Private equity professionals across the Asia-Pacific region expect bigger 2014 bonuses and to receive higher base salaries in 2015 than a year earlier, according to a survey conducted by headhunting firm Heidrick & Struggles released on Monday.
Private equity dealmakers in Hong Kong reported the highest compensation in the region, followed by Singapore, Australia, China and India, according to the survey results.
Bullishness in the industry comes at a time when global private equity firms are expanding their footprint across the region and raising ever larger funds for acquisitions.
Heidrick & Struggles said there is greater demand for private equity teams in areas such as Southeast Asia and in secondary cities in some of the region’s major markets.
The head hunting firm sees a particular focus by dealmakers on real estate, consumer, environmental and infrastructure-related investing.
“Regional funds are growing larger, while global funds have set up Asia-specific investment vehicles and funding mechanisms,” said Harry O’Neill, managing partner of Heidrick & Struggles’ financial services practice for Asia-Pacific.
KKR for one recently expanded its infrastructure team.
The survey showed 64% of the investment professionals expect an increase in base salary in 2015 and only 1% expect a decrease. At the same time, 33% of respondents expect an increase in their 2014 bonuses, with only 6% expecting a fall.
Heidrick & Struggles conducted the online survey during November and December of global and regional private equity funds operating in Asia-Pacific and received 186 responses.
The results showed that, since 2012, total compensation levels have risen steadily. In 2014, pay rises were across the board, from analysts and associates, to managing partners and managing directors.
The results stand in stark contrast to the pessimism in investment banking, which has been shrinking during recent years. Many senior bankers have moved into private equity.
However, Heidrick & Struggles cautions that not all investment bankers will be able to make the leap as funds are placing greater emphasis on proven histories of sourcing, converting and exiting investments due to the tough fund raising environment.
Traditionally, global private equity firms have paid more than their regional counterparts. On a base salary basis, that gap has now largely closed, though global firms continue to pay bigger bonuses, according to the survey results.
