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Profile Asset Management Market Update 2018

The following report reflects our insights on the Asset Management employment market in Asia. It highlights the key trends we observed in 2017 and pinpoints emerging themes across the industry for the next 12 months, including identifying the major factors impacting hiring and talent movement. We expect to see the pace of recruitment activity in 2018 continue along the same upward trajectory as it ended last year. With strong fundamentals fuelling financial markets, there is no reason to think that the increasing human capital demands that we saw in asset management in Asia in the second half of 2017 – and that we still see this year – will slow. This is a breath of fresh air in the wake of 2016, when fee compression and lagging performance dictated a tough year for the markets and industry alike. But since the landscape turned more positive in Asia around mid-2017, nobody has (yet) looked back. We are busier now than at any time since the pre-2008/2009 crisis – across each of the front-, middle- and back-offices in both the wholesale and institutional sides of the asset management business. With over 40 staff onshore, we have big ambitions for our growing China business, in line with the ever-increasing demand for both inbound and outbound expertise. BUILDING ON MOMENTUM A look at the key trends in 2017 can help us to understand what is likely to influence talent movement this year (see the box ‘In demand in 2018’). Strong performance meant most managers were better-placed than during the previous 12 months, with notable appetite for multi-asset, more sophisticated fixed income, passive strategies and alternatives solutions. Broadly, the last 12 months saw asset owners – ranging from insurance to sovereign wealth funds to corporates – look to strengthen their own investment capabilities. China was the other big theme for the year, shaping firms’ strategic planning around hiring. Regulatory changes in terms of WFOE structures and joint venture ownership has led to a significant amount of interest among foreign asset managers, luring them to invest time, money and people power in the domestic market. In short, their onshore recruitment efforts have hit unprecedented levels. In demand in 2018 Multi-asset and structured solutions professionals, plus people with alternatives expertise across all sectors Compliance officers and operations practitioners – with an ability to navigate China important, especially for WFOE and China-facing businesses Experience in China inbound investment – as foreign firms look to establish a foothold in the vast domestic market, to manage Chinese instruments onshore Specialists in China outbound transactions – as onshore players seek a slice of the action globally Individuals with a solid institutional sales track-record Expertise and knowledge in private credit and special situations FRONT OFFICE – INVESTMENT & PRODUCT 2017​ Yield was the buzz-word last year. With stock markets rallying for the full 12 months, investors were drawn to Asian and global stocks, along with other equities products. Although fixed income took a bit of a back-seat, multi-asset funds maintained their strong momentum from 2016. The industry had strong appetite for individuals across several roles. For example: Multi-asset product specialists had a stellar year over last 12 months – we expanded our book of business in this area by 20% to 25%, ranging from asset allocators to quants, with experienced portfolio managers sought after too Factor-based and passive investment specialists benefited from the impressive volume of capital pouring into ETFs – in turn, this highlighted the shortage of quality candidates with the right experience to fill the gaps In the alternatives space, hedge funds became as prominent as they have been for a long time On the private side of the business, the priority moved to private credit and special situations Further, from a skills perspective, last year saw a notable move by asset managers away from their focus in 2016 on product specialists and client portfolio managers who performed a more narrowly-defined role, and towards individuals with the capability to also perform a client service function – as a conduit to business development and sales. 2018 The trends we saw during the last 12 months are likely to maintain their momentum this year, assuming markets remain robust. In particular, we foresee demand in 2018 in several key areas: For equities specialists, with a specific need for A-Shares analysts and portfolio managers For individuals with multi-asset expertise, especially experienced asset allocators and quants For senior client portfolio managers, with the pecking order being: multi-asset, then fixed income, then equities FRONT OFFICE – DISTRIBUTION 2017 The multi-year war for talent across Asia in the wholesale asset gathering space (retail and private wealth) continued over the last 12 months. However, the demand shifted towards those with the investment product content knowledge combined with the intellectual horse-power to switch strategy and asset classes seamlessly. This reflects subject-matter expertise being valued above and beyond “connections” and old-school sales skills. This was evident as new entrants in the asset management space as well as established players looked to further strengthen their teams – especially in terms of dedicated private banking distribution expertise. Institutional sales roles also saw a marked comeback in terms of demand, as several strong houses sought to expand or upgrade their teams.