Piling into private equity
Hong Kong's private equity market is still sizzling - as evidenced by Eric Mason's leap from JPMorgan to Carlyle.
It emerged last week that Mason, co-head of syndicated and leveraged finance at the Hong Kong office of JPMorgan, plans to make a swift exit to Carlyle, where he'll lead the US private equity group's mezzanine debt fund.
The inspiration behind Mason's move isn't hard to find. Recruiters say private equity remains a popular destination for bankers, and that senior bankers who shift to into the sector can command total packages of $2m a year - around 25% more than in banking.
The downside is that top bankers who go AWOL in favour of private equity won't get the lucrative rental allowances and fringe benefits that the average expat i-banker expects as standard. But there's an additional upside in the fact that they'll be able to co-invest in whichever projects they're working on - thereby potentially earning even more money.
Hong Kong isn't the only place where private equity is piling up. CVC Asia Pacific, the Asian arm of CVC Capital Partners and Citigroup, recently announced a new office in Singapore after declaring South East Asia an "attractive market for management buyouts". Figures from Asian Venture Capital Journal suggest the value of private equity activity in the region rose more than 100% in 2006, to US$37bn.
Other bankers may be tempted to follow in Mason's footsteps. "It can be an attractive trade moving from the lending side to putting equity into deals, and leveraged finance is seen as an excellent talent pool," says Phil Pemberton, a recruiter specialising in debt at Sheffield Haworth in Hong Kong.
Private equity can also offer a better lifestyle than investment banking. "At JPMorgan, Mason covered Australia and Japan, as well as the rest of Asia. He had a schedule involving Mondays in Hong Kong and Tuesdays to Fridays in Tokyo," says one source - truly punishing, as anyone familiar with the long flight from Hong Kong and the dreary commute from Narita to downtown Tokyo would agree.
However, given that the important buyout markets are precisely Japan, Australia and Taiwan, Mason may well find his new schedule is distinctly similar to his old one.