Transfer to PE in Emerging Markets

Hi,

I'm interested in pursuing private equity in an emerging market, primarily for the experience (e.g., growth focus, unique ownership structures, cultural context, 'wild west' of investing) and because I love to travel / experience new cultures. I could imagine transferring as a senior associate either only for a year, or staying much longer, depending on how it goes.

I think India, or South Africa would be most suitable (business in English), followed by Indonesia, Malaysia (stationed in SG?) and the rest of South East Asia (e.g., Cambodia, Vietnam); other regions/countries such as China and LatAm may be tricky given language barriers - I only speak English, German, some Spanish/French and very limited Mandarin.

My background is - Native European, white (i.e., no EM background), top-university MSc, MBB in US and now PE Associate at a top-10 global fund in the US.


  1. Has anybody in the forum transferred from the US, or Europe to an EM? Would be great to learn about your experience/ process.
  2. What markets are most attractive for PE? Criteria could include, level of funding (over/under-funded), source of funding (local/foreign), regulatory environment (ownership constraints, corruption, etc.) deal-flow, market growth rate, etc.?
  3. What countries/regions are easiest to transfer to, given my profile above? Criteria include language for meetings, primary research, culture, trust, etc.
  4. Earnings and exit opportunity - i.e., would this be more of a short term experience gig, or are there long term opportunities and continuous learning potential?
  5. Salary, Benefits and Perks; this is least important, but useful to set expectations; I'm earning very well in the US and don't expect to keep my current salary level, even adjusted for PPP.

Thanks a lot for your responses.

Comments (12)

 
Jun 1, 2016 - 12:45pm
  1. I do see Europeans getting transferred over but they are usually transferred to Singapore/HK when the PE firm is expanding their global presence. In my opinion, the main reason why PE firms will consider taking a non local is due to their experience in the U.S e.g. M&A transaction experience. However, based on my observations, if you are non-local and non-Asian, the barrier to entry is quite high as the buyside industry is very small in Asia and there are tons of Asian bankers which they can hire from (they usually hire associates with 3~6 years of IBD exp, which is different from the 2 year norm as mentioned on WSO).

  2. Each markets have their own pros and cons and I will just briefly mention the main few points of consideration. You are also right that corruption is quite bad in the emerging markets and it appears that certain laws are not enforced. In addition, corruption is a no go for U.S based funds as they will need to pass the compliance required of them by the SEC.

Indonesia - Corruption. High valuation expectation by owners. Negative Investment List
Malaysia - Corruption. Political instability
Singapore - No corruption. No growth due to population size
Other parts of SEA - Limitation of foreign ownership e.g. Thailand. The rest of the SEA have deals that are too small as well.
India - High valuation expectation. Small deal size. Tough management team to work with (I do know that most funds would not consider India unless they have a local guy / local team presence)
China - Most funds will invest outside of China and then enter China through organic growth. Just look up the multiples on the stock exchange and you will understand why.

  1. I would say Singapore would be your best bet (that is if you can even convince any firms in Singapore to give you an interview). There are a lot of headhunters and MBA students e.g. INSEAD who are requesting for coffee chats with the people at the PE funds very frequently so it would be even tougher for you.

4/5. PE in general pay lower than BB IBD in Asia (even for quite a few of those global PE firms). If you are looking for those local shops, the pay will be much lower. Honestly, I would expect you to make significantly lower than what you are getting after paying for the rent and having a much lower pay in Asia. On the other hand, if Asia is where you would like to be in the long run, you can definitely try recruiting and see how it goes.

The following would be some of the PE profiles which you can check out.

Vietnam - Mekong Capital
Indonesia - Northstar Group (affiliated with TPG)
Cambodia, Vietnam and other EM - Leopard Capital
Malaysia - Southern Capital (MM LBO)
India - Everstone Capital

Hope it helps.

Long story short - The wild west is not fun if you are getting less than half of what you are getting now in pay if you can get in for some reason.

 
Jun 1, 2016 - 4:18pm

I am a 2nd year PE associate at a MF in Brazil (is Brazil still an EM or former EM? who knows). So I can help you a little with questions 3-5. Keep in mind that I am a Brazilian though.

  1. Language is indeed a barrier, I think you should cross out any countries where the main language is one you are not fluent.

  2. I believe there is long term potential for a career in an EM like Brazil. Teams are much smaller than the US and if GDP growth returns (or you choose an EM that is effectively growing), there will be significantly long term opportunities.

  3. Some funds (mine included) pay the exact same US$ amounts for their NY, SF, London, Brazil, China, India professionals. That is crazy money especially when you take into account the EM FX devaluation in the past couple years. Other international funds adjust compensation downwards but it is still pretty good, probably better than NY or SF when adjusted for cost of living.

 
Jun 2, 2016 - 9:36pm

Emerging markets PE (Originally Posted: 06/11/2010)

Anyone here have experience with EM PE? Would be interested to hear your thoughts.

 
Jun 2, 2016 - 9:37pm

Emerging PE Industry (Originally Posted: 11/06/2011)

I have to pitch a promising sub-industry for my entrepreneurial finance course (basically vc)... Any ideas?

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