AMA: MM PE (~$1.5B AUM) Associate in Asia

Hi WSO community,

The forum has always been beneficial to me. Therefore, I decided to do this AMA to help others. I'm currently an associate at a middle market private equity firm (~$1.5B AUM) in Asia.

My background is relatively typical: top 4 undergrad in China, two years at tier 2 consulting firm, and then three years at another MM PE firm (~$2.0B AUM). I was applying for MBA last year. Unfortunately, I got rejected by HSW (hard for Asian male, damn!) and only received other M7 schools (Kellogg/Sloan/CBS). So I decided not going to business but joining my current PE firm.

Feel free to ask any questions and I will try my best to answer.

Comments (28)

Jul 26, 2018

How's the comp in HK/SG for MM PE?

Jul 26, 2018

I'm based in Shanghai. My package as an associate is $200K in total ($100K base + $100K bonus). My peers at MM PE in Shanghai and Beijing are roughly the same: $80-120K base + $50-120K bonus.

I think cases in Hong Kong are comparable. I don't know how's the situation in Singapore.

    • 2
Jul 26, 2018

How'd you go from T2 consulting to PE?

Jul 26, 2018

I went to a shop where most of our work were CDD projects for PE clients. It was obviously an advantage for me because I could actually talk about those experiences during my interviews.

Also, situation here in Shanghai is bit complicated. Like 30% of PE firms in China are based in Shanghai (another 30% in Beijing and 30% in Hong Kong) but there is barely BB/MM/EB banks in here (most of them are in Hong Kong). Therefore, it is kind of a tradition for PE firms in Shanghai to look at consulting candidates.

    • 1
Jul 27, 2018

What were you thinking of doing post-MBA? I mean, getting into one of the M7's is pretty good, and I suppose you can try applying to HSW again, but just curious what you're trying to accomplish that you can't do with some of the M7's.

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Jul 26, 2018

I was looking at Mega/Large Cap/MM PE in China for post-MBA.

There is no mandatory requirements for PE associates here in China to have a M7 MBA. My peers go to business schools mainly for long-term networks. HBS is a bless and Wharton also helps. For other schools, I think I could have alternative solutions for the networking in the future.

Jul 27, 2018

Do VPs have sourcing responsibilities at your fund?

    • 1
Jul 26, 2018

Yes. They usually spend ~30% of time in sourcing.

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Jul 27, 2018

I thought China was a top 3 undergrad (Beijing, Tsinghua, Zhejiang) system with a C9 school acting like the Ivy League

Aside from CDDs, what type of projects/clients do China-based consulting offices have?

Jul 26, 2018

No. Traditionally the "top four" schools in China are the four target schools for IB and consulting. There are two in Beijing and two in Shanghai. Zhejiang is a decent school but not one of them.

I was in the Shanghai office of a global tier 2 consulting firm (think L.E.K./Booz/Parthenon). Aside from CDD, we also did portfolio growth strategy for PE clients.

Jul 31, 2018

What line of consulting did you do and what line is typically most desirable in PE?

Jul 26, 2018

I did "private equity advisory", most of which was CDD works. I think CDD projects experience definitely helps when it comes to PE interviews.

Still, I think the brand name of consulting firm is the most important thing. Bain, always the most desirable for PE, followed by McKinsey. I came from a tier 2 firm and that means it's much more difficult for me to get or pass an PE interview.

Jul 31, 2018

Do you often see people in PE move to senior portfolio company roles? If so, what role do they usually do and what tends to help them qualify?

Jul 26, 2018

No, actually I saw the opposite.

I am mainly focused on consumer and retail. There are several cases that executives from corporate side come to consumer-focused PE firms as Principal or even Partner. Very instereting.

    • 1
Jul 31, 2018

Thanks for doing this. I was wondering what are your thoughts on someone with native Chinese skills (written/speaking) and good understanding of the Chinese culture/trends moving back to China having done 2 years of IB stint in the US with a BB/EB? How do you think the work you do right now compare with that of a MM PE shop in the US, in terms of responsibilities, life style, and future prospects?

