Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
And this is a good thing for AsiaÆs asset management industry, where the chief complaint has always been the shallow talent pool.
An exodus of fund managers, analysts, and other asset management professionals from Asia û as part of a broader exit from the banking and financial services sector looking for greener pastures in the US and Europe since the mid-1990s û has led to a brain-drain of sorts in this part of the world. The 1997 Asian financial crisis and Sars added to the diminishing human resources.
With the subprime crisis and the broader economic slowdown in the US, the tables started to turn late last year. More and more people in the US and Europe have been looking to Asia for finance and asset management jobs.
Now, headhunters are getting emails and faxes from Lehman staff from this region, the US and Europe, covering all skill levels from analysts to very senior executives.
ôSenior professionals will be the easiest to place,ö says Philip Eisenbeiss, a partner for banking and finance at Executive Access.
Although many in the asset management industry have been quietly looking for new blood, it is unlikely that they will rush to scoop up those no longer with or leaving Lehman. Matching supply and demand remains the key challenge, one headhunter says.
ôCompanies are being very cautious and only the ones with immediate needs will be hiring,ö the headhunter says, noting that weak capital markets worldwide are causing fund houses to reassess their own internal targets in terms of assets under management and performance.
Investment banking specialists wonÆt be an easy fit in the asset management industry unless they have buy-side, risk management or operational experience. And with the requirement for Mandarin speakers still high on the wish lists of fund houses, many who are sending their CVs from the US and Europe may not even stand a chance.
Despite the weakness of ChinaÆs equities market (it is among the worst performers so far this year), China is still the strongest long-term investment theme in Asia. Much of the future expansion of fund houses in Asia is still related to China.
The qualified domestic institutional investors (QDII) programme, a system by which qualified mainland Chinese investors are allowed to invest overseas, is among the reasons demand for Mandarin speakers has increased sharply. Many, if not most, of the retail QDII products launched so far have a significant component that invests in the Hong Kong equities market or stocks of Chinese companies listed in the territory. Other markets in Asia are also becoming the recipients of this investment money.
Job seekers from the Lehman talent pool will also have to compete with US- and Europe-based Chinese who are returning to Asia.
ôWe are seeing not only ethnic Asians seeking to return to Asia from Europe and the US, but also professionals without any personal link to Asia,ö says Executive AccessÆ Eisenbeiss. ôAsian markets still offer more opportunities than elsewhere for selected, experienced professionals.ö
In a previous interview with AsianInvestor, Niall MacDonald, managing director at Whitney Group in Hong Kong, said his firm sees a minimum half-a-dozen to a dozen Chinese-national CVs every single week from his firmÆs US and European offices û people who are in their 30s and want to come back to Asia.
Also in a previous interview, Michelle Ho, a director at Recruitment Intelligence in Hong Kong, said there is often a mismatch because of a job seekerÆs lack of relevant language skills or the proper background with regard to the Asian market.
As another headhunter puts it, many investment banking professionals losing their jobs in the US because of the credit crisis and economic slowdown want to move to Asia, but have no business being in this region.
One thing the additional talent pool from Lehman will do is drive compensation packages in Asia even lower, especially for mid-market professionals. Even when there was strong competition for talent in the fund management industry, employers already put a cap on what they were willing to pay. Fund houses are paying greater attention to costs now.
Salaries tend to be higher in Hong Kong, largely because the cost of living is high compared with Singapore or China. In Korea, Taiwan and most especially Southeast Asia û where there tends to be enough local supply of candidates to meet the needs of local fund management companies û increases in compensation have been more modest. Total compensation typically includes a base salary, housing allowance and educational benefits for children. In some cases, although increasingly becoming rare, they include club memberships and other perks.
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