Private Equity in Hong Kong | Top Firms List | Salary | Jobs

Private equity in Hong Kong is the second-largest private equity market in Asia, providing opportunities to individuals aspiring to become part of this huge market.. The nation ensures having a well-regulated private equity zone for its investors, thereby guaranteeing an organized and smooth transactional flow.

It is the private equity market that allows companies, new and existing, to raise funds to establish and expand themselves. This not only helps in innovation but also leads to job creation, which is a fundamental element of a progressive economy.

Private equity in Hong Kong, as stated earlier, constitutes one of the huge financial markets, allowing fundraising opportunities to those in need. However, entering the market and grabbing a job is a crucial affair as it involves a strict recruitment process that individuals have to go through.

In 2022, Hong Kong recorded capital under management of over $170 billion with approximately 600 private equity firms operating as of September 2021. As 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, the chances of having a growing career in Hong Kong are high. 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.

The tax and legal implications have undergone changes, thereby making private equity in Hong Kong one of the most regulated markets. The authorities introduced schemes to encourage individuals to use locally-manufactured vehicles, expand current profit tax exemptions, etc. They also made amendments to certain codes of conduct for fund managers.

The attempts enhanced the level of confidence of the investors in the private equity markets in Hong Kong and also tightened the investment regulations.

Private equity 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 capital 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 buyout 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 capital 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 diligence 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 synergy and growth.
• Distressed Investment: Hong Kong's private equity firms 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.

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

1. The Abraaj Group
2. ACA Capital Group Limited
3. ACE & Company Hong Kong Limited
4. Actis
5. Affinity Equity Partners Limited
6. AGIC Capital
7. All-Stars Investment Limited
8. Allstate Investments
9. Blue Ocean Capital Advisors Limited
10. BVCF Management Ltd.
11. Goldman Sachs
12. Hippocorn Capital
13. HNA Group (International) Company Limited
14. Ion Pacific Limited
15. Latitude Capital Management
16. MizMaa
17. Queen's Road Capital
18. responsibility Hong Kong Ltd.
19. Sun Hung Kai Strategic Capital Limited
20. SA Capital Limited
21. Sectoral Asset Management Limited
22. Sequoia Capital China Advisors Limited
23. Silverhorn Investment Advisors Ltd.
24. Streeton Partners
25. Sun Hung Kai Strategic Capital Limited
26. Tiger Securities Asset Management Company Limited

Even if private equity in the Hong Kong market seems interesting to work for, it is not easy to break into Private Equity. 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: -

• Pre-requisites/Eligibility: Hong Kong private equity firms need candidates to be more than just a gamut of banking experiences and finance degrees. They want them to pursue something else as well. So, from the beginning, be aware that you also need to showcase your extra-curricular activities or knowledge in arts or history. In addition, extensive knowledge of finance is necessary. Finally, you also need relevant internships to make your mark, but becoming more than an aspirant for a private equity career is important. And if you can remember that, you will be ready for the challenge and the struggle.
• Networking: Getting an internship is pretty difficult in private equity in Hong Kong. That is why you need to be on the lookout for opportunities constantly. And your tool is networking. It would be best if you did networking intensively. If you do not, then your chances will be very bleak. First, try asking your school professors and ask whether they know anyone who has been in the private equity market. They can give you some leads. You can also peep through your alumni network and then try to connect with people directly working in the private equity market in Hong Kong. And you can take it to the next level too. You can connect with strangers on Linked In who have worked in Hong Kong’s private equity market. But no matter what you do, you must stay in Hong Kong to get results. You cannot remain elsewhere and expect the results from networking. No. Find a friend with whom you can stay in Hong Kong or find yourself a hostel or a cheap hotel.
• Internships: As you know, with the fierce competition in Hong Kong’s private equity market, you should not leave any stone unturned. It would help if you tried to get at least two internships before you expect to get into a full-time opportunity. Try out for private equity internships. Suppose you do not get any private equity internships. In that case, you can go for investment banking internships. By doing internships, you need to prove to the employers that you are very much committed to your future career and that you know what you are doing.
• Interviews: You must thoroughly prepare yourself for an interview for private equity in Hong Kong. For example, you need to come from a good school. Additionally, it would help if you did a couple of internships (more is always better). You also need to make sure that you are technically prepared to answer questions. Before you do anything, concentrate on making your CV top-notch. Include all your experience, your skills, and relevant education. And the CV should be only one-two page. Once your CV is made, prepare your cover letter and briefly tell your story. Then go for the interview. The interview in Hong Kong is unstructured, and you may need to go through 2 rounds of interviews or 15. And it all depends upon the particular private equity firm to decide which structure they would follow. First, there would be a “fit” interview where they will judge you based on whether you are culturally fit for the organization or not. Then you will be asked technical questions to see your depth in accounting, valuation, and financial modeling. Finally, you will be requested personality-type questions to judge your interpersonal skills.
• Language & Entry Barrier: You must know Mandarin. In addition, you also need to learn English pretty well to handle cross-border deals. You will face many issues if you are not fluent in both languages. As a foreigner, your chances of success will increase if you decide to stay in Hong Kong instead of trying abroad for a full-time/internship opportunity.

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.

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 analyst 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.

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.

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.

This article is a guide to Private Equity in Hong Kong. We explain the services, list of top private equity firms, recruitment, salary & exit opportunities. You may also have a look at the following: -

• Private Equity in Germany
• Private Equity in Russia
• Private Equity in India
• Private Equity in France