more considering you would have done about 2-4 years IB experience by the time you start recruiting

For your background funds here do recruit from MBA, there are quite a few PE associates here who have MBA, but there is no strict MBA recruiting. You will have to find which funds are hiring and go for those roles. It is unlikely the funds will reach out to you, you would have to reach to headhunters in the region and find the lay of the land.

As mentioned above PE is PE everywhere in the world so your contacts are the same as you would in the US, e.g. bankers, business owners, buyside professionals. I would say its much easier to network here since all the major cities are much closer and everything is more concentrated. I would also say contacts are much funner here as well as e.g. through a deal I met a billionaire family (won't say name since industry is too small) - I am now friends with the grandson who is around my age who invites me on his yacht parties.

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Jun 15, 2018

Thanks for the detailed response to my question. Currently, I am working in a TMT start up as a product manager on the technical side, which is in series C and almost an unicorn, and I am interested in VC/GE down the road. Could you tell me what is the best strategy to break in? I am mostly interested in Sequoia, Hillhouse and Warburg, but it seems that Warburg only takes in bankers.

I am pretty close with the CEO of my company, and he is willing to put in a few words for me, but the funds that invest in us are not tier 1 funds in Asia (more like tier 2, many tier 1 fund gave us term sheet, but the tier 2 funds give us much better valuation, and there is no conflict of interest and we do not need resources from tier 1 funds at the moment). I know a VP from Warburg/Carlyle and CIC. Will ask them for introduction to the funds that I am interested in be a good strategy?

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Jun 16, 2018

Can definitely attest to the funner contacts. The likelihood that billionaire families you meet in the Asia region having SERIOUS political & influential connections are very high. They live like kings. Some are like characters out of james bond movies.

Don't break yourself on the way to making yourself

Jun 14, 2018

Thanks for doing this! Would you have a sense of which headhunters to reach out to for Asia based PE funds?

Jun 17, 2018

Asia is quite a large market, some headhunters are better at certain markets than others. You can PM which specific markets you are looking at and I can guide you

Jun 14, 2018

If you PM me - happy to give you guidance

Jun 14, 2018

What's the VC and startup scene like in Asia? (E.g. is it local players finding the best deals/most active - if so which ones, or is it the large US names that have some reach into Asia?)

Know this is a bit off topic, but asking in case you've had exposure to it.

Jun 14, 2018

The start-up scene in Asia is quite large given the opportunities to capitalize on the high population sizes, young demographics and propensity to spend. I'm not that familiar with who the major players are at the very early stage seed investing, but for larger series you start to see the the major players of Seqoia, Softbank, Tencent etc. In fact some of these raising are so large they are being led by MFs e.g. Go-Jek raise was led by KKR / Warburg and TPG / Carlyle led what was basically a $1.9bn series A of Baidu's financial services start up.

Unlike the US, in Asia Pacific at the MF the same teams that evaluate more mature businesses will also evaluate these growth / VC type investments as well.

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Jun 15, 2018

VC scene is very active. China has the second largest number of unicorn, according to a report by Deloitte, right behind the US, which has about 140. The third country is India, which has about 10.

Jun 16, 2018

Which IB coverage/product groups are most sought after for APAC PE? Is it the same as the rest of the world? Also since mainland IBs are 90% capital markets, what is the transition like from domestic ECM/DCM to buyside? Lastly, given that there are numerous $500mm - $1B funds in HK, how much easier is it compared to a MF? Thank you.

Most Helpful
Jun 17, 2018

In relation to your 1st /2nd question:
In APAC, some banks run a generalist model while others have the traditional coverage / product teams. I would say as long as you are in a generalist model or coverage team in a top bank then you will get a look. If you are not in a top bank then you have to be more specific on the coverage team, each market has its nuance you will have to do some research / ask around e.g. Credit Suisse in SEA is considered the best and UBS in Australia. But never underestimate the power of prestige GS is still GS even though quite frankly in some markets they are no longer really top 3. You do not want to be in a product group here in Asia such as ECM or DCM as even during an IPO process or bond issue the coverage team in a will do most of the work and whatever little modelling there is while the ECM / DCM teams are really just preparing generic or niche ECM / DCM materials (believe this quite similar around the world except for maybe MS M&A in NY). In some banks the ECM / DCM team is just VP upwards and they staff juniors out of the coverage team e.g. UBS. LevFin at certain banks is ok as they handle all the debt modelling rather than ask the coverage team to do it e.g. GS. Just thinking now I don't think I know anyone who did pure ECM or DCM that is in PE right now - could be wrong.

