What you need to know about IBD in Asia

CentralBanker's picture
Rank: Gorilla | 659

Hello monkeys, any opinions/takeaways about investment banking in Asia? Here's what I have gathered from reading various threads on WSO:

Hong Kong:

  • Usually takes most of its analysts from top US/UK universities, although I heard recently they're taking grads from top local, Asia and Chinese schools.
  • Takes summer analysts from local universities (CUHK, HKU, HKUST) *Credits to @whiterabbit
  • Hires mostly from its summer class.
  • Works longer hours (Even more than NY) The hours are absolutely brutal. Chinese culture is all about hard work and it shows. *Credits to @Ash Ketchum
  • Comp is large across the board (even in some cases larger pretax comp than NY, but due to rent and cost of living, effectively it's less than other places.)
  • Chinese / Mandarin is a must. Edit: Apparently not a must if Korean or Japanese, thanks @whiterabbit and @whiterabbit. In addition, lots of translation as a junior and you need to write and speak well mandarin, which is a hard task for non-native Chinese.
  • Great emphasis on connections and relationships.
  • Many IPOs and capital raising here.
  • Large client interaction, even at the analyst level. Many trips to different places since the deals are usually not with HK firms.
  • There is also a lot less collegiality and a lot more zero-sum-game thinking, backstabbing and other unpleasant behaviour. (Applies for China too). *Credits to @SSits
  • Lots of translations and menial tasks. *Credits to @Ash Ketchum

Shanghai/Beijing:

  • I heard they only take native Chinese speakers.
  • Even larger dependence on connections. Nepotism is like wildfire here.
  • China's stock market (blue chips) is in Shanghai
  • ChiNext and SMEs are in Shenzhen.

Singapore:

  • I assume it's the same as Hong Kong, but you can probably get by without knowing Chinese, since most of the deals are from SEA. Knowing a SEA language is definitely a plus (or even a requirement).
  • Many IPOs, fund raising, debt/equity placements and some M&A. Probably not as big as NYC, but very often in frequency. Especially with Singapore being the financial center for SEA (Indonesia, Malaysia, etc).
  • Quite difficult if not a local, especially for analyst gigs (since they want the entry-level jobs for their own grads). Post-MBA associates will mostly be from US schools *Credits to @srangoon

Tokyo:

  • Japanese is a must, BBs probably don't take non-native Japanese speakers.
  • Comp is comparatively low to HK and Singapore
  • Work Culture is bs here. Lots of kissing asses, seniority culture (e.g. you can't be older than your boss, stuff like that)

Feel free to add/subtract stuff or make any corrections.

Comments (74)

Feb 20, 2017

Just want to add some observations for HK:

  • Yes, they take summer analysts from local universities too (CUHK, HKU, HKUST in no particular order)
  • Chinese / Mandarin is a "must" but sometimes exceptions can be made for Korean / Japanese speakers

Thanks for sharing @Dealova" !

    • 1
Feb 20, 2017

Singapore - they will take mostly local grads at the analyst level. Post-MBA associates will be mostly from US schools, not much love for Int'l schools. Focus will mostly be debt/equity placements and some M&A (not as much as you seem to think). They will always advertise as Mandarin or SE-Asian 'preferred' but it's a long shot if you don't speak one at a native level and they won't be shy about making assumptions based on your name/ethnicity. You can get in on just English but it will be a hustle

    • 2
Feb 20, 2017

There are a few firms / groups at HK that don't require you to speak Mandarin/Cantonese, a number of groups at Morgan Stanley speak English almost all the time.