​ Many firms took several approaches to try to deepen the talent pool: Exploring candidates from peripheral businesses, including private banks, alternatives firms and investment banks Identifying individuals with strong investment knowledge as well as networks Seeking those people able to ‘up’ the stakeholder engagement – which is key in the current environment, since gone are the days of simply ‘wining and dining’ a client; salespeople must now be market-savvy; without the right knowledge base and narrative, their value is now hard to justify 2018 More demanding clients yet fewer approved support headcount leave asset gatherers with little choice but to adapt: indeed, the blurring of the lines between asset gathering and client servicing will continue this year. Working with “new wave” distribution partners such as Ant Financial and Tencent will be a theme which continues to both excite and confuse the space. Without doubt, everyone sees the opportunity to collaborate with these technology-based giants – however, the trick seems to be the “how” not the “why”. Some of the trends we foresee in 2018 include: Distribution continuing to dominate for the foreseeable future within wholesale, and especially private banking Growing demand for a hybrid combination of a product and sales candidate who can function between a product specialist (managing technical conversations on the one hand) and a business development executive (performing more of a sales-led role on the other hand) Those asset gatherers with proven experience and a record of success being able to command much better packages than was the case several years ago (this is an important impact of unabated demand for high-quality distribution candidates in the asset management space) FRONT OFFICE – MARKETING ​ 2017 The most notable challenge for the role of marketers in 2017 was the need for them to be more digitally-minded. Experience in digital marketing, as well as the customer and user experiences, was – and remains – key. Love it or hate it, there is a perception that Asia has lagged on the digitisation of the asset management business. There was a prevailing feeling during 2017 of playing catch-up – and this has continued into 2018. However, we do not believe this should be considered a negative; indeed, there seems a very strong commitment to embrace change and push forward with real vigor into this newer reality of the marketing “seat at the table”. One of the major themes was the search for talent from outside the industry, and we do not see this slowing down. But the trick is inspiring digital talent to make the move into asset management from other “cooler” industries. 2018 Demand for digital expertise will gather pace this year. And as disruptive technologies dominate this marketplace, we see asset management firms adapting their hiring strategies in two main ways: Hunting for ways to improve and increase their market access and penetration via various social media and by leveraging smart tech to deliver their brand and raise their profile Importing digital marketing talent – both in terms of bringing people to Asia from overseas markets, such as the US and Europe, as well as from outside the financial services sector, including technology, media and consumer goods businesses One thing is clear: those players that have not aggressively adopted digitialisation strategies will continue to need to play catch-up. A definite trend we are observing is that companies are putting more senior or high-profile employees and leaders into this space. Marketing and digital alliances are possibly the future of many firms and this is reflected in the rising importance of the function. ​ INFRASTRUCTURE ​At Profile we concentrate on the following sub-sectors within Infrastructure: Operations (Ops), COO & Business Management (COO), Accounting & Finance (Fin) and Technology (Tech). 2017 The second half of last year saw a marked pick-up in hiring needs across infrastructure, with a real focus on meeting the needs of the growth and success of the business lines. However, the excitement was tempered by the fact that, in many instances, companies have certainly been careful not to over-hire and over-extend. The mantra of “doing more with less” has held true in most cases. Within Ops and COO functions across asset management, some of the most notable trends in 2017 included: A growing number of roles require fluent Mandarin capability, amid efforts by foreign firms to build relationships with Chinese clients, including domestic banks Increasing demand for project management expertise, especially for China-related work in line with the focus on WFOE structures More need for very specific product knowledge, mainly reflective of the continued expansion of fixed income and multi-asset teams More specifically, our hedge fund client base stepped up the need for COO roles. These have tended to be generalist positions, targeting candidates with an accounting background to support the need for greater stringency around financial governance. We also saw a resurgence – after a few subdued years – in client services and operational positions in prime broking. 