In relation to your 3rd question: Yes depending on market conditions and quite frankly luck - a lot of bankers here in Asia Pacific lack the M&A deal experience relative to more developed markets due to the fact of where the market is at this point in time in Asia (businesses generally don't need M&A grow yet unlike in more developed markets hence they just raise money whether through equity or debt to pursue organic growth. Additionally a lot of business are family owned and therefore look to IPO to maximise cashing out). However this does not necessarily mean you can't get M&A experience it just means a smaller % of bankers relative to the same % in more developed markets get that M&A experience e.g. my experience in 2 years was 1 IPO, 7 M&A. But quite frankly a lot of it is due to luck / timing - yes there are some things you can control e.g. be good at your job so people want to staff you, play politics right to follow the right MD / VP who are bringing 80% of the deals in your team but most factors are out of your control e.g. the coverage team I was in prior to me joining had a dip in market activity and therefore there wasn't much deal flow but fortuitously in the 2 years I was there the market just boomed. Similarly because the market dipped and there wasn't much deal flow the main associate in my team organised a rotation to NY the year before I joined and left half way through my first year. Consequently I was required to step up in terms of the type of work I was doing much faster than other analysts which while hard in terms of hours was very good from a learning perspective but I would classify this as pure luck. Similarly the majority of my M&A deals were buyside, of which, many were in auctions and yet I won every single one - While yes your MD should be smart enough that if he is backing a buyside horse that he should have clear reason why this buyer rather than others will win because it is much easier and less risky to just provide financing trees to all potential buyers rather than conflict yourself out through M&A but I still consider this out of my control and thus luck.

However as mentioned above, when PE shops hire they look at analysts globally so their talent pool is not strictly tied to Asia Pacific. There are many associates here who started their career in NY or London and moved back, just thinking out loud this is probably why they look to these markets for hiring as in general terms their M&A experience should be more developed after a set number of years.

If you are in ECM I would suggest you try to internally rotate as soon as possible to a coverage team. If you are in DCM I would suggest you try to rotate into LevFin or do LevFin work (some banks have the same team doing both) or a coverage team.

In response to Question 4: Yes, there a lot of smaller funds in HK, I would say in general terms it is easier but not to the extent you would expect, unless they are a really bad fund in which case you shouldn't want to join them in the first place. The reason for this is as mentioned there isn't a standard recruiting timetable in Asia Pacific, hence if no MF funds are hiring and only these $500mm - $1bn funds are hiring, guess what your competition is still going to the be entire street including those who may end up going to MF. This is because people just interview for practice knowing they wouldn't accept the offer (I know this because many of my friends, including myself, did this). What this does is that it causes the people interviewing to have a quality benchmark that is probably higher than what you would see for a similar fund in the US for example. But in general terms I would say it is easier as competition is still less than for MF roles.

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Jun 17, 2018

Thank you very much for the highly detailed response - much appreciated. One last question, what are the reputations of domestic Chinese banks like, especially the BB JVs (e.g. GSGH, MSHX, UBSS)? This relates to my question about being pigeonholed in capital markets.

Jun 16, 2018

Thank you for doing this. I have a couple of questions for you below:

  1. How large is your deal team on average? How many MDs, VPs, Associates, etc.?
  2. How large is the typical deal you look at? i.e. in terms of TEV and EBITDA
  3. How do you split your time between New deals and portfolio companies?
  4. Can you please discuss at a high level the roles that each position (i.e. MD, VP, Associate) play in a new deal diligence process?
  5. Do you travel for management meetings? How much time do you spend on the road in a typical month?
  6. What aspect of your job do you enjoy most?

Thanks again for your time.

