Private Equity In Hong Kong Top Firms List Salary Jobs

Private Equity in Hong Kong

Hong Kong is the second-largest private equity market in Asia. So, if you are aspiring to become part of this huge private equity market, you are at the right place.

In this article, we will investigate private equity in Hong Kong and how you can make your mark in the private equity career in Hong Kong.

Here is the sequence we will maintain while discussing the whole article:-

Overview of Private Equity in Hong Kong

Before you try to get into the private equity market of Hong Kong or know about the recruitment process, you must have an idea about the market. Here is a snapshot of Hong Kong’s private equity market: –

As you already know, Hong Kong is the second-largest private equity market in Asia – it has captured 19% of the total capital pool of Asia. So, your chances of growing your career in Hong Kong are very much possible. In addition, three regions are most popular for private equity – New York, London, and Hong Kong.According to the last data collected in 2014, it has been found that there are 400 private equity firms in Hong Kong. So, if you are willing to test the waters and do the networking, why will you not get a chance in one of the top private equity firms in Hong Kong?According to the Hong Kong Venture Capital and Private Equity Association (HKVCA), at the end of 2014, the total capital under management in the private equity market in Hong Kong was $110 billion. In addition, in 2014, the total capital under management had increased by 12% compared to the last year’s total capital commitment.Even if Hong Kong is a great place to work in private equity, Hong Kong’s private equity funds come from abroad. After all, who would not want to invest in Hong Kong? These investments come from all over the world – Australia, India, Singapore, Japan, and Korea.From 2009 to 2015, Hong Kong has become one of the top three in IPO fund-raising ranking. That means you can understand that Hong Kong has been doing exceedingly well for the last 7 years in exit private equity investments.In the first eleven months of 2014, private equity and venture capital deals amounted to $407 million (the numbers of private equity deals were 37 in total), and Private Investment in Public Equity (PIPE) was $5.675 billion.

Services Offered

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Private equityPrivate EquityPrivate equity (PE) refers to a financing approach where companies acquire funds from firms or accredited investors instead of stock marketsread more in Hong Kong is involved in four types of investments. Please have a glance at them one by one.

Venture Capital: Hong Kong’s private equity firms invest a lot in venture capital. These firms concentrate on the small, start-up, and emerging firms that need funds for their growth. Before investing, private equity firms in Hong Kong check their potential. If they have growth potential, they decide to invest in these companies. Venture capitalVenture Capital Venture capital (VC) refers to a type of long-term finance extended to startups with high-growth potential to help them succeed exponentially. read more investment is one of the big investments of private equity firms in Hong Kong.Leveraged buyout: This is another investment service offered by private equity firms in Hong Kong. They choose a firm with a strong management team in a leveraged buyout. Then, they see whether there is any chance of buying the controlling shares through management. They opt for a leveraged buyoutLeveraged BuyoutLBO (Leveraged Buyout) analysis helps in determining the maximum value that a financial buyer could pay for the target company and the amount of debt that needs to be raised along with financial considerations like the present and future free cash flows of the target company, equity investors required hurdle rates and interest rates, financing structure and banking agreements that lenders require.read more and offer the management the controlling share if there are chances. When the firm grows in profits and revenue, the private equity firms earn attractive returns. Whenever the returns do not seem appealing, they look for exit strategies.Growth capital: Growth capitalGrowth CapitalGrowth Capital, also called Expansion capital, is the amount of money offered to the fast-growing businesses requiring finances to expand their operations or new market ventures. All in all, it helps facilitate target firms for accelerating their growth rate. read more is another private equity investment that is very much prevalent in Hong Kong. Private equity firms look for mature companies and then do their due diligenceDue DiligenceDue diligence is a thorough examination of information and strict adherence to the applicable rules and regulations. It ensures asset protection as well as the avoidance of malpractices and conflicts.read more to see whether the private equity firms can generate attractive returns or not. If they can see the green light, they invest their money to expand or restructure operations, help the company create a new product, enter a new market or assist the company in acquiring another company to generate synergySynergySynergy is a strategy where individuals or entities combine their efforts and resources to accomplish more collectively than they could individually.read more and growth.Distressed Investment: Hong Kong’s private equity firmsPrivate Equity FirmsPrivate equity firms are investment managers who invest in many corporations’ private equities using various strategies such as leveraged buyouts, growth capital, and venture capital. The top private equity firms include Apollo Global Management LLC, Blackstone Group LP, Carlyle Group, and KKR & Company LP.read more also look for distressed investments where corporate bonds or common and preferred stocks are in distress. And then, after doing their research, they decide to buy those bonds/stocks at a low price and sell them off afterward.

