Prudential Asset Management has become the latest life insurance-affiliated asset management firm to succumb to cost pressures by trimming staff in Asia. Sources report 9 out of 38 staff in Hong Kong and 20 out of 259 staff in Singapore were fired on March 20.
Most of the staff made redundant in Hong Kong held senior-level positions. An entire macro strategies team has been decimated, sources say, although according to Prudential this function was disbanded a year ago. In Singapore, where Prudential has its largest presence in the region, cuts across all divisions have been reported. The affected areas include dealing, equities, fixed income and operations.
"Market conditions dictate that we need to manage costs tightly in the short term and do what is right for the business over the long term," says a Prudential spokeswoman in a written statement. "We have been reviewing all areas of our business and prioritising initiatives to reflect the market environment. This unfortunately has resulted in the need to make some headcount reductions."
As one of the biggest equities managers in Asia, Prudential has been hit by poor valuations and the retrenchment in assets sourced from Western investors for Asian investments.
The firm reported AUM sourced from Asia-Pacific clients of $57.8 billion as of September 2008. The firm's latest official global AUM figure dates to end December 2008, at GBP36.8 ($53.5 billion).
Affected executives at Prudential say that, compared to other industry professionals made redundant by Schroders and Blackrock last year, they consider themselves fortunate.
They say, despite tough market conditions, Prudential delayed the redundancies until well after the latest bonuses were paid. Most claim the firm has been generous in its terms and that they hold no ill-will against the company.
The executives spoke to AsianInvestor under terms of anonymity, citing confidentiality agreements that they signed with Prudential as part of their redundancy packages. In the grim market environment, they say they want to maintain a low profile, forecasting a poor outlook for their own employment prospects over the next six to 12 months.
News of the layoffs at Prudential came after two new senior hires at the company, however. Last week, Mark Toh was named regional head of partner relationships for Prudential and non-executive chairman of Prudential Fund Management Berhad (PFMB). Thomas Cheong was named CEO of PFMB, taking over the role previously held by Toh for the past nine years.