Feb 20, 2017

Its usually at product group or maybe only at capital markets or hong kong coverage. Not all deals are china related but firms and headhunters always prefer someone fluent or even native in mandarin. It is not undoable (i cant speak fluent mandarin either) but rather difficult

Feb 20, 2017

I spent a short period of time in hk and i guess i can share a bit of my observations

Us grads represent the largest % of the class (undergrad + masters with chinese uni undergrad combined), china uni and local big 3 comes second (most are chinese students rather than local hker though)

Uk schools are not so represented except at a few European shops

Hours are pretty long but team dependent, and i cant say much

Pay as analysts are quite standard but difference can be huge at associate or above, analyst at most shops with structured recruiting pays the same (7k base + 2k housing prebonus), except for one or two banks

Chinese and mandarin is not a must if u are a korean, but in general being a native chinese is more preferable to a hker or an amateur mandarin learner. Lots of translation as a junior and u need to write and speak well mandarin, which is a hard task for non native chinese

Yes, quite a lot of ipo but the market is shrinking so there may not be so many mega ipos in the future. Chinese banks (cicc citic etc.) are competing aggressively and u can check out the recent bloomberg or wsj news on asia ib revenue

And u do get quite a lot of interaction if u work at a top bb here.

Sorry for the poor formatting, typed on my phone

    • 5
Feb 20, 2017

Oh btw, although the stock market in china is in Shanghai, banks and mega funds in china are mostly located in beijing and only a few bb have significant presence there

Feb 21, 2017

Great breakdown- thank you! Would love to see something similar for Switzerland/France/Germany.

    • 1
Feb 21, 2017

Will probably try to make one of these for those countries, although, I'm not sure how prevalent IBD is in Switzerland (Other than CS) or France.

    • 1
Feb 21, 2017

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."

Feb 21, 2017

HK - generally the expectation and practice is for Analysts to stay 3 years, not 2, before going to the buy-side (at least that's been the experience of all my friends who did their analyst stints in Hong Kong). It seems the thinking is it's better to be promoted to Associate before heading off to you next endeavor.

Feb 21, 2017

I'm at a BB in Hong Kong (think JPM/MS/GS) and agree with pretty much all that has been said already. In terms of Mandarin, it is a must for all juniors to be native speakers with essentially all product and industry juniors can read and write Chinese at our bank.

Confirmed what other users say in that the hours are worse here than in NYC. Environment is also less bro/frat culture with most of your colleagues being really serious with their heads glued to their monitors and not a lot of joking or messing around, even later into the night when MDs aren't around.

Total comp (at junior levels) is lower here than in NYC mainly due to taxes (income taxes here are bt 15-17%).

A great aspect here in HK is that you get a lot more client interaction than in NYC at the junior ranks (I know of some 2nd/3rd year analysts having regular dialogue with clients). This is mostly a function of the deal teams being significantly smaller and and so you aren't just a cog in the machine and aren't siloed onto a specific part of the transaction. With this you get to understand the transaction process more holistically but the downside is, you may be a bit less technically capable than some of my peers (this is my personal experience) in NYC. I'm fine with this to be honest as I enjoy helping my VP run the transaction, see where the bottle necks are in the process, making sure the strategic rationale is on point than being a DCF expert to the nth degree (there are diminishing returns for being an excel monkey as you progress through the ranks)

And now the lost important part, the night life. The night life in HK is fantastic with great raucous bars and clubs in LKF And Wyndham street (tilted towards the 20-late 20s age range) and also low key lounges and bars in central/Soho And sheung wan areas. Then there are those nights you want to be debaucherous and you pull all nighters in Wanchai.

The biggest downside of HK is that it's expensive as fuck to live here with rent as expensive as NYC but the flats are 10-15% smaller, but you make up for the COL for the low taxes jurisdiction.

All in all HK is a great place to start your career and to grow it if you want to focus on China and can speak Mandarin.

    • 6
Feb 21, 2017

Hi, do you mind if I PM you? Would like some advice on my situation.

