by Brian DeChesare Comments (35)

What’s the Big Deal About Emerging Markets?

Investment Banking Emerging Markets“I notice you’ve done a lot of interviews with readers in emerging markets and other developing countries, but what’s so special about them?

I get the basics from what you’ve written, but why are they important? What’s the big deal about emerging markets?

You raise a good point: there have been lots of interviews about different groups and regions, but never any mention of why specifically they are important.

So, why do emerging markets get so much attention?

Should you change your recruiting strategy or your mythical career path to take advantage of them?

And will they take over the world within the next 50 years?

The Usual Argument

Some news host / newspaper columnist / blogger shows GDP growth rate projections 50 years into the future and says that such-and-such market will surpass the developed world by a certain date because:

  • The country is just becoming industrialized and has tons of room to grow.
  • The middle class is relatively new and growing rapidly.
  • The financial markets are not developed yet, so development there alone will spur growth.
  • If it’s already growing at 10%, clearly it will continue growing at 10% for 50 years, right?

For investment banking, the argument is that more and more deal activity will shift to emerging economies because more companies will be created and more wealth will be generated there.

As companies grow, they need to go public, raise capital, and buy other companies – so investment bankers will spend more and more time on these developing regions and earn more of their fees from there.

As that happens, talent will shift away from developed countries and flock to the “New World” where there’s room for superstars to come in and dominate.

Why I’m Skeptical

Most GDP growth rate graphs go up and to the right… and then even further up and to the right.

It’s like the projections that you create as an investment banker for overly optimistic management teams: interesting to look at, but difficult to take seriously.

No matter how spectacular your economy is, it won’t grow at 8% or 10% or any other aggressive number into eternity.

And remember that far-in-the-future (or even near-in-the-future) projections have a history of being wrong, whether you’re looking at the Soviet Union in 1960, Japan in 1985, or Time Magazine and Jeff Bezos in 1999.

Banking & Capital Markets

Just because a market is growing more quickly doesn’t mean that there will be more or “better” deal activity – or that your experience there will better.

You will almost never gain the technical or modeling skills you would in major financial centers because deal structures are simpler and the companies are less mature.

It’s like the difference between bulge brackets and boutiques: you get a more random and unstructured experience at the smaller firm, or in the less developed market.

Deal activity will definitely increase in emerging markets, but it’s not as if more developed places will disappear overnight: they’ll continue to exist, but will make up a smaller percentage of overall activity.

So Should You Care Personally, Even Though I’m Skeptical?

Probably not – unless you’re from the country you’re interested in or you get the opportunity to move there as a result of working at your current bank.

There are a bunch of problems with assuming you can walk into a new country, get hired, and become the star banker in that region – especially if you have no full-time experience.

Problem #1: Why Should We Hire You?

Remember your old friends supply and demand from economics: do you offer banks something that they cannot already get with the local population?

You don’t have much of a chance of getting into some regions unless you have a serious asset: high-level political connections, a powerful family, or industry experience and C-level executive connections.

And at the Analyst and Associate levels you’re not likely to have those.

Even if supply cannot meet demand in the labor market, banks might still be reluctant to hire you just because it’s more trouble than hiring locals instead.

That may change once you have some experience to point to you, but if you are just graduating and you don’t have anything that matches what they’re looking for, you may want to reconsider that 1-way ticket to Dubai.

Problem #2: Visa / Immigration Issues

This is huge in countries where it’s difficult to get companies to sponsor foreigners (see: China) – and even in some developed markets with borderline-insane immigration policies based on paranoia and political propaganda rather than facts (see: the US).

It goes back to the “What’s in it for me?” question above: unless you bring something unique to the table or have the exact experience they’re looking for, you’re at a disadvantage next to the local student and professional population.

Problem #3: Language / Cultural Issues

Even putting aside all the reasons why you probably won’t learn another language well enough to use it for business, you’ll also run into cultural differences that go beyond simple communication problems.