2018 We have seen the pace of activity from the latter part of 2017 continue. In fact, we are getting even busier across several areas of Infrastructure. For example: Ops and COO functions continue to require extra headcount, with the same product skills and project experience as in 2017 still in high demand Tech is seeing increasing appetite across the board in people with experience in technology and digital, especially including big data and analytics – some of our buy-side clients are even looking to build-out their capability in artificial intelligence and robotics Also in Tech, cybersecurity is a front-of-mind, in-demand area of expertise, given recent data breaches Within Fin, the landscape remains broadly stable among senior finance executives; there are only a few hires at the chief financial officer level, although this is more common at the moment in the alternatives space. Internal controls, however, is seeing some movement. Internal audit and operational risk professionals are in demand – from vice presidents upwards. LEGAL & COMPLIANCE 2017 We were not surprised to see increased demand for legal and compliance professionals across asset management and insurance, in line with the ever-tighter regulatory environment. MiFID II has, for example, been a key driver of financial institutions adding resources to deal with the extra reporting requirements – plus, of course, the China WFOE demands. As a result of these trends, and despite budget constraints in several industries, we saw steady hiring within legal and compliance teams. Some of the specific skills and roles in high demand included: Technology/data privacy Regulatory compliance and financial crime Product advisory Compliance testing and assurance Across all roles, there was a trend towards more of a hands-on approach to employee management, with greater investments in training and internal processes to ensure standards and staff are in line with best practice. This was also influenced by heightened awareness about issues around discrimination, harassment, whistleblowing and occupational health. Meanwhile, China-focused roles dominated the attention of many asset management and private equity firms. Fluent Mandarin language skills continued to be a focus for many employers. 2018 Across all types of organisations, we expect many employees to remain focused this year on several areas to drive either retention or departure. These include: career development, performance management and enhancement, work/life balance and job security. Some of the specific legal and compliance-related trends we predict in 2018 include: China continuing to feature prominently in planning, driven by market dynamics such as the introduction of new WFOE licenses and growth in new industries such as fintech An increasing need in the insurance industry to add resources and upskill, in order to tackle challenges from digital disruption The growing importance of senior leadership positions – such as general counsel and chief compliance officer – to help manage ever-expanding legal and compliance departments amid the brighter spotlight on these roles HUMAN RESOURCES 2017 A relatively subdued first half of the year saw comparatively fewer roles available within financial services compared with other industries. From October, however, asset managers and boutique investment houses started to make their mark. In particular, there was a focus on senior HR practitioners as well as specialist roles, such as: HR business partnering Talent management Compensation & benefits Operations – including HR information systems and analytics Technical HR – including strong business acumen Although individuals seeking new roles seemed to be motivated by an increase in compensation, we saw more and more candidates leave firms due to other reasons, including: a lack of opportunities internally to develop; a limited work/life balance; and under-appreciation by their managers. Smaller asset managers were also increasingly capitalising on a loss of appeal among many HR professionals for traditional banking roles. 2018 The market has already accelerated again this year, with a number of new hires approved across a range of roles. Some of the notable trends we expect to see in the year ahead include: An uptick in front-office roles in expectation of increased market activity Changes in the senior HR business partnering space within asset management that will create more movement and opportunities Growing confidence within the candidate market, with many more people open to a move A focus among candidates on holistic offers that include benefits plus a work/life balance, rather than an increase in base-line salary Insurance companies continuing to hire, therefore attracting good talent away from banking and investment houses Below is our placement history in Hong Kong, Singapore, Shanghai and Beijing for 2016 and 2017 – based on Client Type, Position Type and Gender. Placed Asset Management Professionals by Client Type ​ Placed Asset Management Professionals by Position Type Placed Asset Management Professionals by Gender MARKET FOCUS – CHINA China continues to grab a lot of attention from asset management firms globally. Yet expanding with the right headcount in the Mainland to capitalise on the unprecedented scale of the opportunity that is coming from multiple avenues is much more challenging than many players realise. At the same time, the number of highly-motivated and ambitious Chinese managers vying for talent further accentuates the demand/supply imbalance.