Base salaries at hedge funds in Hong Kong have stagnated as recruitment in the sector suffers a year-on-year decline, say recruiters. But front-office employees at hedge funds are still well remunerated at all levels of seniority, according to the Hong Kong hedge fund pay table below.
One buy-side recruiter, who asked not to be named, says he is handling about 15% to 20% fewer vacancies than 12 months ago, and that there is no upward pressure on hedge fund salaries in Hong Kong as a result. Trader turned-headhunter Matt Hoyle, adds that hedge fund hiring is “slightly down” on last year in Hong Kong.
Hoyle partly blamed the decline in hiring on there being “fewer new small startups” wanting to build a core workforce. Net redemptions across the Hong Kong hedge fund industry came to about US$1bn in the third quarter of 2019, the highest level since Q2 2009, in the wake of the financial crisis, according to data from Eurekahedge. These outflows were driven by small and medium-sized hedge funds managing US$500m or less.
Meanwhile, as the city’s political crisis deepened in November 2019, government officials from Tokyo visited Hong Kong in a bid to persuade hedge funds to relocate to the Japanese capital. Singapore has also been touted as an alternative location for Asian fund managers spooked by Hong Kong’s current civil unrest.
So far, however, Hong Kong’s hedge fund industry is yet to suffer significant staff departures. Recruiters say the job market – while down on last year – isn’t yet in dire straits and this means hedge fund pay is stagnating rather that declining. “Some funds in Hong Kong are open to employees requesting relocations to Singapore – if it works from a business perspective and they have an office there,” says Will Tan, managing partner at headhunters Principle Partners. “But I haven’t seen people actually leave. If you’re working in equities rather than macro at a hedge fund in Asia, Hong Kong is the place to be, and that acts as a huge deterrent to moving to Singapore,” he adds.
Moreover, despite the withdrawals noted by Eurekahedge, total hedge fund assets in Hong Kong increased US$6.9bn in the first nine months to reach a record high of $92.1bn, mostly driven by fund performance rather than inflows. “The political crisis in Hong Kong is yet to pose any meaningful threat,” Eurekahedge analyst Mohammad Hassan told Bloomberg. “The opportunity and access that managers based in Hong Kong provide to Chinese onshore markets and to the broader region as a whole is unlikely to be eclipsed in the near term unless things really spiral out of control.”
There’s also a more mundane reason why Hong Kong hedge fund salaries have flatlined year-on-year and hiring has declined: many large funds have already reached their desired headcounts, says Hoyle. “The large funds in Hong Kong are always on the lookout for talent and can still write big cheques if needed, but this year they’re definitely in less of a hurry to hire,” says Tan. “They know who they like and will stay in touch with them until the time is right,” he adds. The top-five Hong Kong hedge funds by 2018 assets under management are Eastspring Investments, Och-Ziff Capital Management, Man Investments, Capula Investment Management, and GAM Fund Management.
If you’re looking to move to a new front-office role, you’ll need to know what the average Hong Kong hedge funds salary ranges are in your job function at your seniority level. Hong Kong hedge fund salaries may not be increasing – but you’ll still want to avoid being underpaid.
We averaged out data provided by buy-side specialists Principle Partners and Matthew Hoyle Financial Markets to produce the table below, which outlines Hong Kong hedge fund base pay for portfolio managers, investment analysts, execution traders, and investor relations professionals from associate (approximately four years’ experience) to senior director level (typically people with a least 15 years’ experience).
Portfolio managers are ultimately responsible for making a fund’s final investment decisions, and unsurprisingly their salaries can exceed those of their colleagues in other job functions. Even excluding lucrative carried interest (a share of an investment’s profits, which often exceeds a PM’s base pay), portfolio manager salaries at Hong Kong hedge funds can reach HK$4.6m for senior directors.
You usually can’t become a portfolio manager in your mid-20s – it’s a job you must work your way into over the course of your career. “There are funds – in particular large macro funds like Caxton Associates, Tudor and Moore Capital Management – that will promote smart execution people, first into ‘junior’ PM roles, and later into fully-fledged PM roles,” says trader-turned headhunter Hoyle. Execution trading is a well-paid job in itself – you can earn up to HK$3.2m as a salary at a hedge fund in Hong Kong.
Investment analysts are similarly well remunerated at Hong Kong hedge funds. Even associates and AVPs in the function are on salaries of about HK$970k to HK$1.4m.
Photo by Chan Young Lee on Unsplash
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