Deutsche Bank’s global job cuts may not have hit Asia quite as hard as Europe or the US, but there’s one unit that’s suffering just as much: equities. The bank’s Asian equities business is being shuttered alongside those elsewhere in the world.
Moreover, the equities job market in Hong Kong is arguably worse than those in Western financial centres, because several other firms have been scaling back. Just last week BNP Paribas cut most of its Asia equity research team, while Morgan Stanley and Nomura trimmed their Asian equities operations in the second quarter.
If you’ve been laid off from Deutsche’s Asian equities team, it will be exceedingly tough to get a similar job at another large bank. But you need not stay unemployed for too long. Here are some alternative career options – if you’re prepared to take a pay cut.
Chinese banks have been staffing up their sales and trading teams as Western firms have cut back over the past few years. Kenneth Taheny, Societe Generale’s former head of Asia Pacific cash equity sales trading, joined ICBC International in Hong Kong last year, for example. Chinese banks now have the opportunity to snap up Deutsche traders at a reasonable cost, says a recruiter in Hong Kong.
“I know ex-sales and trading people in Asia who’ve left bulge bracket firms in the last 12 months and are in the process of setting up their own funds, utilising their personal and professional networks to source investors,” says Yvette Kwan, a former APAC investment banking COO at UBS, now a partner at Hong Kong finance consultancy Quinlan & Associates. “But this option is generally only open to very senior traders with deep pockets and industry ties.”
Traders who can also program might be considered for automated or quant trading roles. “The need for traders with skills in signal development, and programming languages like C++ or MATLAB has not gone away,” says Ed Goh, a team lead in sales and trading at recruiters Selby Jennings in Singapore. “These technical roles require serious quantitative skills, but boutique shops often offer negotiable profit-share schemes, so there’s a high potential upside.”
Electronic execution desks
“Cash equity sales traders who have covered fund managers and are experienced in handing direct-market-access or algorithmic trades could apply to banks whose electronic execution desks also value high-touch client servicing,” says Goh. “Compensation on these desks doesn’t vary too much from the traditional sales and trading teams.”
“Sales and trading experience is well received in fintech because startups operate in a fast-moving, high-pressure, and performance-driven environment,” says Sonia Palmieri, a former structured products specialist at Credit Suisse, now head of business development at Singapore-based research website Smartkarma. “Their international networks and knowledge of financial markets can’t be replicated by their technology-focused colleagues,” she adds.
If you want to stay in banking and don’t mind a dramatic career change then risk is a viable option, albeit one that comes with a pay cut. “Risk, particularly market risk, is a common path for traders now, as is market surveillance,” says ex-Jefferies trader Warwick Pearmund, now an associate director at Pure Search in Hong Kong. “Risk teams value people who know how trading works and can understand trading logs and charts to dig out discrepancies or potential failures. This skill is harder to teach someone who hasn’t experienced trading first hand.”
Online research firms
“With the unbundling of investment research, I see opportunities at online research marketplaces,” says Kwan from Quinlan & Associates. “Working for an ORM offers an interesting option in a newly developing space and leverages your existing relationships with the buy-side.”
“Products sales in wealth management is an area where ex-sales and trading staff in Asia could find a new home. They bring a deeper level of product knowledge to the table as wealth management in the region continues to expand and become more sophisticated,” says Kwan. Deutsche is itself building in Asian wealth management, although many of its new jobs are for relationship managers.
Top-tier global banks
Success in Asian equities requires scale and few banks have been able to sustain it. “Asian equities operations are considered satellite businesses and the revenue generated here is also much lower,” says Hong Kong trader-turn headhunter Matt Hoyle. But there are exceptions. UBS (1st), Morgan Stanley (2nd), and Goldman Sachs and JP Morgan (3rd equal) were the top-tier players in the sector in 2018, according to research firm Coalition. Getting a job in their equities teams will not be straightforward – only top-performing Deutsche staff should apply.
And there’s always…headhunting
“Former traders sometimes make good recruitment people, but this is very much on a case-by-case basis,” says Hoyle.
Image credit: Nadore
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