No one can define what “lack of cultural fit” means, but everyone knows it when they see it: something is just “off” and as a result you never mesh with others.

Maybe it’s the way you start conversations, the way you carry yourself, or how you address others – but all of those tiny details add up to other people saying, “Wait, why are you here again?”


So if you’re just randomly interested in another region but don’t have any background or connections there, don’t spend too much time thinking about it.

When should you think about it more seriously?

1. Being From the Region

If you’re from a developing country and you studied abroad in the US/UK/other Western countries and have experience there, you’re in a much better position to leverage your background.

You won’t have any immigration/language/cultural issues, and banks in emerging markets like people who have had experience in major financial centers, know the technical side very well, and also fit in with their home country.

Plus, having connections there and being able to network more effectively than an outsider will make a huge difference.

2. Transferring Within Your Bank

If you’re not from an emerging market, this is the best way to take advantage of them: wait until you’re working and have established a reputation with senior bankers, and then push for a transfer once you’ve been there at least a year.

It works better if your bank is expanding and they’re looking for people to move, but even without that you can pull it off.

You’re probably wondering what specifically you should say to do this, but there’s no magical script: you work with senior bankers on projects, get to know them, and then around the time bonuses are being awarded, casually bring up your interest in another region.

See what their reaction is, and if it’s not an outright rejection keep asking about it and find out what you need to do to make it happen.

If You Have the Opportunity, Should You Go?

If you work in one of these regions, you get:

  • (Potentially) improved hours
  • More responsibility / client interaction
  • Fewer networking opportunities
  • Less technical knowledge / modeling work
  • More limited exit opportunities

So it’s a trade-off: do you care more about working for KKR or Blackstone in New York, or more about having a better life and more contact with executives?

It’s more difficult to move from an emerging market to a developed one than to do the reverse – so starting out in a major financial center and then moving elsewhere is often a better bet.

…But depending on your background it might still be a good idea to start out in another region.

For Example…

Let’s say that you have a solid background academically – a well-known but not top school, good but not perfect grades – and that you have decent internships, but nothing that makes bankers say, “Wow!” You’ve done some networking but you haven’t exactly called hundreds of alumni.

Your chances would improve greatly if you went back home and focused on your own market rather than the hyper-competitive US / UK ones.

Yes, you may not have as many options afterward but that is still way better than sitting around and not doing anything related to finance just because you don’t look as good as others on paper.

Time to Move?

If you’re interested in other regions just in passing, read all about them here but don’t go beyond that unless you have a specific way to get in.

But if you have a legitimate connection or your bank is expanding and you want to specialize, get better hours, or gain more responsibility, then maybe emerging markets should be a big deal to you.

For Further Reading

M&I - Brian

About the Author

Brian DeChesare

is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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  1. mungringla

    Hello Bryan,
    Thanks for your article. Having recently completed my MSc in Economics in the UK, i am soon starting my internship with one of the FinTech firms based in London. Following this, i will be faced with two options. These are: one, trying to get myself a permanent role in financial services here in London, and two, going back to Myanmar (my country of origin and i have been living in the UK for more than 10 years) to explore opportunities with private equity firms. So it would be great if you could let me appreciate your thoughts on my options.
    Thanks in advance.

  2. Hello Bryan,

    Your Article was really good.

    I have done my Masters in Finance in London and now I am working in Angola, an Emergent Market, for Standard Bank group. I am an Investment Banking Analyst graduate, my plan is to be here for 2 to 3 years and then go back to London or other developed country. what I mainly do here is Debt Products like Project Finance, Leveraged and Aquisition Finance and property FInance and Corporate Finance. Do you think I will have good chances in finding a job in a developed market? I am also CFA level 2 candidate and I can speak 3 languages.

    Thanks for your advice.

    1. Hi Manuel,
      I just posted on a comment of another Manuel, probably it is you… I would like to ask you some questions if you don’t mind. How can I contact you?

