Japan’s Pension Fund Association has increased its investments in hedge funds six-fold over the past 12 months (Bloomberg). With US$2.8bn of its assets now in hedge funds, and with plans afoot to increase that to about US$5bn, has the new pension money given hedge fund hiring a boost?
“We certainly think it’s had an impact locally and driven an increase in hiring,” says Nick Kaneko at consultancy Hedge Fund Japan. Anything related to algorithmic trading has been a growth area, he adds. And firms are always trying to hire native Japanese speaking analysts to cover equity markets.
Kojiro Nojiri, managing director at executive search firm Tiglon Partners, however, says while strong performers like Citadel and Oasis are taking on fund managers and analysts, he believes this has no relation to the pension money. Nojiri adds that hiring levels in general are not aggressive because of the unpopularity of Japanese equities.
If new jobs do result from the pensions injection, they will probably be in larger hedge funds with strong track records. The Pension Fund Association sees the bigger players as less risky, according to Jason Hurst, a specialist in hedge funds at International Solutions Group Japan, a financial planning company.
But Hurst says there is no guarantee these jobs would be created in Japan. Although the government is more likely to use Japanese funds, there is the possibility of management being outsourced to overseas firms, effectively removing any potential employment benefits.