Chinese investment banks are dominating revenue league tables in Asia, while some Western firms (most notably Credit Suisse) are still trying to expand in the mainland.
But succeeding as an investment banker focused on Chinese clients is far from straightforward.
These are the skills that investment banks in China are demanding from front-office candidates.
1. Connections / guanxi
Investment bankers in China rely on their client connections as much as private bankers do in other markets. “The number one thing you need is guanxi,” says Jason Tan, a partner at search firm Carlson Harriet in Shanghai. “You need the WeChat of billionaires like Jack Ma, Pony Ma, and Guo Guangchang to do serious investment banking in China.”
2. Long-term relationship management
“To succeed as a dealmaker in China, guanxi is a prerequisite – but you also need the ability to cooperate with clients on an ongoing basis,” says Stanley Soh, a former investment banking headhunter, now a financial services consultant. “As most private enterprises in China are managed by one individual, winning their trust and friendship is paramount to deal generation.”
3. Cross border skills
“With more Chinese enterprises looking outwards for M&A, having global experience to advise on cross-border merger trends is becoming more essential,” says Soh.
4. Explanatory skills
China doesn’t have a long history of investment banking and your clients may have little experience of listing on the stock market or acquiring new assets. “So business owners in China expect their investment bankers to be more down to earth than those in mature markets,” says Stephen He, a partner at recruitment agency in Falcon Talent in Shanghai. “You must be able to fully explain business models in non-technical language, so clients understand the requirements.”
5. An overseas education
“Modern Chinese investment banks like China Renaissance are becoming more agile and faster in their dealmaking,” says Tan. “And if you look at their mid to senior ranks, they’re all local talent, mainly with an overseas education. It’s not quite at the level of Goldman Sachs or Morgan Stanley, but they have some form of education from the top universities globally.”
6. Or an elite local one
If you haven’t studied overseas, you must have a degree from an elite domestic university rather than a second-tier one. “The top school network is very influential in China,” says Hubert Tam, managing partner at search firm Sirius Partners. “It’s important to attend the likes of Tsinghua University, which is like the Harvard of China – only the supreme students are admitted.”
7. Technical expertise
“Given the maturity of international markets compared with Chinese ones, investment bankers in China aren’t likely to be as experienced in terms of deal history and modelling skills,” says Alistair Ramsbottom, managing director of Shanghai search firm The Blacklock Group. “But this is rapidly changing. Western i-banks in particular are now demanding a more rounded technical skill set from candidates.”
8. Political nous
“The strong influence of the government in China, in addition to clients’ typically high expectations, creates a unique working environment for investment bankers. Bankers have to understand any political motivations and manage clients’ deal expectations,” says Soh. “In China you need the ability to deal with a more complex client, office and political environment, particularly because there’s less transparency in the whole banking process,” adds Ramsbottom.
9. Regulatory knowledge
“Investment bankers working for Western firms in China face a much more difficult regulatory environment than those at local firms. They often have to focus much more on regulatory matters as they don’t always have as much freedom to operate as they would in other markets.”
Related articles:
The 10 Hong Kong banking jobs with the biggest pay risesWill you only move banks for a substantial pay rise? These are the job functions you should be working in if you're in Hong Kong.
Chinese investment banks dominate, but can’t afford bankers from Western firmsChinese investment banks are ramping up recruitment, but their poor compensation is stopping them poaching more bankers from Western rivals.
This Hong Kong investment banker can help you get your next jobMost investment bankers are focused on career advancement – their own. But Sherjan Husainie, a Hong Kong-based Canadian banker, takes a different approach.
Image credit: shansekala, iStock, Thinkstock