  3. Hi Bryan:

    Coming from one of the Mandarin-speaking countries and studying in the US now, I was wondering which banks in the US have a emerging markets division with a focus on China/Chinese-speaking markets instead of LATAM? I know RBC has EM S&T but does a Global Markets division in banks like DB and Barclays deal with emerging markets at all, or just the regular DCM/ECM-esque stuff sugarcoated with a fancy name?

    I appreciate your help,

    1. M&I - Nicole

      Yes – most banks have emerging markets S&T, DCM & ECM desks.

  4. Hey Brian, I’m starting to see the major financial hub ->emerging market as a possible route for me since I’m from one of this countries. My question is, how many years would you advice are necessary for someone who is intending to follow this path to get the technical abilities a major financial center would provide before moving back to his own country?

    Regards, Alex Garcia

    1. M&I - Nicole

      It depends. Some peeps stay for a year or longer. It really depends on the circumstances and situation

  5. Hi Brian,

    I was wondering if you (or anyone else) could give me your thoughts on Brazilian IB BTG Pactual. In particular the HK office and M&A group – not interested in trading.

    You may never have heard of them (I hadn’t until a couple of weeks ago) but they used to be owned by UBS and are heavy hitters in Brazil and throughout the developing markets and have 1,000+ bankers.


    1. I really don’t know as I know almost nothing about Brazil so you’re better off asking someone else there. I assume they’re good based on what you said.

      1. Itau BBA and BTG Pactual (ex UBS)are the top IBs in Brazil. They are considerably bigger ($ in deals) than any other american or euro BB present there. In terms of compensation, at the associate level and on, they also pay higher bonuses than those from NY banks.

        1. M&I - Nicole

          Thanks for your insights!

  6. Hi Brian!

    I cannot express how helpful M&I was during my interview process. I’ve been trying to decide between 2 offers and the deadline is very soon. One of them is GS S&T in Bejing and the other is Barcap IBD in Hong Kong. I know that I should be choosing between if I want to do S&T or IBD but having not done either I can’t say definitely which one I want to do. Which would you recommend?

    Also, one of my considerations is full-time recruitment in case I don’t get a return offer or do not enjoy the internship. In terms of placing myself for possible FT recruitment in the US or in HK or anywhere which one would you recommend?

    I really appreciate your help.

    Thank you so much!

    1. I would say HK because it’s easier to network and recruit elsewhere if you go there, Beijing has a more limited finance industry.

      1. Thanks so much! If I had the opportunity to work in GS S&T in HK instead of Beijing, which one would you choose (GS S&T or Barcap IBD)?

        They are having trouble putting me in the beijing office instead of the hong kong because I am an american citizen.

        Thank you so much!

        1. Really depends on whether you want to do trading or IBD but I would lean toward GS because they have a better name if you are still undecided

  7. Hi Brian, congratulations on your blog !

    I spent most of yesterday evening reading it and I went through most of your posts.

    The way you describe M&A is really accurate, and it’s obvious after reading a few lines that you actually worked in it.
    I’d like to react on a few of your posts and ask a question.

    I really liked what you said about “the track” or the mythical career path. I graduated from a top business school, and this is a place where you meet those people whose are always first, who always have top grades, and whose path seems straight to the top. They spend most of their time and energy making sure that they are always on the path. If I look at my school’s report, in 2007 33% of students went into banking and 33% into consulting, and 15% in audit. The reason for this is peer pressure, ”if you’re not in M&A you’re a loser”-mentality. I think the economic crisis had that positive effect that a lot of us had to start thinking seriously about what we really want to do. Since there just were not enough jobs left in finance and consulting, we had to think and find something else. I am now much more satisfied with my job than I was back when I was in M&A, even though I have half the income.

