< Back

Asian Private Equity in 2018 - a Recruiters View

Private Equity

Article posted by Cobalt Recruitment

Our team at Cobalt Recruitment has been focussed within Private Equity and Principal Investment, across Singapore, South East Asia, Hong Kong and mainland China for the past six years and has since built an established team of professionals to assist clients with growing their investment teams. With Q1 drawing to a close, now seems an opportune time to reflect on the market forecasts that were established at the beginning of 2018 and for us to consider the outlook for the remainder of the year.

The Organisation for Economic Co-Operation and Development stated at the end of 2017 that ‘Southeast Asia is poised to maintain its growth momentum, averaging 5.2% per year from 2018-2022’ (OECD, 2017). Whilst this is a promising outlook, a common theme that we have heard from clients and candidates alike, in the Cobalt Singapore office, is “the market is a bit slow isn’t it?” and “there are not many good investment roles out there” or “there is a lot of dry powder in the market but valuations are just too high!”

So is this a true reflection of what we have experienced in job opportunities and new hires, which is one of the more accurate barometers of industry health?

In short the answer is no. This is not what we have experienced during Q1 of 2018. Cobalt has seen a sharp increase in the number of roles we have been mandated to work on for clients. Compared to last year this figure is up 37%, a big increase especially when considering a large proportion of these roles are new hires and not replacements. Maybe a sign of our clients preparing for some more positive and progressive investment times ahead.

So how has this come about?
The Private Equity industry is larger than it has ever been, weighing in at a total of USD 820bn in global dry powder held in December 2016 up 8.6% from 2015. Asia continues to lead the way, outstripping the US and Europe with a monster 15% increase to USD 110bn in the same period. There are still challenges in spending especially as seen with deal activity in the LBO world, however M&A deal activity tipped the scales at just shy of 500 deals in Singapore alone during Q1 and Q2 of 2017. This has led to clients engaging Cobalt to find both junior and talented investment professionals (Associate to Vice-President) and also in capital raising and legal roles bolstering their war chests, whilst minimising spend.

In which industry sectors have we seen this activity?
Our recent activity would suggest that the Real Estate, Technology, Consumer and Healthcare verticals continue to be the ‘go-to’ investment classes alongside sector-agnostic funds. Namely clients continue to hire bright, well-trained and motivated professionals across all industry sectors. We have also seen an increase in the demand for Asian professionals speaking a local language other than Chinese or English such as Indonesian Bahasa, Vietnamese or Cambodian; a clear sign that more and more funds are venturing into SE Asia outside of Singapore. Specifically, the OECD projects countries such as Indonesia, Vietnam and the Philippines will experience heightened growth between 2018-2022 so these trends look set to not only continue but also to increase.

What about the impact of Private Equity's rising fortunes on the cost of employment?
Like the valuations of assets in the current market, salaries of investment professionals have been steadily rising. Our recent salary survey suggested that professionals are receiving anywhere from 3-10% raises to their base as an annual increment (not including promotions) and a larger 15-20% to move companies. That said there remains the need for investment banking candidates to look long term when moving into the buy-side and be prepared to take a pay cut of anywhere from 25-40%.

The fact remains that the best talent is in short supply and high demand which drives these increases. Likewise retention of existing staff should be the top priority of every business leader as the candidate market is as competitive as we have seen in the past 5 years!

A snapshot of our salary survey results:

Hong Kong & China Salary Survey Results

Cobalt was proudly named as International Recruitment Company of the Year at the APSCo awards in 2017 and has been established in the Asian region for many years, not only across Private Equity and Principal Investment but Finance & Accounting and the Legal sectors. Further to this, the business is a specialist within the Construction & Engineering and Real Estate sectors.

Article written by Marcus Davies Bateman, Director – Cobalt Asia.

We’re here if you need help defining a role or brief, specialist insight to help shape your ideas or expert help with your recruitment process. Just get in touch to arrange a conversation with one of the team or if you’re ready for us to find the perfect person for you, send us your brief.

If you’re looking for your ideal job send your CV to us to get started or search for the latest job vacancies and we’ll get the ball rolling.