An international perspective on the dynamic private equity industry
Alex Emery ’97 MBA is a partner at global investment firm Permira, where he also serves as chairman of Asia. He has been with the firm for more than twenty years. Currently based in Hong Kong, Alex has spent his entire career working in Europe and Asia. He spoke with us about his experience making the leap from consulting to private equity and working on the international stage.
I was born in France and raised in Japan; I have always been familiar with and intrigued by markets throughout Asia. I came to the United States as a college student, majoring in political science and East Asian studies. My path to private equity was unusual. After graduating from the Kellogg Two-Year MBA Program, I joined McKinsey & Company in London. It was during the height of the dot com boom, when a lot of organizations were setting up internet businesses. I became intrigued with entrepreneurship, so I joined McKinsey’s incubator. It was the best of both worlds — I was able to get start-up experience without the risk. But, I realized many of these start-ups likely wouldn’t survive.
When the internet bubble ultimately burst in 2000, I returned to regular consulting in the consumer/retail sector. But I quickly realized that it wasn’t as exciting to me as taking on a principal role as an entrepreneur. I recognized the other way I could get involved with start-ups was to help fund them, as an investor. I was five years into my tenure at McKinsey, and I had to make a decision: Was I going to transition to something new or stay and pursue becoming a partner? I decided it was time to pursue something new, and I joined Permira.
Transitioning to private equity and how the industry has evolved
During the interview process, I was very impressed by everyone I met. Everyone was thoughtful and incredibly bright. Permira was well established in Europe, and I knew it would be a good fit. During my time at Kellogg, I had no idea I might be interested in buyouts. I was originally interested in early-stage companies, but it turned out I really enjoyed the big ideas. I had a lot to learn. At that time private equity was still relatively young in Europe, allowing me to make a smooth transition from consulting.
Unlike in the United States, most European senior leaders in private equity are former consultants. That is starting to change, and we are now hiring a lot of former investment bankers because of the quantitative skills they possess. I have found that individuals with strong commercial judgment, solid negotiating skills and the ability to effectively build relationships tend to do well in private equity. You need accounting and finance skills, but that is expected.
In the past twenty years the entire industry has become a lot more specialized. You now need to understand a specific sector in depth. It will help you originate deals, you will know the trends, you will know the right people and you will see the opportunities before others. Private equity leaders are looking for people who can come up to speed right away, and who know where the drivers and opportunities are. The industry needs individuals who have a good sense of how businesses can be improved.
Deals have gotten bigger and will continue to grow, and the average size of funds has also gotten bigger. The next generation of private equity leaders will need to be able to successfully operate in this type of environment
Expanding into Asia
I spent my first three years with Permira in London. In 2005, the firm began thinking about expanding globally. I was one of a few people who had any knowledge of Asia, so firm leadership asked me to do some research. I put together an internal presentation and the leadership team asked me if I would implement my ideas. The thought of returning to Japan as an adult excited me. I knew this role would be a challenge personally and professionally, but I was intrigued by the opportunity to pursue something new. I spent five years in Tokyo before coming to Hong Kong, where I am currently based.
Private equity is still incredibly young in Asia, compared with the United States. Asia is also unique in that it has far less sector specialization. Private equity in Asia also presents a different set of challenges, and it is difficult to operate the same way in all Asian countries. There are so many different currencies, while in the United States there is only one, meaning anyone in any United States office can work on a deal. Asia isn’t quite that simple; the deals tend to be scrappier. Private equity in Asia requires a lot of heavy lifting.
Advice for future leaders
I tell students who are looking to pursue private equity internationally to look for opportunities at a global firm, start in the United States and learn as much as you can. Find ways to get involved in other geographies. Becoming familiar with business models around the world is critical. Think about how you want to package yourself: For example, are you an expert in tech or healthcare? That will help you pivot to another country.
Success in private equity is all about being well-rounded. Being able to work in a team environment, communicate effectively and think critically are the characteristics that truly make Kellogg graduates in this field unique.