Mainland China Opportunities post IB stint in USA

Hello,

Can anyone provide some insight on working in finance in Asia (particularly Mainland China)? I grew up in the US and am working currently an IBD analyst in the US at a bulge bracket firm. I do have the language capability to work in China.

I would be interested in either working for a western fund, or for a local up-and coming but reputable firm, Hony, Saif, CDH, New Horizon are just some of the names in China I've come across on the web. Any other key players I should look into?

In any case it may be better and easier for me to reach out to head hunters/ recruiters first. Who are the main headhunting firms in the region that recruit at junior levels? How hard is it to get in touch with firms/head hunters when one is based in the US? What is the recruiting process like?... I hear Asia P/E recruiting starts way later than in the US (Where things are picking up already...)

Other things myself, and I'm sure many others out there would be interested in knowing are
1) Differences in culture compared to US (maybe firm-specific?)
2) Exposure to senior people
3) Exposure to clients
4) Work-life balance
5) Deal-flow
7) MBA opportunities afterward
8) Compensation levels

Haven't seen many posts on this site in regards to this particular topic. Any insights would be greatly appreciated!

Comments (19)

 
Dec 5, 2011 - 4:37am

I don't have any insight into banking specifically regarding compensation but extrapolating from industry firms, compensation will be low (local pay) unless they put you on an expat payroll and I doubt they will do that for an entry-level position. I honestly don't see a good reason to go to China early on in your career.

 
Dec 5, 2011 - 8:08am

Language will be the least of your worries.

Doing business in China is by far the single-most frustrating thing I have ever done (ran local VC tech fund for 5 years). Legal recourse is a joke and so is trying to find out which copy of the books is legit. Its the wild east. But, if you enjoy pollution and backroom dealing I say go for it.

Hony is a great firm, probably the best. If I remember, one of their investments returned 100x (no that's not a typo). However, those firms you mentioned rarely hire people without solid mainland China experience (and there are plenty of them).

If would start in Hong Kong. That being said, quite a few firms are shedding their workforce now and expectations in China look grim.

Sorry, wish I could give a better impression.

 
Aug 17, 2018 - 8:18pm

conrath:

It really depends on your luck. My Chinese friend told me that the finance firms really don't like Bulge Bracket firms -- especially Goldman Sachs, something about being too arrogant and refusing to adapt to a completely different market with different ways of doing deals...
The alphabetical thing can't be serious... right...
Also they recruit alphabetically. So you're kind of screwed if you have a first or last name starting with X, Y, or Z because you're basically automatically a late cycle candidate. They will probably have found a match for the positions in the P or the Qs.
Array
 
Dec 7, 2011 - 3:03am

Appreciate the insights guys, where I am coming from is

1) It would be something different, challenging, and more exciting than what my friends/peers typically do post-IB (standard buyside route in US).

2) In the distant future, I actually want to settle down in US (quality of life is incomparable and I highly value my friends and family)

3) The more I wait, the greater the opportunity cost will be for me to take a risk like this

4) Even if working in China sucks, there is a distinct exit path I can take (b-school) and transition to something else

5) Besides all that, the potential benefits from my POV are: being at the forefront of China's booming economy (never mind the latest macro data I think China will rebalance itself and grow for years to come) and seeing the opportunities that come through, making connections (hopefully) with some of the more senior people and maybe even through client interactions, and forming friendships with people at the junior levels who will one day be the decision makers

What I would be interested in isn't necessarily confined to private equity but any sort of role that encompasses the points enumerated in #5. The pay thing is semi-discouraging...from what I understand, US buyside shops pay around ~250,000$-300,000$ all in... so is ~$150,000-200,000 USD/yr equivalent out of the question for any role that a 23 yr old with IB experience can achieve in China?

Also, what about the regional offices of the western buyside shops? Does anyone know of folks who have had luck recruiting for those Asia positions straight from US IBD?

Thanks again!

www.deepbench.io - Unlock the World's Knowledge
 
Dec 7, 2011 - 7:10am

For USD 150 to 200k, I hope your checking out western shops with regional offices. The trade off however will be apparent. Western shops carry a lot (and I mean a lot) of baggage operating in the mainland. Not just limited to western firm though. Recently some friends of mine at Japanese, Korean and Singaporean shops have been on the shit end of the stick.

Local, from my experience, is the exact opposite. Better pick of deals and more flexible management and less opaque financials. Then again, we had PhDs working for us at approx. USD 40k a year (not a typo).

Bottom line, if you have the money now and can stomach the lower quality lifestyle, go for the local experience. You'll be better off experience wise in the long run... Just be prepared for your local colleagues to exclude you for a while.

 
Dec 10, 2011 - 7:51am

AstonMartin:
Do these local shops even recruit overseas? From what I understand, even the regional offices of western PE firms are staffed with mostly local talent.

How would someone from the U.S. even enter the recruiting process for a Chinese PE firm?