​ Inbound We are seeing more China-related searches at the moment than we have in recent memory. Certainly, the focus among foreign firms to set up a WFOE is playing a key role in this. Yet although predictions among market observers are that the number of investment management WFOEs could well more than double from the current 25 to over 50 by the end of 2018 (15 WFOEs were established in 2017) – staffing them will prove challenging. This is the case both for new players that are looking to fill leadership roles to set up the business from scratch, as it is for existing players that want to expand their China team from one or two people to between 10 and 20 on the ground. Any firms expecting to be able to hire less than 10 individuals focused on money management plus clients and relationship management need to realise that by doing so, they will lack both the manpower and expertise to effectively run a WFOE that manages private funds. Instead, our research indicates they would require one or two senior portfolio managers per asset class, and three to four analysts – and likely more. Some would argue, if one analyst covers 30 or 40 stocks, for instance, firms will need anything up to six or seven analysts for equities alone – and even then, their overall onshore coverage will be relatively limited. Added to this, a WFOE requires a suitable general manager, a compliance officer, people within infrastructure roles focused on operations and technology, and also salespeople. Another significant human capital issue is that, usually, sufficient English language skills are essential for individuals in senior roles. This applies to general managers and compliance officers, in particular, who will need to be able to liaise with their counterparts in Hong Kong, Singapore and further afield – and meet expectations that they can live up to international best practice to help colleagues get comfort in understanding the reality of the situation onshore. Further adding complication to an already-difficult task of staffing a WFOE is the fact that current structures all have subtle differences. This means the right model is not yet defined nor proven. Outbound Perhaps one of the biggest hiring needs, meanwhile, is the domestic one. Firms such as Ant Financial, Tencent, CreditEase and Noah, for example, are making real strides to expand with purpose into the international markets. They have the capital, the desire and the truly-global ambitions that make them extremely compelling. These types of opportunities are increasingly competing with the motivators to join a foreign firm, such as learning from global best practice. Working in a Chinese institution can appeal more to some local candidates, it seems. These individuals are more familiar with the corporate culture, plus feel they can contribute in a more meaningful way as a part of the core team rather than a satellite operation. In summary The talent shortage in China will increasingly impact foreign firms looking to take advantage of the easing ownership limits on foreign joint ventures across asset management, life insurance and securities. As asset managers either consider taking full ownership of their JV business or selling it, a lot of movement is expected from a recruitment perspective. Further, with QFII teams offering large incentives to retain their investment professionals, the talent market is becoming even more competitive. Local candidates are also able to be demanding, given the shortage. Further, if they tick all the boxes, they know they have choices that makes it even tougher for foreign firms to lure them. In conclusion, China is experiencing a “moment in time” within the asset management industry. It is an extremely exciting, complicated and difficult market to navigate from a human capital perspective, and 2018 will be no different. The race for talent in the short term is causing all the challenges one would expect, and the battle to keep true talent in the long term will not be an easy one. However, with almost eight years of operating onshore and with half our business based in China, we are very excited about what lies ahead and the prospect of success in the coming years in this industry. MARKET FOCUS – AUSTRALIA ​ It was interesting to see that Trump and Brexit had no direct effect really in Australia in 2017. What everyone has been watching, instead, is the increasing dominance of China on the world stage. There are several major themes in asset management in Australia: Superannuation funds continuing to increase their direct investment capabilities – both in listed and private markets Increasing regulatory pressure in the banking sector, and an ever-increasing demand for debt exposure, leading to a growth in private debt funds Ongoing conversations around retirement and