Jul 26, 2018

That's totally feasible. I have many friends who were on Wall Street then came back to major PE firm in Shanghai and Beijing. If a PE firm is hiring an associate from IB, they usually don't care whether you're from JPM Hong Kong or JPM NYC.

I think in China, more deals are from emerging industries than in the states because SOEs dominate traditional ones. I guess more than ~60% of PE deals are TMT/Consumer related and another ~30% are from Healcare. As USD PE firms, basically you can do nothing with O&G, industrials or traditional manufacturings.

    • 2
Aug 1, 2018

If I go to UChicago, is there any chance I can break into a good PE firm in China?

How good does your Chinese have to be?

Jul 26, 2018

Firstly, few people get into PE straight out of college. Most have to do IB/consulting first. UChicago is great and Booth has a very good brand name here in China.

Fluent Mandarin is a must.

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Feb 20, 2019
Dorsia Board Observer:

Fluent Mandarin is a must.

Not surprised, but that's too bad.

Aug 2, 2018

What made you want to jump from MM PE to another MMPE?

Jul 26, 2018

I was at a MM Euro fund. Euro funds are typically bureaucratic and relatively underpaid in China. Now I come to a dollar fund and things are becoming better.

    • 1
Aug 2, 2018

What are your thoughts on homegrown chinese consumer brands versus importing Western brands into the Chinese market? Historically, Western brands have had an easy time marketing themselves as luxury goods in China (although not necessarily the case in the Western world), but is that trend likely to continue? If not, what are some fast-growing Chinese consumer brands that may be exportable to Western nations?

    • 1
Jul 26, 2018

Good question!

If you look at Chinese market today, it is more or less similar to Japanese local market in around 1980. Per capita GDP reaches $8,000-10,000 and local brands start to wake up. A lot of local consumer good brands, e.g. Uniqlo, Muji, were founded around 1980 in Japan. More importantly, local consumers are willing to the same price, if not a higher price to local brands.

New founded local brands are seen in every category, from cell phone to clothing, from F&B to services. For those brands, they are all focusing on local markets and Chinese local market is huge enough. So there is less motivation for them to go abroad.

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Jul 27, 2018

Hey, I actually just finished listening to the Acquired podcast special on Xiaomi IPO, where the two VC-b/g hosts had two other VCs from GGV that are focused on the Chinese market as guests. They mentioned similar points as your above post - that there is a change in mentality and acknowledgement that local startups and technology are capable of, and are churning out innovative products that can go toe to toe vs. other Western players.

They also mentioned one of the founders of Xiaomi looked at uniqlo/muji as inspiration (a local brand that built on quality and has gone international). But one point they mentioned that while people are working hard for their firms like Japan and Korea like the 80s/90s, they argue that a lot of people doing this are more and more likely at startups or large tech firms (for the potential of future growth, or career development) vs large SOE or conglomerates (as in they are gunning for the next wave of options or growth vs. the large stable jobs).

In case anyone is interested:
http://www.acquired.fm/episodes/2018/8/5/season-3-...

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Aug 19, 2018

Do you mind sharing the recruiting process for PE in China (SH/BJ)? How many rounds of interviews and any modeling test? Thought technical is highly sought after for PE roles in the US - is it the same in China?

    • 1
Jul 26, 2018

A standard interview process usually goes like this:
1) (optional) talk with a head hunter: genenral background talk, motivations, etc.
2) pre talk with a VP / Director: talk about your deals, simple "400 Questions for Investment Banking" topics, motivations, etc.
3) modeling test: usually 3-4 hours, LBO / growth, from scratch / with instruction, with / without writing a five page IM
4) (optional) case study: they give you a case study, a real deal that you need to work out every thing including desk research, modeling, and IM. Usually you have one week to complete this
5) super day: you meet literally everyone in the team (VP and above), talk with them like 30 minutes each
6) final: talk with the key person, usually Managing Partner or Head of China (for global funds). Convince him to hire you as an associate
7) offer: negotiate the offer package, third party background check, etc.
8) resign, have some fun and get on board

Feb 19, 2019
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