Mar 29, 2012

Private equity in China faces talent crunch

By Jing Yan

Many private equity (PE) and venture capital (VC) funds are investing in China. According to data provider Zero2IPO, six Chinese and foreign funds have recently finished new rounds of financing. But managers say finding the right talent is difficult because of a lack of people who have experienced complete deal cycles.

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Kobe Chen, business consultant, PE and VC, MRI China Group, estimates that there are more than 1,000 vacancies in private equity. “Experienced talent is always in demand. Deal exposure, industry knowledge and business sense are crucial factors to differentiate good candidates from mediocre ones.”

James Sun, senior associate, banking and insurance, Talent2, adds: “In this industry, you usually don’t classify candidates as good or bad, but as experienced or inexperienced. The only major problem with this is that there are only a handful of people who have been through the entire deal cycle in China since this industry only really started a few years ago.”

 “Finding the right talent is difficult because of a lack of people who have experienced complete deal cycles.”

As capital markets slowly pick themselves up, there will be a higher demand for industry specialists, says Sun. “In China, crowd funding has become increasingly popular with the local high net worth community, so the need for these specialists is growing.”

Firms also want to hire seasoned investor relations and client services professionals who can continue managing their investments when deals and cash flow are at a premium. “These industry experts will provide them access to the best deals and the most updated market information,” explains Sun.

Although the Chinese market is a favoured destination for both foreign and domestic investors, not all funds are successful. “Most firms will be going through a transition phase and because of this, we will see a number of individuals looking for opportunities. Lay-offs are generally not that high in this sector, but for smaller funds who are closing house or cost cutting, this will gradually increase.”

Published on eFC online news