retirement product offerings – given the significant trend from accumulation to retirement, most organisations are looking at how to capture an ever-growing market share Growing appetite for non-passive products, particularly among HNW investors, who seem to have the biggest appetite for risk Increasing demand for great marketers who are readily adapting to the chaning digital environment In wealth management, meanwhile, some key themes have been emerging in Australia: A Royal Commission announcement (read ‘independent investigation’) into the financial services industry – the terms of reference are broad, as are the institutions that may be reviewed, leading to a potentially nervous year for many players Continuing digital and fintech disruption – even the Australian Stock Exchange is moving to blockchain technology Increasing use of data analytics and big data to create highly-personalised and targeted marketing strategies Significant M&A activity in the sector – with Superannuation funds merging and the larger financial institutions divesting themselves of both wealth and insurance businesses * This view is provided by Susie Moore, Founder, East Partnership
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Profile Sales & Marketing Market Update, Singapore, Jan 2018

The following report provides an update on the key trends that we have observed within the Sales & Marketing job market in Singapore. It identifies emerging themes across various industries and details the major factors impacting hiring and talent movement. ECONOMIC LANDSCAPE The Singapore economy expanded by 3.1% in the last three months of 2017, which can be largely attributed to robust growth in the manufacturing sector. This was higher than economists' expectations of 2.6% but moderate in comparison to the 5.4% expansion seen in the preceding quarter. As mentioned, the key growth driver in the fourth quarter was the manufacturing sector, which has expanded 6.2% year on year. In particular, solid performance has been seen in the electronics and precision engineering clusters, which outweighed slower performances in the biomedical manufacturing and transport engineering sectors. Conversely, the construction sector continued to slide downwards in the last quarter of 2017, shrinking by 8.5% on a year-on-year basis and extending upon a 7.7% decline in the previous quarter. Thanks to an upswing in global growth, and solid manufacturing performance, the Singapore economy expanded by 3.5% in 2017 as a whole - more than double what was previously forcasted. MARKET TRENDS Some prominent and well-know B2C brands undertook restructuring activities in the final quarter of 2017. It is not all doom and gloom with some clients still hiring, but competition has become fiercer among candidates. The beauty sector remains strong with clients hiring and fulfilling roles at the mid and senior-level. Enhancing the customer experience through the implementation of in-store technology is still top of mind for many retailers. As a result, there will be more job openings in store design and UX design. Travel retail, and airport retail in particular, has been experiencing rapid growth in the last couple of years. Industry experts expect this positive trend to continue. Reputable brands are capitalising on this and, as such, are expanding their SEA travel retail arms in Singapore. This growing trend had only fueled more positions in store design and development. As data security becomes an increasingly critical commercial issue in today’s market, there has been a growing demand for solid cybersecurity professionals, especially from institutions in the public and private sectors. The infamous Equifax breach has become a sombre reminder to many C-level executives about the importance of the IT security function. Change management has been another hot topic, which is not surprising given the amount of restructuring activity which has taken place by companies in recent times. As such, sales, marketing and communication professionals with expertise in change management projects are being favoured by employers as they are perceived to be more adaptable and resilient. SALARIES & BONUSES Professionals can expect salary increments of between 3 to 4% this year, while top performers can expect a higher uplift. Bonuses of 1 to 2 months, on average, can be expected across most sectors. THE FUTURE The uplift in the Singapore economy will create more opportunities for sales & marketing professionals. In particular, there will be more SEO, SEM, digital and product related roles. In term of specific skill sets, employers will be searching for candidates with expertise in store design and development, cybersecurity, omnichannel marketing, marketing analytics and sales & product training. Mobile payment technology will continue to reengineer the retail landscape. CONTACT US For more information or individually tailored advice, please do not hesitate to contact our regional Sales & Marketing team: Singapore Office - please contact Karen Yap Hong Kong Office - please contact Brenda Choy Shanghai Office - please contact Johannes Tan Beijing Office - please contact Ming Ming​
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Profile News: Motivating Staff - Why Is Cash Still King in Hong Kong?

