Over the past several months I have engaged with organizations across East Asia regarding job opportunities for MBA candidates. While economic growth has slowed in the region, the job market is still good overall for MBA graduates and there are excellent opportunities in professional services, retail, consumer goods, and technology companies. Private equity opportunities have generally decreased and although a lot of money has been raised in Asia, much has yet to be invested. According to Private Equity International there’s about $120 billion of dry powder in the region, and the markets where big deals are available—Japan and South Korea—are highly competitive and tend not to be friendly towards foreign firms. The high-growth markets of Southeast Asia generally offer smaller targets or minority stakes in large companies. Below are snapshots of my observations in the countries where I have traveled during the past six months, with a focus on the Asian private equity market.
In December 2013 Chinese regulators lifted the 14 month moratorium on IPOs and also put in place new procedures for how companies can go public, making the process more transparent. There was a backlog of about 800 companies waiting to go public as a result of the moratorium, but it’s likely that China’s stock markets will see only mid-sized companies with little name recognition outside of China going public on the mainland, with the major Chinese firms preferring to go public in the United States. The two most notable examples of this are Weibo, which announced on March 14 that it intends to list on the NYSE and hopes to raise $500 million, and Alibaba announcing on March 16 that it too would file in the United States, expecting to raise as much as $15 billion. China’s SOEs account for 60 percent of the country’s GDP but most private equity funds invest in its private sector. I think it is worth watching those firms that invest in the public sector as this is where new growth potential exists.
There are fewer opportunities for MBAs in the private equity market than in recent years as many of the large international funds have reached hiring capacity. As such, students should pay attention to which funds are raising capital as that might suggest the need for additional headcount. Although most Hong Kong funds are focused on China and generally seek PRC nationals, in the coming years firms may start to show greater interest in candidates who have proven themselves in the U.S. or European markets during the economic crisis since restructuring of companies in China is likely to be more important in the years ahead. Therefore candidates who have this skill set can be valuable to firms even if they are not from China, though Mandarin would likely still be required.
Singapore serves as the regional hub for private equity firms looking to invest in Southeast Asia. While this is a large and growing market, there are few positions for new MBAs in private equity because firms typically grow talent internally and few actively recruit from MBA programs. In North America a common MBA career path for private equity is to spend two years in banking after college, work for two years in private equity, attend business school, and then return to a more senior position in a private equity fund. In Singapore, on the other hand, most firms tend to grow talent from within or hire laterally. Given that there are limited openings each year, if timing isn’t right and a student’s goal is a job in private equity, it would be best to get to Asia in any capacity to be able to position oneself to move to private equity when there is an opening. Most funds also seek locals because they need deal originators with local knowledge and contacts, so people from outside ASEAN will generally need a few years of experience in the markets to be viable candidates, by showing commitment to the region and local knowledge.
Malaysia aims to become a developed economy by 2020 and as a result it has been undergone major reforms to be more business friendly and encourage increased foreign direct investment. The World Bank ranked Malaysia 12th out of 185 countries in its Ease of Doing Business 2013 report; as a point of comparison in East Asia, China was ranked 91st. For MBAs considering internship or career opportunities in Malaysia who are not from the region, English is widely spoken and it is the lingua franca in business. But like most emerging markets pay outside professional services firms will be lower than the U.S. MBA norm and finding opportunities will require a lot of networking and relationship building.