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The mysterious case of China’s disappearing fund managers

We’ve all heard about the dearth of banking talent in China. Perhaps not as well documented is the arduous search for top talent at Chinese fund houses.

A recent Ignites Asia article reported that at least nine mainland fund companies have lost general managers this year and are still in the process of filling these vacancies. These firms include: Guotai Junan Allianz Fund Management, Zhong Hai Fund Management, Franklin Templeton Sealand Fund Management, SWS MU Fund Management, Galaxy Asset Management, Great Wall Fund Management, Bosera Fund Management, China Merchants Fund Management and Minsheng Royal Fund Management.

Having positions stay vacant for months on end isn’t all that unusual it seems.The average length of time it takes to fill a high-ranking position in a fund house is typically six months to a year- including regulator approval, says Jason Tan, director of financial services and banking, PSD Group, Shanghai. The longest he’s seen? A whopping two years.

Recruiters explain why nabbing the right person for the job is just so tough:

Huge lack of talent

Probably the biggest obstacle facing recruiters is the huge deficiency of talent. Janet Lee, managing director, Burke Associates, points out: “Banking in China has been around for a lot longer so firms have managed to groom some talent. Fund houses on the other hand, have sprung up less than 10 years ago so the pool of experienced talent just isn’t there yet.”

Insufficient Mandarin

Tan adds that most firms seek out only experienced local and returnee candidates. He points out: “Funds which are already a niche market are further restricted by the language and networking barrier.” Tan says foreign fund houses have traditionally tried to hire from their mainland rivals, however as more entrepreneurial Chinese set up their own funds, this talent crunch is being further exacerbated.

Too close for comfort

The cosy relationship between fund houses and the government agencies which oversee them could also be a disincentive for some candidates. Tan says most fund houses in China are linked to government agencies, leading to assumptions that the agencies would have “some say” over investment strategies.

And now for the good news…

That said, there is an upside to joining the industry. Broadly speaking, recruiters say senior people are well compensated.

Lee observes: “Most JV firms are willing to pay the right price for the right candidate and in China remuneration has gone way up. Salaries in Shanghai and Beijing in particular are very close to Hong Kong, so it’s not that story any more where mainland candidates are paid much lower.”

Plus, as Tan points out, candidates get to be involved in the deregulation of China’s financial industry.

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