Jun 17, 2018
  1. In general 3 people - 1 of each of the levels you mentioned. In general this means that associates in Asia Pacific probably get more responsibility than say in the US where they usually run fuller teams. Has its pros and cons, e.g. as a 3rd year associate in Asia you will probably still have to model while in the US you will likely have a first year associate under you and vice versa i.e. 1st year associates in Asia get much more exposure than the 1st years in the US
  2. I think the easiest way to to answer this question is for MFs the minimum equity check size for the fund itself has to be ~US$150m. Depending on the deal structure, multiple etc that widely vary the TEV and EBITDA
  3. This really depends how your businesses are doing. If everything is going well then its really just attending board meetings and updating investor update packs which should be like 20% of your time. Thus far I have been lucky so that has been my ratio but I have friends in other funds where that ratio drastically increases. But some people really like the portfolio stuff but TBH my point of view is that it is really BS when PE professionals say that their fund or they themselves get really operationally involved. I agree you get more operational exposure through understanding the strategy, board representation and having operational guys come in to give advice on cost savings or process improvement but as a PE professional this is all still at a very high level. Unless you are actually working in the company or executing the strategy how involved can you really get, and if your fund is making any PE professional with no background or experience go in as say a head of strategy then I would really question the value add of that fund. But this is all relative as my fund obviously deals with companies that are much larger scale and therefore should be able to afford people who know what they are doing.
  4. MD - sources deals and only gets involved in very key aspects. Don't expect any help on executing form an MD.
    VP the guy in charge of executing, but at this stage probably has a family to get home to so will help where he can during relatively normal working hours. Likely give you a framekwork on what the key diligence items etc will be and how to go about it.
    Associate does everything that is required to execute the deal which includes the DD, liasing with advisers etc.
  5. Yes you do, you can travel as much or as little as you want. If you tell your VP hey I am too busy I don't think its worth my time to travel to Shanghai for that management meeting he will likely be ok with it. Alternatively if you love travelling you can go travelling every other week if you really wanted to. I will travel at least 3 times for boarding meetings in a month plus add a couple more for management meetings. If you are deep in DD for a business not in your home location expect to travel more but again doesn't mean you necessarily have to. E.g. one associates in my team absolutely hates travelling so they basically only travel for board meetings and some how even when they are deep in DD for a company not in his home location they can manage just through using phone and email.
  6. I am generally a curious person so the thing I like the most is I think PE is just a good platform to learn, meet highly successful people and see new industries, businesses etc. This might be more so in Asia Pacific where PE teams are not structure by industry verticals.
    I have been invited to events / activities which ultaimtely come from the fact I am working in PE and sometimes I sit back and think wow this is actually pretty cool and something I probably wouldn't have been able to do if not for my time in PE. e.g. Being invited to the VVIP of UFC when they were looking for an external investor a couple years back. Plus I think if you are not really sure what you want to do, PE is the best job to be in because 1. you are highly recruitable post your experience whether it be another job or to go to business school 2. On a relative basis you should be getting paid decently during this time of uncertainty and 3. For the first 3-4 years at least, you will be learning a lot and building a network that should help you form a conclusion on what you want to do long term.
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Jun 16, 2018

Hi Frost, thanks for doing this. I'm based in the region as well and yes, finding and talking about APAC opportunities in APAC are always a bit more challenges on WSO.

What country are you based in if you don't me asking? Where do you mainly source your deals from? What are your thoughts on the spit-spat tariff war b/t China and the US going to affect dealflow on a go forward basis?

Jun 17, 2018

Sorry I will not reveal my location - market is too small.

Sourcing is like anywhere in the world a combination of auction processes and relationships. But thinking rationally, if the business is family owned and they are looking to sell a majority why wouldn't you go through an auction?

I think at this rate, it was it quite clear China is going to take over US as a super power unless the US really starts taking charge, which to Donald Trump's credit, he is really trying to start intervening. In general the tariff wars between China and US are more isolated to commodity type trade / manufacturing, in terms of deal flow I would say most funds are generally averse to both those industries as these businesses generally compete on price with little to no differentiation. So from my perspective I don't think it will impact the deal flow that I see materially but I could be wrong.

Jun 18, 2018

Thank you for doing this. There are lots of useful info on this thread.

My question is - as a guy who did not spent time on FT IBD (did internship at a top 3 bank in HK but did not return), do you think it is worthwhile for me to still try out lower MM PE (I won't really recruit for MF/upper MM obviously due to lack of IBD experience) or go for an upper quartile VC/growth equity (think Sequoia or maybe lesser know funds)? Just wanted to compare the two kinds in terms of pay, upward potential, network etc...

My background: grew up in North Asia and speak native language there, went to semi-target UG and target master in the states, started in a Mega Fund-backed PE fund (~$300 MM) and now in a SOE PE (AUM $10 bn+) but hate the culture here

Thanks a lot for your time

Jun 19, 2018

Could you elaborate on why SOE PE is bad? I have friends who did it who thought it was OK.

Jun 20, 2018

Eric - I am not sure which fund your friend is currently at but I have friends who are working at two different SOE PE funds and absolutely hate the culture there. One went there from a major foreign powerhouse and the other was a former banker in NYC.

My fund used to have a team brought by former group head of BB IBD and that particular team disassembled within a year. OP would probably have better answers than me, but from the way I see it, extremely bureaucratic culture and incapable leadership seems to be insurmountable and hard to swallow for junior guys like us, no matter how many headline deals you are being staffed on.