In the December ’17 edition of Human Resources, the official journal of the Hong Kong Institute of Human Resource Management, Profile's Richard Letcher shared insight from our recent Working in Asia survey about what motivates professionals at work. The article is extracted below. MOTIVATING STAFF - WHY IS CASH STILL KING IN HONG KONG? Data collected recently in an Asia-wide survey points to financial rewards being the main motivator among professionals in Hong Kong Why is this and how can the findings help HR professionals motivate, attract, and retain talent? The number one motivator at work among professionals in Hong Kong is “financial rewards”, according to a recent survey entitled Working in Asia – Key HR and Leadership Priorities for 2017 by Profile Search & Selection and Roffey Park. The survey polled 1,800 professionals across Hong Kong, Singapore and mainland China covering different sectors and functional areas, with a third of all respondents working in the HR sector. In terms of seniority, 85% of respondents had job titles ranging from manager to board director. The same question, “What motivates you at work?”, was asked in the 2016 edition of the survey, and the same result was found. Yet, in mainland China and Singapore, “financial rewards” was ranked third and fourth respectively in the 2017 survey as a motivator, with the far more altruistic, “opportunity to make a difference”, being number one in both countries. In Hong Kong, this was ranked fourth in priority, while “good leadership” and “achieving results” came in joint second place. “Insufficient financial awards” is also a key reason why professionals in Hong Kong would consider leaving their organisation. From a list of 15 different choices, professionals ranked it third, next to “a lack of career growth and development opportunities” (first) and “organisational politics” (second) as reasons to look for a role elsewhere. Many global studies have shown that money, an extrinsic motivator, does not buy engagement, and can actually suppress more intrinsic motivators, such as finding a job challenging and enjoyable or being engaged in a learning experience. So why is money so important in Hong Kong, compared to its neighbours in the region, when it comes to motivating staff? Hong Kong’s job market is a mature one and couldn’t be described as a particularly buoyant one in the current business environment, so what are the factors at play? Cost of living - a key culprit An obvious answer lies in Hong Kong’s high cost of living. From going to the supermarket to children’s education, and from dining out to exorbitant rents, Hong Kong is not a cheap place to live. Hong Kong has the world’s highest residential property prices based on square footage and they have been rising consistently for the last 18 months. A survey by ECA International in July this year – Has Hong Kong’s ability to attract multinationals and expatriates declined over the past 20 years? – points to Hong Kong being the most expensive location for rental accommodation in Asia-Pacific, using the cost of a three-bedroom apartment as a benchmark. Rental prices in Hong Kong are actually nearly 30% higher than they were 20 years ago whereas prices in Shanghai, Beijing and Singapore have actually decreased over the same period, most probably due to an increase in accommodation supply in those locations. In another ECA International survey – Hong Kong is the Asia Pacific region’s most expensive location for expatriates, carried out in June 2017, Hong Kong was found to be the second most expensive location for expatriates in the world, next to Luanda, in Angola. In Asia-Pacific, Hong Kong took the top spot, and the survey doesn’t take into account accommodation and children’s education costs. With these increasing costs of living in Hong Kong it might not be a surprise that financial rewards are important as a motivator. Salary increases have not kept up either, according to figures from the Hong Kong Institute of Human Resources Management – the average annual salary increase earlier this year was 3.3%, and 3.5% in 2016. This is compared to increases of between 4.2% and 4.5% in each of the years from 2011 to 2015. Financial services predominance The second reason could