Singapore Hedge Fund

Alternative asset management in Singapore

Finance Jobs in Asia going back to boom time?

HONG KONG — Marco Wong lost his job with Citigroup in Singapore in mid-January. During all the turmoil that engulfed the financial world last year, the cutbacks at the U.S. banking giant were neither unique nor surprising.

Still, Mr. Wong says, Citigroup’s decision not to renew his contract shortly before it was due to end “came as quite a shock.”

But 20 job applications, four interviews and three and a half months later, Mr. Wong was again gainfully employed — as a financial consultant at IPP Financial Advisors in Hong Kong.

Asia has already emerged more forcefully from recession than the United States and Europe, economic reports over the past month have shown. Now, that upturn here is starting — at least tentatively and in certain sectors — to feed into the job market. Hiring is starting to pick up again, recruiters and bankers say.

Broad unemployment is still rising, a normal pattern even after economies begin to emerge from recession. But economists say that any early signs of job growth are a prerequisite for a more solid-based recovery — one in which more confident consumers, and not just huge government stimulus packages, can play a role in lifting the economy.

Perhaps the most striking element in the new hiring: Almost a year after Lehman Brothers folded — roiling financial markets, spurring a remake of the banking landscape and feeding one of the worst recessions in modern history — it is the financial sector that is leading the way.

“The death of the industry has been greatly exaggerated,” said Matthew Hoyle, founder of Matthew Hoyle Financial Markets, a specialist headhunter for the banking and hedge fund industries, based in Hong Kong. “I am actually quite excited about the prospects for the rest of the year.”

“Things have picked up here — unlike in Europe and the U.S., where that’s absolutely not the case,” he added.

To be sure, the recovery in Asia is tenuous, and highly dependent on a recovery in the West, a major market for the region’s export-driven economies. But for now, the picture is brightening.

Jerry Gunnell, a corporate cash management specialist in Singapore, fell victim to Bank of America’s headcount reductions in February. He is now back in the saddle at Standard Chartered, a British bank that does much of its business in Asia, in a somewhat different but equally senior position he took up in mid-June, also in Singapore.

In the past month, several banks have announced plans for some serious hiring in Asia.

Standard Chartered intends to hire about 850 relationship managers for its consumer banking business over the next 18 months, to gain a larger market share of affluent customers in Asia.

HSBC — which, like Standard Chartered, is very active in Asia — is recruiting more than 100 staff members in Hong Kong. In mainland China, it plans to add 1,000 employees this year, and a similar number next year.

Bank of New York Mellon recently announced it would increase its 150-strong Hong Kong staff by another 50 as part of its expansion in Asia.

And ANZ of Australia, which recently bought some Asian operations from Royal Bank of Scotland, the battered British lender, is hiring 100 senior private bankers in the region over the next 18 months.

Several others, including Citigroup, Nomura, Barclays Capital, Credit Suisse and BNP Paribas, have announced new hires and appointments in recent weeks.

Tales like these highlight the newfound dynamism that is starting to creep back into the Asian job market. While unemployment continues to rise in much of Europe and is expected to top 10 percent in the United States before any improvement materializes, rates in Asia have remained relatively low: 5.4 percent in Hong Kong and 3.3. percent in Singapore.

One relatively weak spot is Japan. The jobless rate hit a seasonally adjusted 5.7 percent in July, the highest level since the end of World War II and up from 5.4 percent in June.

But elsewhere, recruitment firms are busy again.

“Last October, after Lehman Brothers collapsed, the lights went out here; it was really quite frightening,” said Nigel Heap, managing director for the recruitment firm Hays in Sydney. “But we’re now cautiously optimistic that the worst is over in places like Hong Kong and Singapore.”

Andrea Williams, managing director of Ambition, a headhunting firm in Hong Kong, said that things started to turn noticeably from April onward.

“During the second quarter of this year, we got in 20 percent more jobs than during the first three months of the year,” Ms. Williams said. “Yes, we’re still below where we were a year earlier, but it’s definitely encouraging.”