With that said, though, a GS banker just landed our team and he seemed to be fine with it. So I guess it depends on person.

Jun 21, 2018

Assuming your current shop is reputable, my advice is to get an interview with the best PE shop you can get as once you get an interview it is a level playing field, and whether you get the job or not is purely based on your performance at that point in time. i.e. don't limit yourself to just lower MM PE. However depending on how long you spend at your current and previous shop, people might question why you are constantly moving and therefore your judgement skills.

In terms of pay, upward potential, network - I would say all 3 are correlated to size of the fund. Pay is driven by AUM and management fees, more AUM means more mouths to feed and therefore progression (to a certain point) is quite linear, assuming strong performance and larger funds interact with larger companies which generally attract better talent as they can afford to pay their employees thereby building a better network. This statement is based on complete generalities obviously there are exceptions.

I see people give advice on this forum about joining smaller funds with head room, more responsibilities, etc etc. But such a move is purely based on an assessment of risk / reward. I.e. carry is not guaranteed, if you join a smaller fund you are likely getting paid less and if you don't convert the fast promotion then you become significantly worse off with no brand name and less pay during the period. However each person's risk appetite is different so only you can judge that based on your personal situation. Also people underestimate how much life is easier when you don't have to worry about all the admin / back office tasks that get completely taken care of for you in larger funds. Some people may not value that but I definitely do haha!

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Jun 22, 2018

Thank you Frost. Really appreciate your answers. I had some ill-considered moves so I really need to revise my path and approaches.

A couple of follow-ups:
1. I want to be realistic about my expectations and came to the conclusion that MF/upper MM funds might be a reach for the moment. Had a few banker friends from NYC, SG and HK and saw them struggle quite a bit. They were top and middle bucket analysts from their respective BBs and they have been hunting almost desperately to find a solid top shop (like MF, Warburg, etc). That's why I lowered my expectations after they eventually settled for decent yet not top shops

  1. Completely agree with your point about going to a top PE/VC fund and get the brand name, pay. I failed to realize that and now try to catch up. Trust me, I hate the admin/BS mundane tasks as well...But here's my question, what's your advice on picking a "second best/third best" option, say if Sequoia caliber firms failed me? I will be meeting with a few partners in different funds. I would take some in a heartbeat for their brand name, partners and AUM but I would think over twice for others. So I guess the key question has therefore become: "who are better bosses/partners?"
  2. I guess the third question is related to the second. What kind of investors do you think are more likely to succeed? I am talking about former bankers vs consultants vs corporate execs. I realize this is very hard to answer as it entirely depends on individuals and part of it depends on luck more than anything but I thought you may have a question to that

Thank you again. I found your answers very insightful. Greatly appreciate your advice.

Jun 19, 2018

Hey guys - work went from 0-100 so for those who have PMed me I will get back to you when I can. Similarly for comments on the main board. To the extent that you can, please post on the main forum,

Jun 19, 2018

Thanks for doing this-as someone who is from India looking to get his MBA from US and then get into IB in US>2 years in IB>PE in APAC which schools should I target in terms of nextwork, opportunities and prestige. Top 5is very hard so will 6-20 help achieve this goal?

Jun 21, 2018

I think getting into IB post MBA shouldn't be too difficult, bearing in mind the difficulty increases the "lesser" the school.

However post MBA you should be going into IB at an associate level which makes it more difficult to transition to PE, not saying its impossible but you may have to take hair cut in rank when you switch over.

I don't know what you current background is but if you have work experience in IB / finance already I would consider just going straight to PE post MBA.

Jun 22, 2018

My background is Consulting+Finance(GS/MS IB Ops). What did you mean by haircut in rank? Is Associate IB(US) to Associate PE(Asia) post MBA not possible? Also, if you could throw some light on how you moved from US to Asia-?Thanks

Jun 23, 2018

I am going to PM you in regards to headhunters for a region. Regarding the recruiting after 2-4 years rather than two and out, would you recommend staying with the bank with whom one did their analyst years in the states, transferring internally to a target city to get to know the region and then start looking at PE recruiting? Thank you for doing this, SB-ed.

Jun 23, 2018

For non-Americans, how feasible is it to transfer from MF in Asia to the US after a few years?

Array

Jun 24, 2018

There are a lot of variables that go into this. Really depends on the firm, culture and your performance / standing in the firm.

I know of people that have wanted to move and got it but equally I know people who wanted the move and couldn't get it.

Jun 26, 2018

Was just wondering how many of the people in the MF you met come from a local background (Asia) vs overseas for undergrad.

Jun 29, 2018
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Jul 2, 2018
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