be the predominance of financial services organisations in Hong Kong, where financial rewards can be a main driver for staff. In a recent global survey by Efinancialcareers.com, a website which advertises jobs in the financial services sector, the number one driver for finance professionals thinking about their next employer, was “a competitive salary”, from the US to Europe to Asia. Many commercial multinationals, for example in the pharmaceutical, e-commerce and technology sectors, have relocated their Asia-Pacific regional headquarters to Singapore over the last two decades, leaving a relatively high proportion of professionals in Hong Kong working in banks and other financial institutions. Of those surveyed as part of the Working in Asia – Key HR and Leadership Priorities for 2017 survey, 49% of respondents in Hong Kong worked in financial services, 29% in Singapore, and 8% in mainland China. Cultural and historical legacy Thirdly, historical influences and cultural legacies might be at play. Many Hongkongers originally came to the city to escape the civil war in mainland China in the 1940’s and the Cultural Revolution in the 1960’s and 70’s, where a considerable number of people lost most of their hard-earned property and assets. Money therefore has an understandably important part to play in Hong Kong’s psyche in terms of the security that it can give. This, coupled with the influence of min zi (面子) (which translates as the need to gain prestige, of which financial rewards are a major source, in order to elevate one’s status in society), means it shouldn’t be a surprise that financial rewards are important. As the Cantonese proverb goes, “no money, no talk”. Solutions for HR The importance of money as the main motivator in Hong Kong cannot be ignored by HR functions. Many organisations, globally, have used creative means when it comes to the structure of rewards packages, to attract and retain staff. Long-term incentive plans, deferred bonuses, stock options, and attractive pension plans are all widely used and appeal to employee’s extrinsic motivators, but these are longer-term strategies and don’t really tackle the daily cost of living issues faced in Hong Kong. There is also the issue of expatriates being put off coming to Hong Kong when they baulk at rental prices and school fees. If these are not offered by an organisation, competitive base salaries are really what potential employees are looking for to cover them. The big fear with money being a main motivator though is that staff will focus less on learning, having fun at work and enjoying what they do and, ultimately, individual and organisational performance will suffer. Perhaps HR departments and leaders need to focus more on enhancing intrinsic goals for their employees. E-commerce and technology companies have been particularly good at ensuring that their staff enjoy what they do, as well as developing, learning, and feeling challenged, with everyone working towards a common purpose. HR functions can also focus and develop their employer brand in order to attract and retain staff. In the Working in Asia 2017 survey respondents were asked, “What are the things you look for in an organisation?” The top five in Hong Kong were (in order), good leadership (the most popular), a culture that embraces professional development and learning, financial stability, flexible work policies, and a culture that is non-political. These could be a starting point in moving people away from thinking of money as a motivator. As the Working in Asia – Key HR and Leadership Priorities for 2017 survey collects data in future years it will be interesting to observe how “financial rewards” ranks as a motivator in Hong Kong. Millennials, who are becoming a bigger cohort of the working population, have a different mindset and the need to make a difference, to have autonomy, and to work in a collaborative environment seem to be more important than financial rewards for this generation. This article originally appeared in the December ’17 edition of Human Resources, the official journal of the Hong Kong Institute of Human Resource Management, and is reproduced with permission from HKIHRM and Classified Post. To view the full article, please click here.