Feb 21, 2017

Region: CLMV (ASEAN)
Function: IBD Coverage Group
Client Base: Mostly large local corporates (LLCs) and large SME (small & medium enterprises).
Function: Capital Markets (IPO, OTC/Pink Sheet, RTO, Project Finance), Corporate Finance (M&A, Restructuring, Government Privatization), Principal Investing (Merchant Banking)
Main Sectors: Generalist (Consumer, Real Estate, Industrial, FIG); most Southeast Asian bankers will be expected to cover at least 3-4 sectors. Same thing with my friends in Hong Kong, Singapore, and China.
Hours: 9-5pm (Monday to Friday) but if you count wining and dinning clients, golf sessions, business trips, informal catch up sessions over the weekends then I probably end up working 6 days a week, average 12 hours per day
Staff Demographic: oversea returnees, big four advisory, speak local language + English + Chinese
Career Progression: Intern > Analyst > Associate > Senior Associate > VP > Associate Director > Director > MD > Department Head > Executive Director > Partner
Unique Thing about my Firm: is a family office backed investment bank under their financial services group > so we end up advising the group businesses as well > and also do direct investment on behalf of the family office
Exit Strategy: 1) salaryman > move to Director, 2) move to PE, 3) move to client side as CEO/CFO, 4) buy share in the company to become a partner and 5) set up my own fund

    • 3
Feb 21, 2017

Those hours are amazing, super jelly of you.

Feb 21, 2017

If anyone expect me to work 20 hours a day I am out of the door.
Been there, done that.
Not doing that no more.
Lol.
:)

Feb 21, 2017

So basically there's no way to work in Asia if you only know European languages? What about other financial jobs besides IBD? How are the language requirements in Singapore?

Best Response
Feb 21, 2017
tar0n:

So basically there's no way to work in Asia if you only know European languages?

Why don't you learn Arabic and go to Latin America?

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."

    • 15
Feb 21, 2017

you have to think about what value you are bringing to the table that they would hire you vs a local who likely costs less to hire, can speak the language, and is at least committed long-term geographically. Especially at the analyst level, there is no reason they would hire you. Now at more senior levels, even at assoc, I have friends who started at european banks (Soc Gen, BNP, etc) and transferred to the Singapore office who have zero asian language skills but they are usually there because the local team needs reinforcements and they are a proven commodity.

Feb 21, 2017

There are a large number of relationship hires in Asia eg "We'll hire your ne'ER do well son in return for you promising to mandate us on your IPO".

At a junior level, this means you can commonly be working alongside muppets. You can then be hit with the curse of competency - if you're the only competent analyst in a team of 3 - 4 other analysts who are dumbshits with good family connections, then you end up doing all the work.

In Hong Kong/China, at least, there is also a lot less collegiality and a lot more zero-sum-game thinking, backstabbing and other unpleasant behaviour. This generally fits the management strategy commonly used in China culture where there is an emperor with multiple princelings with overlapping territories, constantly at war with each other and jostling for the favour of the emperor. The emperor himself is paranoid that a princeling will take over, so this strategy works well for him. And many relationship bankers in China IBD are nothing if not venal characters tempered by paranoia and suspicion.

Combine both these considerations and you can find yourself not only doing all the work due to the curse of competency, but then seeing others claim credit for your work and stabbing you in the back.

If you grew up in the culture, you'd probably see this as a rational system. If you've grown up in the West (even if you're ethnically Chinese), you can find it frustrating, even if you've read the Art of War and think you get it.

The Romance of the Three Kingdoms is better guide to the personalities you'll meet in Chinese business than the Art of War.

    • 9
Feb 21, 2017

The hours are absolutely brutal. Chinese culture is all about hard work and it shows. These are people who went to regular school plus cram school for 10-12 hours a day since they were in middle school. Banking is just an extension of their school life. They know how to grind and work hard.

We were advising a large PE client and they were ridiculously demanding. Impossible tasks are given at 5pm for completion by tomorrow morning almost daily. The guys running the deal on their end came out of the same HK IB system, and they have come to expect this level of work from their advisers because they went through it themselves.

Banking has enough menial tasks, but translating takes the term menial to the next level. It's boring as hell. There is no financial analysis or critical thinking. You are literally working as a linguist. Sometimes you can outsource the work to a translation company, but they charge by the character and it's expensive as hell. A full 50 page presentation could end up costing something like a grand (you may be able to bill it to the client though).