Most local shops I know rarely have an office overseas, use overseas headhunters, etc.
Yes, local talent very common in western regional offices.

Best way, get on a plane. You need to be on the ground meeting people, networking like mad and immerse yourself in the business environment. Business in China, and most of Asia as I'm sure you know, is who you know and the relationship.

If you don't know anyone in Beijing, Shanghai or Shenzhen, I would recommend taking a few classes at Peking Uni or Tsinghau Uni. Most PE and government officials come from those schools.

Best of luck.

 
Best Response
Dec 27, 2011 - 2:19pm
  1. Local PE funds, especially those based in mainland, are unlikely to offer you global pay, meaning your 150K - 200K USD is not going to happen at an entry level
  2. Culture at local PE funds are very different from those western PE funds IMO. You can call it less professional, or you can call it more hands free
  3. Exposure to clients is typically good at both local and intl funds
  4. Hours vary from shop to shop but in general better at local funds. Hours at some international funds are worse than that of banking. Also depends on your MD on the team/deal. Say if you are working with a dick who is an ex-banker and he is using his sellside mindset to ask you to scrub the format of your MS Office doc, then good luck
  5. Deal flow is better at the local PE funds if they have the connection. Intl funds typical leverage on their brand name and reputation to get the deals. MDs at intl funds are prob. smarter but typically do not have the same level of connections vs ppl from the local funds on a personal level
  6. Reputable intl funds will kick you out in 2 - 3 years for MBA, and a few ppl that I know went to HBS and Wharton
  7. Recruiting is off-cycle for most local funds and intl funds with limited presence, but for megafunds such as TPG, Carlyle etc, they recruit every spring
  8. Getting in touch with HH is easy. There are many local HH (HK, BJ and SH) doing recruiting because there is no such thing called exclusivity between the PE shop and the HH
  9. Don't worry about the location issue. For intl funds, they will call you for interview and ask you to do model test and case studies in their NYC office, sometimes through video conference; for local funds, if you are really seriously considering the opp, I suggest you flying back at your own cost for a face-to-face interview in the last round
  10. Your chance for very local funds is slim as very local funds find analysts through connections. They don't even go through the HH
  11. If you want to eventually settle down in US, then you should probably stick with a PE position in US. Your Asian exp will prob be sth interesting but unlikely to add too much value if your LT goal is to work in US
  12. Your POV is honestly a little bit ideal. The friendship and relationship buildup in China is very diff from that in US IMO. It is not something that you can get done in a few years and even more difficult given that you grew up in US

I used to work for in IBD for a BB based in NYC and got multiple offers this past summer from both local funds and intl funds (all based in HK) and I ditched the offer from intl funds because:
1. I don't want to do Banking 200
2. I don't want to work for 40 additional hours a week with only marginally higher pay
3. I don't want to go back for MBA after 2 - 3 years
4. I don't want to analyze 200 targets and then have my MD tell me that we actually only do 2 deals a year
5. I don't want to send the investment proposal back to US/Europe to get the committee approved and get asked for retarded questions. This is an inefficient and regarded process. Most committee members back in US/Europe do not understand how business is done in China.

 
Jan 7, 2012 - 9:14am

You will need relationships to work in any of the names you mentioned.

Beef up.
 
Jan 19, 2012 - 1:47am

Wow thank you Ukon! Terrific post...

www.deepbench.io - Unlock the World's Knowledge
 
Jan 19, 2012 - 7:54am

Recruit for a foreign fund in Hong Kong, many of which also have offices in mainland China. KKR, CDH, New Horizon, Hony, Sequoia, CVC, TGP, Blackstone, Carlyle, Apax pretty much all have offices.

You won't be able to recruit into a Hony or local firm, but foreign firm should be possible PROVIDED:

1) You find the right headhunter
2) You have language capability
3) You demonstrate you are able to take on responsibilities far above your pay-grade

There is no handholding on anything in Asia. As a junior associate, or an analyst at an IB, you will undertake much much more responsibilities (e.g. client coverage) than counterparts in the US. Compensation is global pay. And really guys... no megafund anywhere is paying 1st yr preMBA associates 300k USD in this market.

HK megafunds / BBs will also give you a generous expat housing package that will range from 20-30k HKD / month on top of your global salary and bonus.

 
Jan 21, 2012 - 9:08pm

Great post, a quick question, i heard that if you want to actually Chinese deals in Asia nowdays you will have to be based in the mainland either in Beijing or Shanghai for most megafunds, such as KKR, Carlyle etc. my question is that megafund in Beijing still pays global pay?

 
Jan 22, 2012 - 6:03am

Summer Intern:
Great post, a quick question, i heard that if you want to actually Chinese deals in Asia nowdays you will have to be based in the mainland either in Beijing or Shanghai for most megafunds, such as KKR, Carlyle etc. my question is that megafund in Beijing still pays global pay?

Why pay an ex-pat "global pay" when you can get a cheaper local model that does the same job for less?

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