The traditional asset management industry in Hong Kong and Singapore is beginning to cannibalize itself as many talented portfolio managers leave to start up hedge funds. The latest victims are Baring Asset Management and Invesco.
Barings has suffered a wave of resignations, losing four fund managers this year, three of whom left to start their own hedge funds. James Squire left before summer to join investor Andrew Ballingal start a new hedge fund (which has just begun trading).
Then last month Sam Lau and Billy Chen quit to start their own hedge fund company in Hong Kong, Acru Asset Management. In addition, Ernie Tam departed to join Deutsche Asset Management in Singapore. The four resignations brought Baring's regional investment team down to eight people.
The firm is trying to right itself by hiring two fund managers from Invesco, Henry Chan and Wilfred Sit. Market sources believe it is a sign of the market's tightness that Barings will put them in positions more senior than they would have been able to achieve under normal conditions. But the lure of hedge funds, with their promises of freedom and greater rewards, has left traditional players with fewer hiring options. The problem of fickle staff is especially acute in Asia, which lacks the depth of expertise that traditional fund houses can draw on in Western markets.
Khiem Do, head of equities at Barings in Hong Kong, says the new hires will begin in two weeks and will report to him. "We'll have 10 investment professionals altogether," he says. Henry Chan, the more experienced of the two, will serve as a Taiwan and Korea expert, a role intermittently held by Squire.
This leaves Invesco in a pickle, as it comes on top of other personnel changes, although its spokesperson says the firm has hired a 15-year industry veteran in Hong Kong to staunch the loss. She was unable to name the new hire.
Invesco's problems began when its CIO, Alfred Ho, left at the start of the year to begin a new hedge fund.
Invesco's situation is compounded by the rumoured departure of its new CIO, Tan See-Wee, an ex-Merrill Lynch Investment Manager portfolio manager brought in from Singapore in the spring to replace Alfred Ho. Market sources say the arrangement has not worked out. Invesco says there is no news regarding Tan, although it confirms Henry Chan and Wilfred Sit have resigned. Tan See-Wee didn't return calls.
China specialist Paul Chan is left holding the reins at Invesco, as well as assisting its Chinese joint venture company, Invesco Great Wall in Shenzhen. Chan has reportedly been looking at other options. The Invesco spokeswoman says the firm has been in discussions with Chan "to see if something can be worked out". Industry sources believe Invesco wants to keep the well-regarded Chan on board.
Separately on the marketing side, Invesco has hired Elvina Lee from Watson Wyatt in Singapore. Lee will transfer to Hong Kong and support Kerry Ching, head of institutional business development.