Their hiring plans might best be described as niche and selective, but private equity (PE) firms are expanding in Singapore, the industry’s hub for South East Asia, as deal volumes rise in the region. The sector provides no easy refuge for investment bankers – senior candidates must have both origination and operational skills.
PE transactions in South East Asia (SEA) total $3.6bn so far this year, up from $1.3bn in 2011, according to data from the Centre for Asia Private Equity. And the big boys have moved into town. General Atlantic and Blackstone opened in Singapore earlier this year, as did Kohlberg Kravis Roberts last month.
Dymon Asia Private Equity, Navis Capital and Baring Private Equity have also been hiring, according to a headhunter who asked not to be named. Meanwhile, Carlyle Group has recently closed its first SEA deal.
“The accelerated interest comes mainly from a sense that there are a lot of potential deals that nobody is looking at,” says Tanya Sinha, associate director, Kerry Consulting. “PE firms in Asia might have reconciled themselves to the fact that deal sizes here will always be smaller than what they are used to elsewhere, but the number of deals is relatively high.”
Stanley Teo, director, Profile Search and Selection, says the PE industry’s headcount in Singapore is higher than it was a year ago. “Most firms usually had someone covering South East Asia from Hong Kong, but have decided that they now need a dedicated team here to be on the ground to source/originate, and manage existing portfolios.”
Sinha agrees that team sizes have expanded in 2012. “But PE has never been in the volume hiring game and that is not going to change anytime soon. Their needs will always be few and very experience driven.”
Teo says senior candidates must have good networks with asset owners, brokers, consultants, and ultra-high-net-worth families, and must be able to use them to originate deals. “Technical skills are a must-have, as are negotiation and structuring skills.”
But deal-making pedigree alone no longer cuts the ice in Singapore private equity. “Given that the market has evolved in SEA, most firms now prefer to look at people not just with a strong origination capability, but with strong operational expertise, too,” says Sinha. “This can set them apart from the competition and is one of the main value-adds that they can bring to smaller and ambitious portfolio companies.”
Sinha reckons such all-rounders are hard to find. “It is easier to get bankers who are only deal focused, or industry guys who have strong operational expertise but are lesser deal savvy – the dream candidate is an optimal mix of both.”
Recruitment is typically less challenging lower down the ranks, says Teo. “Large PE firms prefer junior candidates who can do the heavy lifting, like deal screening, financial modelling, deal management etc. They don’t really have a talent shortage as they can get people from investment banks, management consulting firms, accounting firms or even busted-up special-situations funds or smaller PE funds.”