Investment Banking: New York vs. Hong Kong / Singapore

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Wall Street has, for a long time, been considered the gold standard for investment banking. Recent developments (err... underdevelopments) of the US economy, however, have caused speculation that the central hub for future finance lies outside the US (with a lot of people betting on London).

How does New York Compare to Hong Kong

  1. What do you think the tradeoffs are between current opportunities in the two regions in terms of:
    • Compensation
    • Training and transferable skills
    • Interesting work and project exposure
    • Exit opportunities (including bschool, lateral transfers, geographic transfers, and industry transfers - PE, etc.)
  2. How will the comparison between the two regions look in 2 years? 5 years?
  3. What is the current US perception of banking in Asia? Is it still considered inferior to Wall Street?

OP continued at end

This post was originally created in 2007. To see a more up-to-date discussion, check out these posts:

OP continued:
I'm interested in comparing New York to Asia (Ex-Japan).
With 4 of the 5 fastest growing economies situated in Asia, I can only imagine that the banking industry of the region will follow a parallel boom. It's been a very very long time since the US has seen double digit economic growth. On the other hand, China still needs to increase its economy 700% to even catch up to the US. Naturally, there is a lot of development needed (but, in turn, also allows a lot of room for development -- unlike the stale market of the States). I strongly believe that it will take at least 1 year for the current effects of the credit crunch to subside, and definitely more than 1 year if the banking industry is to recover to the level it was at before the meltdown. Because of current conditions (the USD is weaker than the CAD! Gasp!) it seems like a perfect time to look for opportunities outside the States.

Comments (37)

Nov 11, 2007

It's a very different beast.

I'm always surprised that so much interest in HK. Yes, it has a lot of direct flow from China but it is still very inward. Nepotism is rife as the market hasn't really opened as yet. I'm not sure skills from NYC would be transferable in a true sense.

A lot of the deals getting done are still done internationally; Sydney, London and Japan. Even still, it is a very different market.

I would say London and Singapore would be a lot more hospitable.

    • 1
  • Aspiring_Consultant
  •  Nov 11, 2007

If we rephrase my initial questions to include all of Asia Ex-Japan (I'm primarily interested in both HK and SG anyway), how would this mold your opinion?

I'm particularly interested in:

What are the exit opportunities coming out of HK or Singapore versus coming out of NY (primarily, bschool opportunities)?
What is the current US perception of banking in Asia? Is it still considered inferior to Wall Street?

Nov 11, 2007

I am from HK and I don't think USA is hospitable to Asians like me also. What I notice is that ENGLISH is the only skill that counts in the US; all other skills are not important to US employers at all. I am a college senior and have been rejected by many local employers after first round interviews. The only skill that I don't have relative to local kids is just the ability to speak English like a native. I have a 740 SAT verbal score so I won't admit I'm bad at English considering I'm in the top 1% percentile.
When I was interning in HK and China during summers, I met a few Chinese kids who grew up in the US or were educated in international schools and couldn't speak Cantonese nor Mandarin at all. I mean, it's hard to imagine how they got in. The ability to speak English well enough is important in HK, but surely not as important as Cantonese or Mandarin. English is used mostly when HKers talk to other Asians who don't speak Chinese. As you guys may know, 99% of Asians that you see in Asia are not native speakers of English. So Americans should not have an any stratospheric expectations of our English skills. When I was young, I didn't understand why I had to learn English. At that time, we were under British ruling and my school even didn't teach Mandarin. Now that I've grown up, I realize how unimportant English is for most of the jobs in Hong Kong or China.
No offense.

  • Aspiring_Consultant
  •  Nov 11, 2007

That rant doesn't really address anything in my initial question...

Anybody else?

Nov 11, 2007

Overall, New York is much more prestigious than anywhere else in the world. It is the headquarters for almost all of the top investment banks and consider the mecca of the business world. That being said, I think your experience as an analyst also depends on what kind of deals you get the opportunity to work on. If you worked as an analyst these past 2-3 years in China, the ability to write down that you have worked on some of the largest IPOs definitely sets you apart from some of the New York analysts.

Personally, the only reason why I wouldn't want to work in Asia is because of the network that you establish overseas will be a lot less opportunistic than in the US. Coming out after 2-3 years as an analyst, I think the best opportunities will be from the people that you get to know, not completely contingent on the location written on your resume.

Nov 11, 2007

I had the exact same dilemma. I interned at a BB in HK this summer and received an offer. I was contemplating of doing U.S. recruitment again but eventually decided to go back to HK. I'm Asian American in the long term I want to settle down in the U.S., but going back to Asia right now is a trade-off instead of a sacrifice. The analyst programs in NYC are more structured and you will be focusing a lot on builing models. The exposure you'll receive to top management is somewhat limited and there are just so many analysts just like you. In Asia (HK), however, I think there's a good balance between the traditional analyst work and traveling and interaction with VP's and above. I also think it's easier to stand out in Asia especially if you are well-spoken and willing to take initiatives. Go spend a few years in Asia, if you are a top performer, your bank should be willing to send you back to the U.S. or to Europe upon request.

