Investment Banking in Singapore
Should you try to get into investment banking in Singapore? How is the market? How is the pay structure? Can you grow well in investment banking in Singapore?
In this article, we will investigate everything in detail.
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We will talk about the following in this article –
- Singapore Investment Banking Market Overview
- Investment Banking in Singapore – Services
- Top Investment Banks in Singapore
- Investment Banking in Singapore – Recruitment Process
- Investment Banking in Singapore – Culture
- Investment Banking in Singapore – Salaries
- Investment Banking in Singapore – Exit Opportunities
- In the final analysis
Singapore Investment Banking Market Overview
Getting into the Singaporean market isn’t an easy thing especially if you are from a different country and you don’t have any experience in Singapore. But it’s possible.
In Singapore, the market is not emerging; but when you will begin to work, you will come in touch with emerging markets in many South-Asian countries.
Investment banking here is quite established, but the nature of deals and scope of the market is pretty distinguishable. Here are a few things about the market that you should keep in mind –
- Bulge Bracket BanksBulge Bracket BanksTop 10 bulge bracket investment banks are - Blackstone, Goldman Sach & co, Morgan Stanley, J.P Morgan Chase & co, Bank of America Merrill Lynch, Credit Suisse, Citi, Deutsche Bank, HSBC, UBS. which primarily do the large deals. These include Standard Chartered, HSBC, DBS, Citibank, etc. are among the few who do a lot of bidding.
- Investment banking firms in Singapore are relatively smaller in size and usually, deal with smaller deals. Rarely do they handle any megadeals over $1 billion? However, if any mega-deal is being executed, everybody (the major names) would be involved in the deal.
- The issue with the Singaporean market is that most mid-size and large companies are either family-owned or state-owned. And as know the thing with the family business – people don’t want to divest their own companies. As a result, M&A deals are limited. Most of the bulge bracket banks here, thus, try to own the deals which are at a lower level. Very few markets can experience top-notch banks competing over middle-market deals. But in Singapore, it’s a reality.
- The primary deals in the Singaporean market involve shipping and natural resources. Singaporean market is also the hub of cross-border deals – it may be the case because of the secured economy offered by the Government.
Investment Banking in Singapore – Services Offered
Even if Singapore has a different market in investment banking than the UK and the USA, the services offered are almost the same. Let’s have a look at the services offered by the top-notch and local investment banks in Singapore –
- IPOs: Most of the investment banks in Singapore advise the companies on how to go about IPOs and how to list their shares on Singapore Exchange (SGX-ST). The investment banks help their clients understand the rules and regulations of the Singapore Stock Exchange so that there is no room for error and everything happens hassle-free. They also advise the companies on capital structure, themes of marketing, invitation structure, pricing, and timing.
- Equity and Equity-Linked Offerings: This is one of the most significant services offered by Singaporean investment banks. They advise companies on diverse equity-related products and offerings. These investment banks guide their clients to finance projects and improve upon strategic initiatives. They also advise companies on the size, type, structure, pricing, and timing of any equity-related products/offerings like block tradesBlock TradesBlock Trades are securities that are bought and traded in bulk quantities by an investor, and they involve negotiations of a large number of equity and bond securities that are traded between two parties, usually with the assistance of an investment banker, at an appropriately arranged price and outside of the stock market to minimize the effect on the security's price., rights issues, capital raising, and convertible securities offerings.
- Debt Capital Markets: Investment banks in Singapore work mainly in Asian markets and they all have a dedicated global sales and trading team along with a great credit research platform. Having such a team and platform allows most of the investment banks in Singapore to provide exceptional advice, offer amazing market insights, and gift unparalleled execution. These banks cover agency, corporates, supranational, funding solutions, sovereigns, etc.
- Private Placements: Singaporean investment banks provide a wide range of services in private equity for both listed and private companies. The offerings these banks provide are pre-IPOPre-IPOA pre-IPO is a placement method whereby the company offers its stocks in large blocks to the private investors at a discounted price before these shares are listed on the stock exchange for public trading. convertible securities, growth capital, mezzanine debt, and equity, etc.