    About M&A. I did a 6 month internship there in 2008 in Dubai. My job was really close to what you are describing in your Daily Life posts : computing ratios in Excel, very few Excel financial models for the merger, powerpoint pitches, binding books at midnight. But because of the crisis, there was no deal during the 6 months. Not just in my team, but in the whole bank. (It was a mid-sized bank based in Dubai). So we were just doing pitches, no execution. And because of the crisis, or maybe because of Dubai, the hours were not as long as you describe. We stayed until 20:00 on average, though once in a while we did stay until 2 AM. Never worked the week-end. My coworkers were going out twice a week, living the high life just like in your “models & bottles” video. They were really cool with me and brought me along. I would not advise going to work in Dubai though, unless you are from the Middle East and are familiar with that culture.

    I am now working in renewable energy for a multinational corporation. I was considering moving back into finance, because I would like to be done with my student loan. My plan was to work in the energy or utilities team of an investment bank. But reading your blog, and how you explain that banks want people with no experience because they don’t question orders, I know that I just won’t fit in. What I like in my current job is that I can take initiatives and launch new projects. Going back to being a mindless nolife number cruncher is not going to be possible for me.

    I was thinking maybe of doing project finance, structured finance, to help finance energy projects, instead of M&A. What do you think about that? For me it is important to create something in my job.

    1. Those are fine alternatives, the only downside is you would be more specialized so it’s harder to jump into non-project-finance-related fields afterward.

  8. Hi, great post! I have a time-sensitive question regarding recruiting.

    I’m currently in the middle of applying for SA positions for BBs and am thinking of applying to both HK and NYC offices. I have been told before that applying to two locations within one firm is acceptable, but HK recruits 1-2 months earlier than NYC and as a result, their interviews are also 1-2 months ahead.

    HK interviews are generally held over the phone starting in December, while most NYC applications are not due until January. If I mess up my first round interview in December with the HK office, will that put me at a disadvantage for getting first rounds in NYC?

    My primary focus in NYC (since that is where I want to be working after graduation) and I am really worried about this. Most of the BBs actively recruit on my campus for their NYC positions and I feel like I would have a better shot with NYC than HK. If that is indeed the case then I would reconsider applying to HK at all. However, if my performance for HK interviews dont have any effect on my chances for NYC then I would go ahead. I am currently studying abroad in China right now and figured that perhaps that would give me a slight edge for HK positions.

    Any help would be much appreciated! CS’ HK application is due this Saturday and I have to figure out if I want to go ahead and submit it.


    1. If you have a better chance applying for New York, do that and skip HK…. poor performance in an interview with one office can actually hurt you elsewhere. I would not bother applying for HK unless you have native-level Mandarin speaking/writing as they are looking for mostly people from mainland China who are studying in the US.

  9. Brian,
    How about an article or two about LevFin. I think I might be interested in what these guys do, so I want to see what the group actually does in (hopefully) more detail. Can you do it? I’ll give you an e-cookie if you do so. :)

    1. LevFin and DCM have been on the list for a long time.

      Here’s the issue (and I think I’ve explained this before on other articles here): I personally do not know the in’s and out’s (and no one else who contributes has worked in those roles either), and so it would require someone else to step forward and volunteer to be interviewed. Many people are unwilling to do that because of privacy / anonymity concerns.

      So it is on the list, but I am limited by who volunteers to help and who is comfortable with it.

      Lots of interviews are not even printed here, either – sometimes they just don’t turn out well, or it repeats too much information, or they can’t disclose enough, and so on.

  10. Hi Brian,

    Great article as always. I actually had a quick question about recruiting – I’m a senior at a target school who couldn’t eventually land an offer through the normal school recruiting channel despite multiple interviews and final rounds. I’m trying to reach out to boutiques and middle market banks, but I was also thinking of delaying graduation for one more semester and take a crack at internship recruiting in the winter and full time during next fall again. Do you think it’s a viable idea, given some banks might have my info under their HR database?

    1. It’s fine, but there is always a chance that they will remember who you are and ask about it. Don’t let that stop you from applying again, though.

  11. Hey Brian, I am from Australia. What are the chances of me breaking into an US investment bank.

    Let’s say if I start working in an US investment bank in Australia. (Citigroup or BoA Merryl Lynch). What are the chances of me breaking into US after working as an analyst in Australia for a few years?

