As Investment Associate at an asset management company, Jonathan Kong CPA is responsible for finding investment opportunities, creating investment returns while generating value for the companies it has chosen to invest in. He tells A Plus how he adjusted to working in the commercial sector, and how his CPA background and skills continue to help him add value in the private equity industry
What is your current role and responsibilities? How is it going so far?
I am involved in the full investment cycle of an investment, from origination and execution, to post-deal monitoring and exit. In particular, we look for companies that are worth investing in, which we help to grow once investing in them. We are always supportive of the new products, technologies and services of the portfolio companies that we invest in. I joined the group two years ago and though it hasn’t been easy, it has been an extremely eye-opening and rewarding experience so far. Before this, I worked at a Big Four for three years in its audit team, and then at another Big Four for two years in its transaction services deal advisory team. There was a lot to learn after switching to the commercial sector. At the beginning, it was about learning how to think like and communicate with the people in this field, most of whom came from an investment banking background. I had to shift from looking at the details to looking at business from a more commercial perspective, while also identifying my strengths, and knowing where and how I could add value with them.
What are the most rewarding and challenging aspects of your role, and why?
The most challenging aspect is indeed identifying the best companies to invest in and helping after investing in them. This requires performing due diligence work, so looking at the financial, commercial and legal risks of investing in each one. If the risks are low, I need to identify the company’s merits and ask questions such as “will investing in them bring substantial financial returns? Will it grow commercially? Will it help society?” If I see potential and choose to invest in a company, I need to negotiate with the counterparty for the best investment terms, which includes identifying a suitable valuation. After investing, I face different challenges every day since each company is different. For example, one company might need help with a financial projection, while another company – say an overseas start-up – could need help understanding rules and regulations before entering the Mainland market. It’s my job to find the right solution to support them. What is most rewarding is seeing these companies, especially start-ups, to grow from zero to one. Some of them might have good products and solutions that can benefit the society – but haven’t reached the market because they lack the funding and support. So I find it very meaningful and interesting to use my skills in accounting and investment to help them out.
What inspired you to become an accountant?
It would be my family. Both my mum and dad are also CPAs, so when I was a kid, they’d often talk about their day at work over dinner, which I found interesting. I was also good with numbers in school, so I decided to major in mathematics in university, where I took a few accounting modules. With my passion for numbers and family background, I knew that being an accountant would give me a strong foundation. During my time at the Big Four, I began investing money in the securities market on the side and became interested in knowing how to evaluate a good company, and what separates them from those that appear to be doing well. You can say that’s where my interest in investing came from, and why I eventually decided to switch to working in this field.
What has been the biggest challenge you have faced in your career so far and how did you overcome it?
It would be going from a professional services firm to a corporate. When you work at the Big Four, you go through a lot of training and the work was more systematic at the junior level, and it was relatively easy to ask for help. In the commercial world, though you may have your bosses and your team, you’ll often be expected to work and figure things out on your own. The work and the environment is so dynamic at all working levels. So the challenge was adapting to this new environment while changing my mindset from a more financial back-office mindset to a more front-office one, and learning how to look at all factors – not just financial ones – when evaluating a business and helping it to grow after investing.
How do you think the Qualification Programme (QP) has helped you in your career so far, or prepared you for your current role?
The QP had a huge impact on me. I didn’t have much of an accounting background when I attended the programme three months before I started to work in audit – I didn’t even know what debit and credit are! The QP gave me that foundation of accounting and financial knowledge, which I still rely on today. If not for the programme, I wouldn’t know how to evaluate financial statements as quickly as I do now. All four QP modules were really useful, but module B corporate financing is particularly helpful in my role now. It covers valuations, cash flow, forecasting, discount and cash flow models, which is knowledge I need at work. Currently, whenever people have questions about accounting, corporate finance and audits, they come to me.