- Mergers & Acquisitions: As already mentioned most of the M&A deals in Singapore are “below the par”. But that doesn’t mean middle-market deals don’t demand any expertise. Investment banks here provide corporate advisory and they have a strong team which deals with the technical details of all the deals. The most important ingredient is, of course, the bank-client relationship because on the basis of that only the entire deal is handled. These investment banks help their clients in cross-border transactions as well as domestic transactions by offering industry insights, a global perspective, solid experience, and seamless execution. These banks not only execute deals in Singapore, but they also advise companies in Malaysia, Indonesia, and Thailand.
List of Top Investment Banks in Singapore
Investment banking is strongest in Singapore if we compare it with the standing of the private equity market. That’s why there are many top investment banks in Singapore that offer great services and maintain a great, cordial relationship with clients.
Here’s a list of top investment banks in Singapore that are most notable –
- Goldman Sachs
- J.P. Morgan
- Deutsche Bank
- Morgan Stanley
- Standard Chartered
Investment Banking in Singapore – Recruitment Process
The recruitment process in investment banking in Singapore is different as the market is pretty small. If you try to get into it in the traditional way, it would be very tough.
Thus, if you have an option and you are a foreign national, instead of the Singapore market, try the London market for investment banking.
However, if you decide to get into the Singaporean investment banking market; here are a few things you should keep in mind –
- Networking is Key: In a small market, the jobs are often unadvertised and most of the time recruitment works through a reference. Thus, if you don’t network; your chances would be very bleak. Networking here doesn’t only mean making cold calls and sending emails to people who are at topmost positions in bulge bracket banks. Networking here means trying to pitch them in person. Yes, it’s very difficult to reach out directly and getting rejected again and again; because most of the time these top professionals don’t have time to listen to the pitch of a youngster. No matter what, if you want to get into investment banking in Singapore, you need to network through cold calls, emails, and also constant in-person pitching.
- Internships: When the demand of the market is low (as there are smaller teams and fewer people are recruited), investment banks will only select who have a good background. So, you need to hustle and get two-three summer internships. If you want to get into investment banking, it’s great to try out bulge bracket banks for internships. If you aren’t able to land an internship or two in bulge bracket banks; try middle bracket banks. The idea is to have hands-on experience in investment banking and at the same time getting recognized by a top-notch investment bank. If you manage to get interviewed by a bank later on (because of your networking skill and reference), these internships experience would seem invaluable to you. Do have a look at How to get Investment Banking Internship
- Fit Interview: The first round of interviews is often a fit interview. Normally corporate recruiters are appointed to conduct the interview. Here you would be checked whether you have the right background for the job or not. Banks that depend on the agencies to recruit few entry-level candidates need to leave the things to corporate recruiters. So you need to make sure that you know what it takes to impress the corporate recruiter to get through.
- Next Rounds of Interviews: Next rounds of interviews are usually done in the same manner. First, there will be analysts who will be taking your interview. If you get through you need to sit with an associate. If you clear the round, you need to sit with MD/Partner and HR representative/s. During these sessions, you will be asked to present a case presentation. But remember the emphasis is more on sales than technicalities. So you need to prepare in a similar fashion.
- Language and University: The culture is quite diverse and knowing Chinese is not mandatory. But if you know Chinese it would definitely help. Along with that if you have an education in any university in Singapore that would be an added advantage. Every investment bank likes local candidates and people who belong to the place. That’s why knowing the language and pursuing an education in Singapore would help you cut the crowd.
Investment Banking in Singapore – Culture
Singaporean investment banking market is much smaller. Thus, the culture in offices is much different than the Top banks in USATop Banks In USAThe top ten banks in the United States are as follows:1. JPMorgan Chase 2. Bank of America 3. Wells Fargo 4. Citigroup 5. US Bank 6. Truist Bank 7. PNC Financial Services Group 8. TD Group US Holdings 9. Bank of New York Mellon 10. Goldman Sachs Group and UK.