List of Top Private Equity Firms in Hong Kong

According to Hong Kong Venture Capital and Private Equity Association (HKVCA), here is the list of some top private equity firms in Hong Kong: –

The Abraaj GroupACA Capital Group LimitedACE & Company Hong Kong LimitedActisAffinity Equity Partners LimitedAGIC CapitalAll-Stars Investment LimitedAllstate InvestmentsBlue Ocean Capital Advisors LimitedBVCF Management Ltd.Goldman SachsHippocorn CapitalHNA Group (International) Company LimitedIon Pacific LimitedLatitude Capital ManagementMizMaaQueen’s Road Capitalresponsibility Hong Kong Ltd.Sun Hung Kai Strategic Capital LimitedSA Capital LimitedSectoral Asset Management LimitedSequoia Capital China Advisors LimitedSilverhorn Investment Advisors Ltd.Streeton PartnersSun Hung Kai Strategic Capital LimitedTiger Securities Asset Management Company Limited

Recruitment Process

Even if private equity in the Hong Kong market seems interesting to work for, it is not easy to break into Private EquityBreak Into Private EquityYou can break into Private Equity if you’re an undergraduate in finance or relevant fields like economics, accounting or an investment banking analyst or already been working in a PE firm.read more. The first reason is that the Hong Kong private equity market is smaller (even with over 400 private equity firms). And without private equity experience, you will have limited opportunities. So, here is an overview of the recruitment process for private equity in Hong Kong: –

Culture

Think again if you think Hong Kong is not a good place to hang out. After the US and the UK, Hong Kong is the private equity hub. And all aspirants who want to build their careers in private equity would like to come to Hong Kong to pursue their careers. As a result, you will get a lot of opportunities to meet new people, hang out, and network with them.

And people in leadership positions like Managing Directors, Vice Presidents, Directors, and partners all visit similar places. So, if you can locate anyone, go over and connect with them. Tell your story and learn from them. Ask for any suggestions and add value. It will open floodgates of opportunities for you.

Hong Kong is where the working hours are almost similar to New York and London. But you do not need to be on your toes to find investments. There would be many investments in the pipeline. However, as a private equity professional, you may have to do less financial modeling, administrative work, and cold calling.

Salaries in Private Equity in Hong Kong

From a salary perspective also, Hong Kong is very attractive. Have a glance at the following screenshot, and you will know why so many aspirants want to pursue their careers in private equity in Hong Kong.

source: morganmckinley.com

If you look at the figure, you would see that you will start a little low, but as the years go by and you get promoted to a higher rung, you earn a lot more. And there are two categories – investor relations and investor analysts. You deserve much more than the investment analyst category’s investor relations category. If money is what you are after, an investment analystInvestment AnalystAn investment analyst is an individual or firm that excels in the financial and investment research and have a keen knowledge of financial instruments and models. Such financial professionals include portfolio managers, investment advisors, brokerage firms, mutual fund companies, investment banks, etc.read more role would be right for you.

Here, you should know one more thing. Hong Kong’s tax rate is much lower than any other country. That means you will have almost everything you would earn, which is not a bad idea for a starter.

Exit Opportunities

Normally, people do not leave private equity firms in Hong Kong as the salary is good in the higher rung. But, if you want to go private equity anyway, here are three options you have: –

You can leave and try your luck in investment banking (though things would not be easy for you, your private equity experience will certainly help).You can take an internal transfer and return to your country (if you are a foreigner).You can leave the job and start your own business.

Conclusion

In Hong Kong, the private equity market is good, but the job market is not attractive. So, it would be best if you were top-notch to access the top private equity firms in Hong Kong. But, if you can get an opportunity in Hong Kong and stick to it for a few years, your future will be magnificent.