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Profile Asset Management Market Update, Q4 2017

Q4 TAKE-AWAYS AND TALKING POINTS As 2017 draws to a close, the increasingly-positive story for asset management in Asia has brought with it a wave of personnel moves and ongoing searches in the region. We at Profile are busier at this point in the calendar than at any other quarter four since before 2010. This reflects the growth in the industry in terms of market performance, AUM and investor returns – in turn fuelling the appetite of fund houses across the board to commit more resources to Asia. Many business leaders believe this momentum will continue for the foreseeable future, encouraged by supportive financial markets and the potential for growth in 2018 and beyond. The upshot of these broad trends is that the spotlight on the need to maximise human capital is shining more brightly right now than it has for several years. This is true for all functions, and for local and global asset managers alike. Although Hong Kong and Singapore continue to be key regional hubs, China is capturing the lion’s share of attention among industry players. They are watching closely, readying for expansion in the Mainland to make the most of what many executives believe is a ‘moment in time’ for the sector, spurred also by the moves by PRC regulators to allow foreign firms wider access to onshore asset gathering. ALL EYES ON CHINA We see the evidence of this first-hand. Since establishing our WFOE in 2010, more than half of our 85-plus staff are now based in our Shanghai and Beijing offices. Given this unique perspective, we have little doubt that China will play an ever-bigger role for everyone in the asset management community. It is clear to see why this is the case. The progressive and tangible regulatory reforms this year have further driven predictions of far-reaching growth. So, it is no longer ‘if’ but ‘when’ for those fund houses looking to set up and run sustainable businesses onshore. The flurry of activity has come from several channels. One of these is the desire to secure a Private Securities Investment Fund Manager (PFM) license. Following in the wake of the first four foreign firms to do so, several others have joined the list more recently. And our understanding is that many more international asset managers are now awaiting PFM approval. Yet as these and others ink their China blueprints, one of the first hurdles they need to overcome is finding suitable talent. This is easier said than done. From senior management and business development executives, to fund managers and analysts, to compliance officers and infrastructure personnel, individuals with the right skill-set, experience and bi-lingual capabilities are in short supply – certainly relative to the demand. It is also no surprise that many foreign players are grappling with this. Competition for talent today is coming from three distinct sources: global firms looking for the same types of people to facilitate their domestic strategy; Chinese asset managers looking to expand and bolster already-strong positions; and the rapid rise of Chinese fintechs as they focus on the asset and wealth management space. Further, with zero slowdown expected for the industry in 2018, a busy 12 months ahead will also translate to many more positions needing to be filled. PLUGGING THE TALENT GAP ​​ Critical to a successful hiring strategy in China is a combination of a deep market understanding, persistence and patience. This has become clear to us from our experience in completing over 750 placements in China over the years – across the range of industries we service, including asset management. Employers should be looking at China through a different lens, appreciating – and accepting – that it is a complicated market, with the nuances more and more apparent the deeper firms delve. Yet at the same time, our advice at Profile is to maintain hiring rigour, by sticking to a clear methodology and process. Getting caught up in the excitement can lead to costly mistakes. In particular, as China’s asset management floodgates open ever-further, there is little point taking on board anyone – at any level – who lacks the depth of understanding of the local market plus the language skills. Native Mainlanders who want to return home offers one potential solution, as long as these individuals want to go back for the long term, are senior enough to take on more responsibility and have the required experience. For those fund houses with good people already in place in China – or with China specialists among their headcount in Hong Kong – awareness that talent retention is as important as talent acquisition is essential. This is especially true based on the high levels of activity at the moment. BROAD OPTIMISM FOR 2018 AND BEYOND ​​ Beyond China, several influential trends are shaping Asia’s asset management sector for 2018: Market consolidationAs established asset managers merge and the landscape shifts, the pipeline of moves is swelling. Investment Fixed income and multi-asset expertise are highly sought after; the equity space is seeing less movement at the moment. Asset gathering With fund houses seeking a content-rich salesforce, individuals with real technical knowledge are attractive. The wholesale focus also remains strong, notably in private wealth. * We will send you our in-depth insights into these and other trends in Asian asset management in January, as part of our annual industry update. In the meantime, we would like to take this opportunity to wish you all the best for the festive season and 2018. CONTACT US For more information or individually tailored advice, please do not hesitate to contact our regional Asset Management team: Hong Kong Office - please contact Andrew Oliver Singapore Office - please contact Stanley Teo Shanghai Office - please contact Yao Xiong Beijing Office - please contact Nancy Gao
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