    1. It could happen but again, visas are a huge issue in the US and it is not easy to get around that. Your chances are better if you start at a US-based bank in Australia and then work there for 1-2 years before asking to transfer.

  12. I graduated in May and started as an analyst at a small M&A boutique in July. I would like to lateral to a bulge or top boutique after a year. My current firm wants me to give them a month notice if I plan to leave (to stay on good terms). When I start talking to recruiters/friends at banks about lateral hiring next year, how do I work around this? If I get an offer from another bank to I have to leave immediately or can I get time to give notice?

    1. Just say that you enjoy your firm but if the opportunity comes up you would not hesitate to take it. Tell your existing bank that they gave you no choice and that you had to accept in a short timeframe. Do not tell them anything unless you have an offer lined up first, there’s no point in “previewing it” and giving more advanced notice prior to leaving as it could easily backfire.

      Yes, your firm might be annoyed at you when you leave but that is just the nature of finance, people hop around all the time.

  13. But growth rate graphs *do* go up and to the right. Think US Debt!

    The paragraph that you wrote on being skeptical took me back to a time when you compared the mindset of a lawyer and banker.

    You wrote that lawyers work to look out for what can go wrong; bankers work to find new ways to take risk.

    Which brings me to my question: Do bankers feel pressure from clients (or their MD) to fill their models with assumptions that increase valuations?

    Or do I have it all wrong: Must potential clients be skeptical about what bankers tell them because they have an incentive to produce a high number to gain their business when they are looking for someone to represent them?

    Finally: Just curious, did you settle down for good somewhere abroad, or will you return to The States?

    1. That’s true, but eventually if the debt gets too high the country goes bankrupt, at which point it would stop rising.

      Bankers always have to promise aggressive valuations – it’s just like how equity research analysts are bullish on 90% of companies. Some potential clients are savvy to this but you always run into newbies who get taken for a ride by bankers.

      I lived in Asia since last year but will be going back to the US sometime next year – don’t want to be here long-term.

  14. When you say the deal structure is simpler or modeling is less technical in emerging markets,does it mean that say for example,a $1Billion merger happening in US will have more complexities (not just in models but also negotiations,due diligence) built into it than that happening in Asia…
    I mean i was going thru the Saudi Arabia i-banking article,and just beacuse in west you have more addbacks,EV includes capitalised lease/pension obligations does it mean you are learning more..?

    1. That is a good point, you don’t necessarily “learn” more by going through all the details of a filing in excruciating detail, it just takes much longer. It’s good to do a few times to learn the ropes, but past that it gets quite tedious.

      That said, there will generally be more complexity to the companies because the executives have better-developed plans and more detailed projections, and so you can do more analysis around them. Some emerging markets deals are more complex especially given the high number of cross-border deals, but the modeling aspect is usually simpler.

  15. Hi, great article!

    I have a question which is not quite related to this article but about problems #1 and #2. I am from Asia but studying in a target school in the UK now. I’ve heard about competition being extremely tough for non-EU citizens to work here (possibly from limited quota of work permit).

    With high taxes and EU regulations, I am thinking about moving back to HK/Singapore after studying here (eligible to work in both countries).

    My question is: Do problem 1 “Why should we hire you” and problem 2 “Visa issues” pose a huge obstacle that I must overcome if I decide to work in the UK?


    1. The visa issues one will be more of an issue since that’s enforced by the government and banks can’t do much about it. Given that you know the language and have studied in the UK, the first one won’t really be a problem for you because you’re on par with anyone else from there.

    2. Banks in UK hire from a global talent pool, relax. While it might not be as extreme, the London offices are at best a plurality in terms of local talent to international and for many there are more continental Europeans and US expats on Canary Wharf than Brits. So IMO think visa won’t be much of an issue, if they want you at all.

      1. That’s a good point – I have heard from people before that visas can be an issue in the UK, but at the very least it’s much easier than the situation in the US.

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