- The first thing is bankers here rarely do work on major deals; thus, the external pressure isn’t as much as it is in London or the USA. But that doesn’t mean that you won’t work longer hours. As an investment banker, you will work long hours (not 100+ hours per week, but close), not for external pressure, but for completing your own tasks since the team is pretty small in investment banking firms.
- The second thing that is relevant to the Singaporean investment culture is that people mostly work in closely-knit teams. And even MDs are accessible to entry-level employees. If you want to ask a question, you can walk into MD’s room and talk to him. And no-one screams at anyone even if new employees make mistakes (which is quite normal as they’re just beginning to adapt to a new environment).
- The third most important thing to consider about the investment banking culture in Singapore is that the focus is more on sales than on technicalities. That’s why rarely do people do modeling and valuation and more concentration is given on sales and pitch-books.
Also, have a look at Investment Banker LifestyleInvestment Banker LifestyleLong working hours, weekend work, a lot of hard work, and little sleep are all part of an investment banker's life. Life as an investment banker is described as hectic, but for those who want to live a life of dedication, competition, and risk while also performing well, investment banking is the appropriate choice.
Investment Banking in Singapore – Salaries
Salaries in Singapore are quite good especially if you start your career with a bulge bracket bank. So even if you need to go through a lot to get an entry; the end result is quite satisfying. Along with a great basic salary, you will also get a hefty bonus.
Let’s have a look at the average salaries of people working in investment banks in Singapore. These figures are assimilated by the survey data collected from various recruitment agencies –
From the above figures, we can see that if you start as an analyst in Singaporean investment banks, you will be able to earn at least S$118k on average, with 17% and 43% on an average bonus.
As you grow in your career and get promoted to an associate, you will earn an average of around S$171k on average, with bonuses of up to 58%.
As a VP, you will earn around S$263k on an average and as a director, you will learn around S$381k on average.
As an MD of an investment bank, you will earn around S$506k on an average.
So you can understand that if you can stick to investment banking for a while, you will be able to earn a decent amount of money over the years.
Also, have a look at Investment Banking Associate SalaryInvestment Banking Associate SalaryAn Investment Banking Associate is hired by an investment bank. An Associate can be a promoted Analyst after three or four years, or he can be hired directly from a reputable business school. A average annual compensation for an Investment Banking Associate is from $75,000 to $250,000.
Investment Banking in Singapore – Exit Opportunities
As investment banking turns out to be a great career, people don’t exit from their jobs. It’s not like 2-3 years of pursuing a career in investment bankingCareer In Investment BankingAn investment banking personnel is a motivated professional who aims to help their clients reach their financial goals and objectives. The top four investment banking careers are - Analyst, Associate, Vice president, Managing director. and then shifting to something else. No. But there are exceptions and few people change careers whenever they feel the need to (or they want to explore different opportunities).
Usually, there are two exit opportunities in Singapore.
- First, people leave investment banking for private equity funds. Private equity has started to make its mark in the Singaporean market.
- Second, people go for hedge fundsHedge FundsA hedge fund is an aggressively invested portfolio made through pooling of various investors and institutional investor’s fund. It supports various assets providing high returns in exchange for higher risk through multiple risk management and hedging techniques. after a few years of experience in investment banking.
Also, have a look at this detailed article on Investment Banking Exit OpportunitiesInvestment Banking Exit OpportunitiesAmong the several exit options available to investment bankers are: 1.Private Equity 2.Hedge Funds 3.Strategy Consulting 4.Fin-Tech 5.Advisory for large corporates.
This has been a guide to Investment Banking in Singapore, their services offered, the recruitment process, their culture, top investment banks in Singapore, salaries, and exit opportunities. You may also have a look at the following article for learning more about Investment Banking –
- Investment Banking in London
- Investment Banking in Dubai
- Investment Banking In India
- Middle Market Investment Banks
Getting into investment banking in Singapore is a very tough nut to crack. But if you are able to crack that nut, stick to the job for few years and you would see that as you grow in your career, you would earn a decent amount of money in investment banking.