If you’re an investment banker in Asia tiring of working in a sector continually afflicted by redundancies, your options for a career change are not limited to corporate banking or the middle office.
While the number of vacancies it creates will never be enormous, the private equity (PE) sector in Singapore is tipped to expand and headhunters say bankers will be increasingly needed to help tackle talent shortages.
Total PE investments into Southeast Asia grew from US$1.56bn in 2012 to $3.32bn in 2013, according to an April report from the Singapore Private Equity and Venture Capital Association (SVCA). Managers based in Singapore, the hub for Southeast Asian PE, accounted for more than 50% of buyout investments into the region.
“There continues to be a re-energised feeling in the markets around ASEAN [Association of Southeast Asian Nations], after China dominating the agenda for a decade or more. The recent election in India has also refocused effort away from some of the North Asian markets,” says Keith Pogson, Asia Pacific managing partner of financial services at EY. “The closing deadlines for the establishment of the ASEAN Economic Community again opens opportunities for business growth.”
“However, as these barriers come down, local barricades – in the form of labour laws and other factors – rise, again reinforcing the pressure on a constrained labour pool in Singapore,” Pogson tell us.
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Headhunters in the city state agree that the talent pool of PE professionals is currently not large enough to support the industry’s expected expansion. And the SVCA report points to “availability of human talent” as one of the main challenges facing the sector.
This is potentially good news for investment bankers in Asia aspiring to move into private equity. “In Singapore, most PE firms are relatively open to hiring investment bankers or management consultants. They are also open to bringing them in from Hong Kong or China,” says Stanley Teo, a director at Profile Search & Selection in Singapore.
Teo says PE funds are also interested in candidates with Bahasa Indonesia language skills and execution experience in Indonesia. “I’ve seen a number of PE hires in Singapore this year – mainly junior to mid-levels candidates with good M&A and capital-markets experience,” he adds. “At the senior end, it’s origination ability and local market knowledge that continue to be in demand.”
And as PE expands in Singapore, “niche” industry expertise – within broader sectors such as natural resources, ecommerce and consumer products – will become increasingly in demand, says Farida Charania, Asia Pacific CEO of search firm Nastrac Group in Singapore. “PE firms will focus on the most attractive industry to get early potential deals, which will in turn require extensive industry knowledge,” she adds.
In contrast to China, where PE firms are poaching people from industry, Singapore’s more developed finance sector means funds can typically find industry specialists within banks.
Major US PE firms are expanding in Singapore on the back of regional economic growth and growing consumer affluence. Blackstone opened an office in Singapore in October 2013 – seven years after entering the Asian market – and continues to grow its headcount, which currently stands at about 35, according to headhunter in the city state who asked not to be named. KKR established its Singapore operations the previous year.
“But at the moment funds from China and Hong Kong are the main ones setting up here,” says Charania. “It’s an attractive place for investment mainly because of the economic stability and because it’s a hub for many businesses, which leads to mergers and acquisitions.”