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.
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.
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