    • 1
Nov 11, 2007

hey estalol, which BB are you joining FT?

  • Aspiring_Consultant
  •  Nov 11, 2007

Albatross and estalol,

Thanks, both posts were extremely helpful. Not sure if either of you can speak to this, but, if so, please do:

There is obviously a very stark trade-off between the prestige of NYC and the deal involvement of Asia. How will this factor in to HBS admissions? Speaking about a large deal that you were intimately involved in would definitely bolster the strength of your essays - is this enough to overcome the difference in perception between the two locations?

(I would assume that either position would be a sufficient launching pad to Wharton or Chicago and I know that Stanford dislikes ibankers in general -- with Asia being more 'unique', thus probably more desirable for Stanford -- but I'm especially curious about HBS.)

Nov 12, 2007

From what I hear, HBS is in a league of its own when it comes to admissions. You almost certainly need some sort of higher authority recommendation on top of perfect scores and an amazing resume. I know a close friend who told me that a girl he knew who came from a smaller liberal arts school and work experience as a translator for 8 years got in... the thing is, she was the official translator working under Zhu Rongji, the Premier of the State Council for China. (Kind of like Alan Greenspan writing you a personalized rec letter)

  • b
  •  Nov 12, 2007

I spoke with a comical guy a little while back (HBS, GS, Bain alum) who told me that six types of people get into HBS:
1. Your last name is Kennedy, Archibald, or Romney
2. You get a recommendation from a Kennedy, Archibald, or Romney stating that you will be a future leader of the world.
3. You worked at GS/MS or M/B/B.
4. You went to a impoverished country became tribal leader of a small village.
5. Your dad is the CEO of a fortune company
6. I forget what the sixth was...

Unfortunately M/B/B have already rejected me and GS/MS won't even look at me. I'm considering between JPM and Lehman, but GS/MS is just in a different league...

  • b
  •  Nov 12, 2007

To get back on topic, however, I'm curious: Do people think the "prestige" factor of the regions will change in the near future? (2 years, 5 years, 10 years?) Does the recent credit crunch (as well as the not-so-recent devolutions of the US economy) tarnish the allure of New York, and will the emerging economies of China, India, Russia, Vietnam, the four tigers, etc. cast a glimmer of mysticism upon Asia banking in the future?

Nov 12, 2007

Honestly, I applaud what you are trying to do but I think your eyes are a little too wide at the moment.

Asking if IB in HK/SG will get you in to HBS is a question that no-one can answer. Think a little shorter term. Will you enjoy being in a developing economy? The structure of banking in the Asian countries is very different to larger financial centres around the world. Speak to people that have been there, alumni etc.

Nov 12, 2007

I've never worked in HK or Singapore, but would you characterize those as developing economies? I would consider China and India as developing, but HK and Singapore should be pretty developed, I would imagine.

  • b
  •  Nov 12, 2007

I don't consider HK or Sg "developing countries"... Hong Kong's cost of living is 5th highest in the world. Singapore's is 14th highest. By comparison, New York is only 15th highest.

I ask for Wall St's perception of Asia Ex-Japan because I have no idea what people think of business in the area. I definitely don't want to box myself in to what will eventually become a dead-end. Basically, I need to make sure that IBD is actually considered at least as highly as IBD here (and not a situation where IBD Asia is comparable to Ops US and I would forever be stuck...)

ETA: This concerns me particularly because of the stark differences in perception of the consulting industry across waters. While MC is considered very prestigious here (and I would say that M/B/B even outshines all the non-GS/MS BB banks), the same sentiments definitely don't exist outside of our borders. In Europe, even M/B/B is considered extremely inferior to any ibank. Consulting might as well be a blue-collar job in Asia, for all the respect that consultants get there.

Nov 12, 2007

What the heck are you talking about? "Blue collar job"? Having actually consulted for MBB on a project in the region, I can flat out say that you are 100% wrong. All the kids from IIT/IIM in India and the top universities in China want to get into MBB. Ditto for Europe.

  • b
  •  Nov 12, 2007

I am judging based on sentiments from this board:
http://forum.top-consultant.com/UK/list.aspx
The very common sentiment of the largest consulting message board in the UK is that consulting is considered very sub-par to ibanking (search for any of the dozens of consulting vs ibanking threads). This sentiment differs from that in the States.

Working on a project in a region and actually working in the region are very different things.

Nov 12, 2007
b:

I am judging based on sentiments from this board:
http://forum.top-consultant.com/UK/list.aspx The very common sentiment of the largest consulting message board in the UK is that consulting is considered very sub-par to ibanking (search for any of the dozens of consulting vs ibanking threads). This sentiment differs from that in the States. Working on a project in a region and actually working in the region are very different things.

I just went to read that board. Those college kids in UK are even sillier than the ones we see here on this board, if that's any consolation....

