At Selby Jennings, we have noticed seasoned financial professionals leaving more traditional companies and moving into an exciting and developing area in the industry, New Economy Venture capital. Multinational investment banks and financial services now have an even bigger fight on their hands for the best and brightest talent as this new sector grows, meaning many firms may need to up their game to attract and retain.
Professionals and hiring managers routinely ask us about industry benchmarks and trends to help them understand where they fare within the market, and what moves they should be making. So what does the future look like for New Economy Venture, and how do professionals move into this market?
To remove some of the mystery, we spoke with our resident New Venture expert, Sarah Tam, to discuss key information around the industry, as well as salaries and benefits packages, offering valuable insights for everyone from hiring managers, job seekers, to eventual New Venture professionals.
Q: What is New Economy Venture?
A: “New Economy Venture is an exciting space, providing an alternative investment option for private clients. While more high-risk in nature, there is the potential for higher returns on investment, which is why it draws attention. Often New Venture businesses are smaller in nature when compared to giant conglomerate banks, which is why there is a fascination – an almost David v Goliath comparison in some instances.”
Q: How are the big banks reacting to this space?
A: “They are actually getting quite involved themselves. Banks are investing into building their own dedicated teams so they can also provide alternative investments, and ultimately diversify the money heading into the Asia-Pacific region. These banks want to provide an option to start-ups and would-be unicorns to access global investment, and get them before they list, so they are looking at how they attract those soon-to-be unicorns, and they need people on the ground to nurture these relationships."
Q: Where is activity taking place?
A: “For Selby Jennings in APAC, growth is around the mutual market access program, Hong Kong-China Stock Connect. The exchange, like many, will go to great lengths to encourage tech unicorns to list. The banks are scaling up for this sector, and we can see regional hubs heating up, across Hong Kong, Singapore, as well as Beijing and Shanghai. Right now, the opportunity is mainly focused though in the Greater Bay Area for tech start-ups, including across technology, media, and telecom (TMT), as well as internet, AI, health tech, consumer tech, industrial tech and more.”
Q: How can individuals succeed in this industry?
A: “That is such a big question, but one key ingredient to success in the New Economy Venture space is just that, the newness. Being able to spot, attract and target unicorns that aren’t quite unicorns is essential and involves a mix of skills that bridges multiple financial services disciplines. This is why it is such an interesting area of financial investment, because it both straddles the investment banking space, but also very much involves expertise across private wealth management.
“Never before has Selby Jennings been needed more, because a cookie cutter approach to New Venture talent simply won’t work. It is not a case of picking out a private banker and moving them across. Indeed we are a specialist solutions provider, with access to multiple expert desks and can cross-collaborate, borrowing from talent pools in sales, investment banking and wealth management globally.
“Ultimately though, for talent to be successful, they need to be good at relationship management and wear lots of hats, balancing the needs of a tech entrepreneur, private clients, and investment groups. It’s also about the long game, because a unicorn doesn’t just develop overnight. You will be bringing these entrepreneurs on board to platforms such as big banks, setting them up for more fundraising and taking them all the way through to IPOs. In the future the entrepreneur can also become a private wealth client as well.
“While this nurturing can take years, the opportunity at the end is basically sky-high.”
Q: Who is taking advantage of this new space, or who should be?
A: “Talent in demand ranges from the actual tech entrepreneurs and game changers, all the way to investor relations who know start-up companies inside out. Building relationships with fundraising platforms is a skillset hiring managers are keen to see, but talent from private equity, internet companies and asset managers who understand the New Venture businesses, and have the hunger and drive to be part of something big are in demand, and always are."
Q: Why would a candidate want to move into New Venture, what attracts them to the industry?
A: “The New Economy Venture space has rapidly transitioned in the past 6 years. Where big tech firms previously grew their businesses in both private and public markets, now a lot of regulatory changes from the Chinese Government, since Q2 2021, have increased the barrier of entry and made it difficult to go through IPOs. In reality though, it’s been difficult for New Venture businesses to get funding because the Chinese Internet Penetration rate is around 80%. Wechat has over 1.2bn users and Alibaba has around 1.3bn users around the world, so from a market point of view, this could pose a challenge for new internet and tech entrants to compete in an already oversaturated market.
“Since the beginning of 2021, the New Venture internet market has been limited in terms of financing; fundraising pools have dwindled, perhaps indicative of the investors who are yet to see an exit after pumping in capital. However, this is where the banks step in – they have specialists that follow government regulation and can respond by guiding New Venture start-ups into success by having the banks reputation to help fund their businesses.
“In light of the increased regulatory pressures and difficulty raising capital, banks are in an advantageous position to nurture new entrepreneurs, provide regulatory advice, and find capital solutions; whether that’s in the form of raising assets from private clients, institutional investors, or the banks balance sheet itself."
Q: What are New Venture professionals doing, are they also considering a move?
A: “Speaking with New Venture professionals, many have made moves into financial advisory to start up boutique companies, switch into cross boarder investments, or take up roles where they can introduce Chinese stocks to prime investors as a way of funding Chinese assets."
Q: What locations, or businesses, are of interest in moving to?
A: “When discussing prospective opportunities with sector professionals, many have expressed that blockchain and crypto verticals have taken off across the globe but are yet to reach China, perhaps due to the increased regulations. However, both Singapore and Dubai emerge as hot destinations for many, particularly as the metaverse and crypto based technology are less regulated there."
Q: What is a typical salary for a New Venture professional?
A: “Money is a motivating factor behind many of the talent moves towards this hot new sector. As it is such a new sector we are looking at investment banking and private wealth management to guide hiring managers and professionals looking to make the move.
Investment Management Salary Guide (North Asia)
Private Wealth Management Salary Guide (North Asia)
“But it is also about being part of something not just lucrative, but also new and with great potential. Often these New Ventures are within fresh sectors, such as TMT, and being part of something from the very start and spotting its potential, is often a deciding factor in moving into the New Economy Ventures space. We expect exponential growth in the near future, as there are lots of new companies and entrepreneurs setting up shop and will impact the foreseeable future of not just financial services, but the wider world.”
A careful balance of investment banking and private wealth management talent will be crucial to New Economy Venture success, but it is a case of whether talent wants to make the move, and how existing, more traditional employers respond with better talent acquisition and retention strategies that will shape the future of the financial industry in APAC. Across Hong Kong, Selby Jennings can already see New Economy Venture exploding, and after Covid-19, it’s great to see growth and positivity across the APAC financial services sector.
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