Private Equity in Singapore

From what I understand, there are some international shops operating out of Singapore, focusing on emerging markets i.e. Indonesia and Vietnam. Hope to understand more about PE in Singapore by hearing more from those based in Singapore - firm culture, deal flow / ranking compared to other shops, and also the recruitment process

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Jul 24, 2020 - 2:06pm

I spent some of my Pre-MBA PE experience based out of SG and covering SE Asia and am looking to return post MBA. There are a handful of threads on here about PE in Asia in. general, which are worth reading, though those are more geared towards HK / China coverage. I'll do my best to provide an overview of the market based on what I'm aware of / my experience.

Every MF covers SE Asia at this point, with about 75% of them having a Singapore office dedicated to it, while the balance 25% cover SE Asia from Hong Kong. In MF I'm including the likes of Advent, TA, Apax, CVC etc, which are much smaller than KKR, Blackstone, etc from an AUM perspective but on an international level compete for the same types of deals. Similar to the US, they recruit for Associate level roles from the large banks (all of which have a presence in SG) as well as from the MBB consulting firms. That said, you get a mixed bucket of backgrounds, with people moving from NY, London, and India IB roles to Singapore PE fairly frequently. The IB experience in SG itself a sweatshop culture pretty much across the board. I didn't work in banking in the region, but there are some recent threads here discussing just how bad it is.

Firms: Apart from the MF listed above and others (TPG, Warburg, Carlyle, etc) there is also a presence of international funds / pension funds -- CPPIB, CDPQ, OMERS, global names like Actis and Partners Group, and "regional MF" like Barings, L Catterton Asia. Going down a bit in fund size you have players like Creador and Navis (I believe both have SG offices still), which invest across the region but more at a mid market level. If you go further down from there you usually end up with country-specific investors, i.e. a fund that only focuses on Indonesia or only Vietnam / Thailand.

Deal Flow: The region is quite nascent still, and there are a mix of deals through bankers but also a fair number of proprietary deal-flow that happens. In most of the countries in the region, established families run the leading businesses in the country, and things are very much relationship based. In this sense, having a local person on the investment team can be extremely helpful, and that is in high demand at the moment, particularly Vietnamese and Indonesians, which also helps due to language constraints. The vast majority of the deals happen in Indonesia (and Vietnam more recently), with significantly less in Philippines, Malaysia and Thailand. Even the larger guys like KKR and TPG would rarely see investments above $500mm, and for deals coming through intermediaries, these would be hotly contested between all of the MFs as well as the regional MFs like Barings. Another important piece to add, is that most of the "PE" activity is growth capital investments, and buyouts happen quite infrequently. There is significantly lower use of leverage in transactions, and the modeling experience you would get as an Associate is going to be significantly less financially complex than what you would do in the US or Europe. From a business standpoint, however, it might be more complicated, as they can be fairly messy. As I'm sure you can imagine, there are huge corporate governance issues in many of the companies and in many of these regions, and professionally run businesses are few and far between, so a lot of the diligence is focused on governance / it isn't uncommon to do a thorough forensic diligence on top of the other workstreams.

Recruiting: as mentioned earlier, there is a preference for local hires from Indonesia / Vietnam, both because of their connections as well as language skills. On top of that, there is a recent big push by companies, driven by the government to hire local Singaporeans. This is more of a nationalist move than anything, as they don't speak any language from the region, and probably less than 5% of the transactions take place within SG itself (i.e. you are based in SG but only invest in the other countries in the region). This is making it more difficult than it has been historically to get an Employment Pass as a foreigner, though the US is doing the same sort of things, so I guess can't really complain. In terms of recruiting itself, there is no "on-cycle" that I've seen like there is in the US. There is no requirement to do an MBA, so people are promoted directly, and that means that seats open up only when someone moves out to another role / leaves the industry. So it's important to be in touch with the recruiters regularly checking in and make sure you get into the processes as they launch. Processes are long / drawn out over multiple weeks and include 1-2 case studies as well. Relative to the US, there is a larger emphasis across Asia on technicals vs. fit, in my experience. Happy to answer any other questions to the best of my ability.

 
Jul 24, 2020 - 4:22pm

Thanks, great overview. So would you say it's impossible for someone to land a gig without speaking an Asian language? Love SG and would love to work there for a little (currently in US IB)

Array
 
Jul 24, 2020 - 4:31pm

Not impossible at all (I was in the exact same position as you, no Asian language / not local, though I moved through an internal role and didn't recruit from outside) but it is becoming increasingly difficult in the last 2-3 years in particular.

If you're in NY at a large bank, some of the Singapore MFs run processes through the NY headhunters or at least used to back in the day. The other thing to consider would be a 3rd year as an analyst through your bank in the Singapore office (if you're at a global bank), though those teams are quite small so it may be challenging to get a spot. At the least that would show your interest in the region, allow you to build some market knowledge and make it an easier sell for a fund to bring you on.

Feel free to PM me if you want any more specific thoughts on how to approach it, names of recruiters etc.

 
Jul 24, 2020 - 4:56pm

Good to hear, and appreciate the offer to help - a bit too early in the process for me but will definitely follow up if I get more serious about checking out SG.

Lateraling is of course an option, but if culture over there is across the board sweaty I'm not sure I'd enjoy it. Would want to spend my weekends on Sentosa, not in the office!

Array
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