Later this year I’m starting out as an M&A analyst at a major US bank in Hong Kong. Like most of my cohort, I got the role by acing my internship and getting a return offer. But during my degree I also spent a summer at a Chinese bank – and my experiences there have made me even more pleased to be joining a global firm.
At the Chinese bank, I was working on cross-border M&A deals and my boss was ex-Morgan Stanley. But despite being in the most international side of its business, I still saw a lot of differences between this bank and the bulge-bracket one that I’m about to join full time.
For example, during my whole three months at the mainland bank there were no opportunities to speak to anyone from director level upward. By contrast, the American firm hosted weekly lunchtime sessions where we could network with MDs. Even away from these events, the senior people were generally willing to talk to interns and saw us as an important part of the business. The Western bank was much better at nurturing interns.
The junior bankers I dealt with as an intern were also better at the Western bank. They’d received better training as analysts, which made them better informed and more helpful when I had questions or needed advice about a technical or client issue. And the workforce at the international firm was, as you would expect, more global and better reflected Hong Kong’s status as a multi-cultural city.
The actual work that I did was also different, even though it was M&A focused in both firms. While interning, I found out that M&A bankers at the Chinese firm rely more on their personal judgement when advising how much to pay for a company. I was given modelling to do as an intern, but it wasn’t regarded as being that important.
At the US bank, however, modelling is a crucial part of what interns and juniors in M&A do on a day-to-day basis. That’s because managers at the large companies that Western banks typically advise are well trained in valuations models and are used to dealing with investment banks. Chinese entrepreneurs, who make up most of the client base of my mainland bank, don’t understand modelling in as much depth, so it doesn’t make much sense to focus on it.
Meanwhile, Western banks still offer you more international M&A exposure and the chance to work on more ‘mega deals’. I’m not sure the differences I experienced would have been quite so extreme had I been working in ECM, where international firms don’t hold the same advantages and Chinese banks are dominating regional league tables. If you’re working on an IPO of a Chinese company in Hong Kong, you don’t need the same global connections as you need in cross-border M&A, nor do you need to manage such complex relationships.
In M&A, however, there’s no contest. I’ve spoken to many interns and students recently and the overwhelming majority agree that Chinese banks offer strictly second-tier M&A careers. They – like me – would always take a job at a Western bank as their first choice.
Sara Yang (not her real name) is a finance student who starts a full-time job at a US investment bank in Hong Kong in September.
Image credit: IG_Royal, Getty