KKR has built a massive Asian business with less than 1% of staff as expats
Joe Bae, KKR’s co-chief executive, has built the firm’s Asian business from scratch into one that employs 350 people and is the biggest international alternative investment fund in the region.
The firm is continuing to expand in the region and in May unveiled its inaugural $1.1bn credit fund, the biggest first-time fund-raising in the region.
Bae told Alison Mass, chairman of Goldman Sachs’s investment banking division, in an interview last month that the success is down to recruiting local talent. Bae launched the KKR business in Asia in 2005 as a start-up and he had a clear vision of the talent he wanted to recruit.
“What we didn't want to be is this big US firm coming to Asia, trying to do business in a very western style. So, today we have eight offices. We have over 350 executives on the ground. I think we have maybe three expats on the team. Everybody else is localized.”
KKR’s approach was deliberate in order to build trust and local networks in order to attract the best local investors – and investment opportunities.
The KKR approach to APAC is not unique. In Hong Kong, international banks favour local talent with fluent mandarin, so they can service clients both offshore and onshore. The former head of APAC capital markets at one US firm says: “When we look at our junior cohort we only hire locals. The only expats left in our business are senior people like myself. That’s why I smile when I read about an exodus of expat bankers – there aren’t that many anymore.”
One Hong Kong-based headhunter agrees: “My clients want local bankers. Mandarin is essential. Equally, when you look at the number of expats who were looking to relocate from Hong Kong during Covid, the numbers were tiny.”
Meanwhile, Bae has advice for anyone looking to pursue a career in private equity – make sure you have the industry knowledge to seize opportunities early. “For me, the biggest disappointments are sometimes the deals you don't do, where you don't have the conviction. Where you don't have the ability to really lean in when you should have leaned in. And you know you've missed a big opportunity.”
And for KKR, they didn’t come much bigger than Alibaba. KKR passed up the opportunity to invest in the Chinese e-commerce company before its IPO because it lacked the sector expertise. “We were localizing all the teams. But we hadn't built the industry depth yet. And I look back and say that's a huge miss. Right? It's one of the most painful misses that we probably made in Asia in our early days.”
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