There are more and more local hedge funds, private equity firms and venture capital firms being established in China. I personally think these small buy-side players can compete with the international banks here when it comes to career opportunities.
Here are some of the pros
· All-round exposure. Buy-side firms have lower headcounts and people usually have multiple roles. Closing deals, operations support and legal documentation can all be done by the same team. You therefore get a chance to develop a front-to-end transaction cycle knowledge, which is hardly offered in big banks.
· Faster decisions. Large global banks are strictly controlled by international regulations, especially so after the financial crisis. Sometimes deals are lost to competitors because rounds of internal approvals are required before they can be proposed to the client. On the other hand, local buy-side firms have a flatter organisation chart, and are therefore quicker and more efficient at making decisions.
·Growth opportunities. If you join a firm when it is first set up and you grow with it, participating in its strategic milestones, it will be a rewarding experience. Many Chinese buy-side firms were founded by the top managers of leading global banks. Learning from these people will definitely help your career.
· Close working relationships. Due to the small size of most local buy-side firms, different teams working on the same deal are often able to sit next to each other. Working closely can avoid communication breakdowns and create efficiency.
And here are some of the cons
· Local focus. These firms provide less international exposure than the large banks. Opportunities such as global projects and mobility are not offered.
· Training opportunities. Small firms have small HR budgets and usually only provide on-the-job training. Managers expect quick learning and adaptability. Do don’t go to the buy side if you’re after workshops, multi-media courses, and associate programmes where employees can expand their networks.
·Admin. Because roles are less defined at buy-side firms, a degree of tedious work, such as documentation, is pushed between teams.
The views expressed in this article are those of the author and not of eFinancialCareers. The author works for a financial institution in Asia.