Editor’s note: The following is an interview that was first published on Mergers & Inquisitions on August 7, 2013. The interviewee, who wishes to remain anonymous, began an investment banking career in Hong Kong and talks about quitting her job to pursue a career in impact investing.
Brian DeChesare: You mentioned that you had worked in banking in an equity capital markets (ECM) role in Hong Kong. How did you get there in the first place?
Sure. I was born and raised in Hong Kong, and went to the UK for university. I applied to a lot of internships while there, but this was in the depths of the last recession and it wasn’t exactly the best year for the banking industry.
Still, I had good grades and a top school on my CV, so I won an offer at a bulge bracket bank in Hong Kong, started out as a generalist, and was then placed into ECM.
At the time, IPOs were all the rage in Hong Kong and there were more deals than my team could handle. So I ended up staying there for a few years, figuring that it was my best option if I wanted to stay at that bank in that region.
Brian: So I’ve heard some mixed reports about investment banking and ECM in Hong Kong – we’ve covered the region and the group separately before, but not together. How would you describe it?
The teams in Asia were much smaller and the training was “dynamic,” which may seem “disorganized” at times.
As you might have heard, the hours are very, very long (or at least they were when I was there) because of the deal activity and the time zone differences we worked across.
The US team joked that they could call us at any time day or night, and someone would be here to answer the call.
My team was mostly people from mainland China and HK. In addition to ability and qualifications, language plays a huge role and they’re almost always looking for native Mandarin speakers who studied in the US or UK.
There were no Patrick Bateman-types on my team or any other stereotypically crazy bankers, so in that sense it was okay, but the hours and unpredictable workload definitely got to me after a while.
I learned the most on the “soft skills” and “how to handle client requests” side, as you might expect in an ECM group.
Brian: Right. So a few years into it, you decided to leave and go save the world instead?
Haha, well, I wouldn’t put it quite like that. Part of it was that I wasn’t interested in the traditional exit opportunities, such as private equity (PE) firms that only work with companies based in mainland China or corporate investor relations roles.
I had studied politics and economics at university and was always very interested in social issues, so going to the World Bank or other NGOs like that had been on my mind.
At the same time, though, I didn’t want to lose the skills I had gained in banking so I wasn’t keen to join a traditional non-profit.
Without a clear idea of where I’d be headed, I decided to quit when my 3 years were up – against everyone’s advice.
Brian: Because you didn’t have the time to look for new jobs otherwise?
Partially, yes. But the other factor was that sometimes you can’t tell what opportunities are out there when you are 100% focused on your job.
I knew that a gap on my resume would be a problem if I went for traditional PE or banking roles, but I wasn’t interested in those anyway.
Brian: So you quit abruptly and then started looking for something that would interest you. What was your first step?
I had heard about companies that invest in search of both social good and profit, so I started learning what I could about them.
This is a VERY small and personal industry, so I started cold emailing people at organizations related to “impact investing” here, and volunteered to organize conferences such as the one that the Rockefeller Foundation hosts.
Brian: You just used the term “impact investing,” and I’m not sure how many readers are familiar with it since it’s relatively new. Can you explain what is?
Sure. The idea is to invest in companies that attempt to turn a profit and do good for the community, environment, and world at large.
It’s like a cross between non-profits and PE and VC firms.
Examples of companies or ventures that impact investing funds might invest in:
Another good example is a “social impact bond,” where the government raises money from banks and private individuals and ties the payout to the outcome of the organization that borrows the money.
Since the government is paying out bond interest, investors perceive it as “less risky” than investing directly in the organizations.
The government first came up with this concept in the UK, where it used these bonds to finance projects that would lower rehabilitation rates of ex-offenders.
They’re willing to do this because the private sector is taking on some of the risk in creating services that help everyone, which might ultimately reduce expenses for the government in the long-term.
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