Nov 12, 2007

Considered sub-par by who? You are really getting lost in message board talk. Forget how people rank things, you can't compare IBD in Asia to Ops in NYC because they are two completely different jobs.

Figure out what you want to do, not what will leave you highest on some pseudo-totem pole created by college kids on the internet. Speak to people at the firms.

  • b
  •  Nov 12, 2007

I've already spoken with people at both locations, and naturally asked them the advantages and disadvantages of working in either location verus the other. The impression that I get is that each location is very different; NYC is more structured and stiff, whereas Asia is more entrepreneurial, hands-on, and loose. Honestly, I could see myself working in either of these enviroments; I just want to pursue whichever will leave me better off in the long run.

Nov 12, 2007

having worked in MBB in both USA and Asia, I know the scene out there quite well. they are definitely not blue collar. How can it be blue collar when they recruit mainly from ivies, oxbridge and top asian universities? Also, you sound very indecisive and a bit stupid from your posts so far, and you do not seem to have done your research properly. M/B/B inferior in Europe and blue collar in Asia? Geez, i won't trust you with any research if I were your associate....

  • b
  •  Nov 12, 2007

Obviously "blue collar" was an exaggeration, to make the point that MBB is not nearly as highly regarded in other regions of the world than it is in the States. I doubt that a brief stint abroad gives you as much experience about the industry as a board full of people who have been working at these firms in the region for years. As I am not in the industry, my research comes from speaking with people that I meet - both in person as well as online. Obviously I am not going to know everything about ibanking and consulting in all areas of the world, hence I am asking. If I had already decided, there would be no reason for me to pose the question. I really don't see how this is indecisive or stupid at all.

  • movetofinance
  •  Nov 12, 2007

man, you're assuming these kids actually work at those places. from the sound of it they don't.

don't know where you got the idea that mbb isnt highly regarded in europe/asia, but i can tell you that you're off your rocker dude. they're even more prestigious in asia.

Nov 13, 2007

By the way, when I was speaking of a developing economy, I was more talking about the work you will be doing. Most of the work in SE Asia comes with a very different slant to work in NYC.

Nov 13, 2007

You should look at your own LT goals and think about your risk tolerance (not getting a FT offer from the PE shop)

Nov 13, 2007

^ I'm sure you'd choose GSIP over any other possible offer out there except for CEO at Berkshire

=========================================
We are excited to formally extend to you an offer to join Bank of Ameria

Nov 13, 2007

a

Nov 13, 2007

PJC's comment had a bit of hyperbole, but GSIP is still an amazing opportunity out of undergrad, and one that most people would take over other offers.

For the OP, I'd probably take the PE - no guarantee they're considering you FT, true, but if you prove yourself, they can recommend you to friends on the street who will doubtless be looking to do business with their new fund, and happy to take you on. HK IBD tends to be very looked down on, as it is notoriously easy to get.

Nov 13, 2007

I would say take the PE job. It would look good on a resume and you could easily use that to get into banking in the fall for full-time. Further, you would theoretically have a leg up for entering the buy-side if that is in your longer-term plans.

I spent 3 months in Hong Kong and I liked it but I couldn't live there. It seems like some of the knowledge that you would learn there would not directly translate in the US (such as the different financial markets). It costs firms a significant amount of time and trouble just to move peoples cubes (I've heard of 2nd years moving cubes) - it will be an even bigger hassle to move countries, but not impossible. I know people in the BAML office that interned in Charlotte but moved to NYC for full time

Nov 13, 2007

sorry if this comes off rude, but how do all these kids with little to no common sense get all of these offers?Seriously OP, do like 1 min of qualitative analysis, not that hard. You want to work in NYC, you have summer offer in NYC, you'll more than likely meet other people who work in IBD in NYC, your bosses probably know a lot of bankers or were bankers at one point. The contrapositive (working in HK), not meeting people NYC.

Nov 13, 2007

IPOs and capital raising are pretty big in HK, as there are so many companies (particularly from China)lined up for listing in HKEX. Inbound M&A is still in development as deal sizes are smaller and sometimes it takes forever to close (particularly in China) but each deal is quite unique in Asia.

In terms of culture, overall speaking the HK ibd scene is pretty diverse with capital market department and m&a have the higher portion of expats...lot of Aussies. Industry and regional coverage group are less diverse and it varies based on different firms.

Nov 13, 2007

why there are lots of aussies wkin in hk?

Nov 13, 2007

Aussie's capital markets are more developed and thus there is a need for professional talent from that sophisticated market. As a former British colony, HK is geographically and emotionally closer as well. Unlike US tax its citizen globally, Aussies will only need to pay HK income tax on their HK income, which is only 16% vs. 40% in Australia.

Nov 13, 2007

Bottomline on the compensation side is that the pretax comp is comparable or slightly higher to NYC (otherwise no one would come to HK and enjoy air polution), but factoring lower tax rate and housing allowance, the after tax comp is substantially higher at entry level (not the case for US citizens).

Nov 13, 2007
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Nov 13, 2007