Investment bankers are still in high demand in China, but there’s a catch – you need cross-border skills and you must be prepared to shift into a corporate development role.
Outbound M&A volumes in China are hitting record levels as mainland companies snap up overseas assets. Year-to-date Chinese acquisitions in the US alone stand at $34.85bn, an almost 12-fold increase over the same period in 2015, according to Dealogic figures.
While this is keeping M&A recruitment buoyant at both local and foreign investment banks in China, the most dramatic rise in M&A vacancies has come within Chinese companies who are building internal advisory teams to help guide themselves through foreign takeovers.
Mainland corporates, especially those in the technology sector, have been hiring high-profile senior bankers for about two years. In August 2015, for example, e-commerce giant Alibaba appointed Goldman veteran Michael Evans as its president and tasked him with driving its international expansion.
Now the push for in-house global M&A expertise has shifted to rank-and-file recruitment and isn’t limited to tech, say headhunters.
“Wanda, Ping An Insurance, Baidu, Tencent, Alibaba – to just to name a few – have all increased their M&A hiring at all levels recently,” says Jason Tan, a partner at search firm Carlson Harriet in Shanghai.
Fosun Group – whose global buying spree in just the past few weeks has included the acquisition of British football club Wolverhampton Wanderers – now employs more than 70 M&A professionals, according to one industry source in China. Anbang Insurance houses more than 120 M&A specialists in its Beijing office, he adds.
As Chinese corporates build their in-house teams they are becoming more “flexible” in their recruitment, says Adam Jeffes, associate director of financial services at recruiters Morgan McKinley. Generalist bankers who cover the same industry as the hiring company are being taken on alongside M&A experts.
Still, finding people to step into internal advisory roles isn’t easy. The growing focus on outbound M&A requires skills that are in short supply in China.
“Outbound is not only about deal making, it’s also about integration – but people with experience of the full cycle are rare,” says Allen Wang, associate director of banking and financial services at search firm Lloyd Morgan Executive in Shanghai.
“And a lot of M&A bankers in China don’t have a good enough understanding of regulations in overseas countries, such as dealing with local labour laws,” adds Stephen He, a partner at recruiters Falcon Talent in Shanghai.
Tan from Carlson Harriet says there’s a lack of “quality” people ready to go into in-house roles.
“A M&A specialist is best defined but the quality of deals they work on instead of the number. Someone can put 100 deals per year on their CV but their ‘real’ due diligence on them was zero,” he says. “By contrast, a candidate who looked at five deals and successfully complete one of them is worth pursuing.”
Chinese corporates are also looking for bankers who have a degree from a prominent overseas university, says Tan.
If you are among the few people who fit their ideal of an in-house M&A candidate, expect an increase in base pay that could well offset the smaller bonus you will receive after moving from banking to the corporate sector.
“If Fosun, Wanda, Ping An, Baidu, Tencent or Alibaba come knocking, get ready for a 50% pay rise,” says Tan.
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