The hedge fund sector may be a relatively small player within Singaporean financial services, but it still has its unique set of employment challenges. [efc_twitter text="While earlier this decade hedge funds in Singapore were adding traders, now they need more research analysts"].
“With the decline of prop-trading desks, there isn’t the same flow of traders moving from the banks in Asia as there was three years ago,” says Jeremy Lawson, a financial services partner at CTPartners.
“Funds that previously utilised Singapore purely as a trading hub are now growing their infrastructure and support services,” says Nick Wells, a director at search firm Webber Chase in Singapore. “Asian market volatility means strategies require higher levels of analytics and back testing. Over the past year we’ve placed at lot of COOs, compliance officers, quantitative researchers, analysts and technologists.”
In 2014, Asia ex-Japan investing hedge funds outperformed their global peers and funds run by Singapore-based Quantedge Capital and Dymon Asia Capital were among the 10 best performing in the world. “Many funds in Singapore are implementing growth plans early in 2015 – the recruitment market is buoyant,” says Jamie Thorpe, head of fund management for Asia Pacific at search firm Selby Jennings.
But with trading headcounts largely in place, the focus on recruiting analysts is set to continue throughout this year. “The most common hires will still be for analytical coverage rather than for people leading funds, which we believe is due to the lack of growth in AUM in Singapore for many firms,” says Thorpe.
There is no shortage of sell-side analysts in Singapore who want to make a career change into a hedge fund because of the “perceived lifestyle and progression opportunities”, says Wells from Webber Chase. Thorpe adds: “Senior analysts are given high levels of exposure in Singapore compared with their US and European counterparts – they frequently have almost full discretion over investments made within their market coverage.”
Most moves into hedge funds are made by people with skills that are easily transferable. “For example an equity researcher at a bank covering Asian tech stocks might move into a tech-focused hedge fund,” says Thorpe from Selby Jennings. “For junior analyst jobs, we do see some transition of candidates from middle and back-office roles who have exceptional educational backgrounds and a raw passion for the industry, but as competition for jobs is so fierce, it’s not a standard switch,” he adds.
Thorpe says funds generally find it easier to source analysts with knowledge of specific Asian markets – for example China analysts are now increasingly in demand as more firms cover the mainland from Singapore. “Due to wide-ranging cultural, economic and socio-political diversity, investing broadly across Asia can be extremely challenging. This can limit headcount growth for funds with a broad investment strategy.”
Relocations of analysts from Western markets remain rare. The Asian hedge fund sector accounts for only about 4% of global capital in the industry – unlike the banking sector, its recruitment needs are typically too small to warrant international talent searches.