You need to be a native speaker. The ideal person is someone who finished high school in Asia before going to a top U.S. or U.K. university. That way, you get the best of both worlds. I find a lot of bankers there speak English with a Chinese accent. That's how good your Mandarin has to be. If you left Asia when in you were in elementary school, your Mandarin probably isn't good enough.

Back in the day you could get by without speaking any Mandarin. A lot of banks were staffed with Europeans and Americans who got by because they had a big brand behind them and supposedly brought in an international perspective. They could teach the local Asian companies how blue chip international firms did business. Nowadays, most of that knowledge is widespread and you actually have to know Mandarin to build relationships and win business. I have heard from people at a few different banks that there is a slow "purge" of non-Mandarin speakers in mid-to-senior level roles who are being replaced with people who can speak Mandarin.

Another interesting note is that Analysts are frequently seconded on site to work directly with the client. That way, the client can directly oversee the Analyst's work and also use him/her to help put out any day-to-day fires or menial tasks that they don't want to do. The client's site could be in Hong Kong where you can just walk across the street. Or, you could be seconded to some random city in China where you work out of a suitcase for a few weeks. I've heard of one case where the client demanded the bank send four analysts. Two work in the day from 9am to 9pm, and two work at night from 9pm to 9am. The night crew receives instructions from the client before they go home at 9pm, and turn in the work the next morning. They literally have the bankers work around the clock. Brutal.

    • 6
Feb 22, 2017

Would you recommend someone to start their career in banking in HK?

Feb 21, 2017

What about S&T in HK?

Feb 21, 2017

Interested as well

Apr 14, 2018

AMA

    • 1
Feb 22, 2017

I am just curious--is there a significant different among BB in HK in terms of exit opportunities to PE? And is it better to start in IB then transit to PE or start in PE directly?

Feb 25, 2017

Start in PE if you're sure you'll stick with the same firm in the long haul i.e Partner track. Go for IBD if you want to keep your career options open. In the former case, you're only given 1 chance (or perhaps 2 max) to change firms within PE or change careers. In the latter, you might be able to try out maybe 3 different careers before settling in one.
PS:- Talking about MF PE

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."

Apr 14, 2018

Search bar is your friend. Especially for easy shit like this.

    • 2
Apr 14, 2018

No idea why this dude got MS for that comment. Truest thing ever said. There are literally endless threads on this. Tier rankings, group rankings, league tables, they're all mentioned. Use the bloody search bar.

    • 1
Apr 14, 2018

Hi AJ, I can only share some personal opinion of banks dealing in the Southeast Asia (SEA) region. If you are looking to be based in SG, your geographical scope would most likely be SEA coverage. North Asia are usually covered by bankers based out of HK.

In SG, Credit Suisse and JPM the 2 strongest banks within the SEA region. Boutiques such as Evercore has been gaining quite a good traction in SEA as well.

However, if you were to compare HK against SG office, North Asia has significantly more deals and activity, It would be good to consider working there but language could be a barrier for you. Would suggest you to google on the league tables for to narrow your search on which banks is strong in HK.

Feb 23, 2017

One more thing to add for Shanghai/China:
The stock market (more blue chips) is in Shanghai, ChiNext and SMEs are in Shenzhen.

Apr 14, 2018

MBA, PE

Apr 14, 2018

what PE?...

a good amount of HK IBD analysts are promoted to associates... some go back for MBA. Very few have chances to go to buyside. Build solid connections.

Apr 14, 2018

What kinda responsibilities are you given as a first year analyst at a HK BB? any technical skills being developed? or simply just a lot of busy work with no modeling, etc?

Apr 14, 2018

erm, i had an interview with a BB from HK, and the MD whom interviewed me did his 1st 2 yrs in NYC. He said that the technical skills you learn in the US is more solid than those in Asia at first, but after 2 years, both are around the same level. The myriad of deals in US is broader, and different complex deals of diff nature are present in the US. In Asia, it's mostly ECM, so you might be pigeonholed. He did mention that there are very little M&A deals going on in Asia, and PE are not as developed. But, they've been doing so much IPOs that they're laughing their way to the banks these days...

Apr 14, 2018

i would definitely pick 1. NY, 2.London and 3,HK in that order to get the best deal exposure.

Apr 14, 2018

.

Apr 14, 2018

NY has a wider variety of deals, but at the analyst level the exposure is less than the HK analyst. You might be working on a huge M&A deal in New York, but the problem is, the information / understanding you are exposed to is minute. On the other hand, you might work on a large IPO in Asia, and be the only analyst on the deal - consequently developing a better "bigger picture" understanding of what is going on.

New York will give you more flexibility down the road if you want to work in other markets, however, if your goal is Asia and you have the language capabilities, starting in Hong Kong is probably advantageous at this point. A large part of succeeding in this industry is understanding the landscape, navigating the office politics, and building professional and personal relationships.

Nov 2, 2017

Was wondering if any could provide some info on summer associate recruitment in Hong Kong. Given the fact that a lot of associates in hk ibd were a-a promotes, does that mean that there are less summer associate spots for hong kong? Also, what are the target MBA programs?

Nov 3, 2017

There were like 6-7 where I'm at.

Mostly like Columbia/M7 or top European ones.

    • 1
Nov 3, 2017

Thanks! SBed

Apr 14, 2018

That depends - can you do the Gangnam Style?

Apr 14, 2018
Bruce Wayne:

That depends - can you do the Gangnam Style?

Ha ha!!! Good one.

If you ain't gettin money dat mean you done somethin wrong.

" If you have built castles in the
air , your work need not be lost;
that is where they should be .
Now put the foundations under
them." - Henry David Thoreau

Apr 14, 2018

are you at a target?

Take it as it comes
JJ

Apr 14, 2018
lazardsoeurs:

are you at a target?

yes

Apr 14, 2018

you actually do need to be able to speak the language and write professionally. often the books are made in english and are required to be translated into Chinese (hence professional writing mastery in Chinese)

Take it as it comes
JJ

Apr 14, 2018

also interested

Apr 14, 2018

You absolutely need to be able to speak the language. There are plenty of Asian Americans at targets who want to do IB and are essentially fluent. It's not a "plus," it's pre-requisite.

Apr 14, 2018

Bump* can anyone else add to this?

Apr 14, 2018

No you do not need to be able to speak the language. They are recruiting in America to look for English speaking individuals that can get the job done. If they want someone that can speak the Native language, they will recruit those people at regional/local universities.

Apr 14, 2018

I just did my 2 years at a BB in HK - speaking a second Asian language is extremely important - in my superday I was told that they would take a 6/10 who spoke Mandarin over a 9/10 who did not.

Based on my experience, banks like to recruit in the US / UK because they tend to find better balanced individuals who have the same, if not better, skill-sets

That being said, it cannot hurt to recruit - many banks are building up their SEA businesses (might mean you have to be based in Sing, which definitely is not a bad option)

    • 1
Apr 14, 2018

The ideal candidate for these positions is a rich, well-connected Hong Kong native (so perfectly fluent in English/Mandarin/Canto/whatever) who went abroad to a prestigious American university and wants to come back to the motherland after graduation.

It helps if you're a dude, too.

Nov 3, 2017

Singapore also has a wider set of target schools per se. You dont see too many Ivy League people but many top BB spots are filled by top UK Schools (Oxford/Cambridge/LSE/possibly Imperial and Warwick)

Apr 14, 2018

Try getting a transfer to your BB's SG office (if they have one) as a 3rd year - you don't need any special languages for SG.

OH

Apr 14, 2018

and target Macquarie..

I have no idea what the deal is with them. all i know is that they speak english in Australia.

Apr 14, 2018

depends on the bank, US banks tend to go to NYC, while the european ones could be london.

Apr 14, 2018

Deadlines are in late November/December and interviews in January so it's not that much earlier than the US.

Apr 14, 2018

recruiting for asia ft (regular process) havent even really started yet.....

Apr 14, 2018

Well I'm saying all the SA deadlines are in late Nov/Dec so interviews will only be in january too

Apr 14, 2018
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