A survey in August by Robert Walters, a recruiting firm based in Singapore, showed that job ads in the Hong Kong, Singapore, Chinese and Japanese media nudged up 6.4 percent in the April-to-June quarter from the previous three months.

Of course, for the legions of those who lost their jobs and still remain unemployed, or who are still being laid off as some companies continue to struggle, it is too early to celebrate.

“It’s not an across-the-board improvement — it’s pretty patchy in terms of sectors, and in terms of geographies — but things are at least holding steady or even getting better in some parts,” said Darryl Green, who heads Asia Pacific and Middle East operations for Manpower, a temporary employment and recruiting company.

“On a scale of 1 to 10, I’d say we were negative during the first half of the year,” he said. “Now, we’re at 0.5 or 1 — not huge, but better, and definitely stronger than in the Americas and Europe.”

Nearly all of the jobs that are coming back are “replacements” of previously cut positions, not new jobs, market experts here say. And employers are still being very cautious and choosy when it comes to hiring.

But increasingly, the champagne is coming back out, as Asia’s economies and stock markets are recovering — faster than expected, and faster than Europe and America.

Demand in the financial sector is strongest for back-office positions like compliance and accounting, as well as client relationship and asset management — a business in which many banks want to expand to tap the growing number of increasingly wealthy Asian savers.

Hedge funds, too, are again looking to increase staff, said Mr. Hoyle in Hong Kong. “A lot of the big U.S. hedge funds retrenched — they are regretting it now.”

Outside the financial sector, there is anecdotal evidence of hiring in other areas, though it is patchy.

Demand for sales jobs, for example, has picked up across all sectors as companies focus their still scarce resources on jobs they hope will help generate immediate revenues.

“Asia is seen as a growth market,” said Mark Ellwood of the Robert Walters recruitment agency, in Singapore. “Companies are not going out all guns blazing again, but there is once again an appetite to hire in certain areas.”

In Hong Kong, Eike Croucher, a communications manager, was laid off from Swiss Re after the reinsurance company announced in April that it would shed 10 percent of its 11,500-strong global work force. Mrs. Croucher had a job offer from the German chemicals giant BASF on the evening of her last day at Swiss Re, thanks to some fast networking.

“I was very, very lucky, of course, that things happened so quickly,” she said.

In another example, one senior marketing executive who lost her Singapore-based job with a large U.S. software company, had been in the region for four years. The woman, who spoke on condition of anonymity because she was not authorized to talk to the media, found a job at another U.S. company in the same sector. It took 7 weeks of research, 45 applications and a dozen job interviews.

It is still very much an employers’ market. Generous “expat packages” — in which overseas employees have much of their housing and their kids’ schooling paid for — are for many a thing of the past.

The most successful candidates have experience in Asia, a network of contacts and language skills. It is difficult for someone to just pack up and move over from New York or London, where the market remains much gloomier.

“Employers are still being extra, extra selective in their talent search,” said Mark Carriban, the Asia managing director based in Hong Kong for Hudson, a recruiting agency. “And what is very prized out here is local market knowledge.”

In fact, many recruiters are already starting to warn that a “talent crunch” could be only months away, with companies again struggling to find people with the right combination of international qualifications, contacts and languages — of which there is a limited supply.

One piece of advice for job seekers, though easier said than done: “Learn Mandarin,” Mr. Carriban said.

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Ex-Lehman, GIC Managers Fuel Asia Hedge-Fund Industry Renewal

June 12 (Bloomberg) — Former Lehman Brothers Holdings Inc. and Government of Singapore Investment Corp. traders are among an estimated 32 hedge-fund startups in Asia that are offering strategies beyond equities, after a record 180 funds closed in the region during last year’s global markets rout.

About 65 percent of hedge funds in Asia trade only equities, compared with a global average of 44 percent, data compiled by Singapore-based GFIA Pte and Eurekahedge Pte show. As a result, Asia’s managers underperformed their peers from Europe and the U.S. after the MSCI Asia-Pacific Index fell 43 percent in 2008, the biggest drop in its two-decade history. The U.S. benchmark Standard & Poor’s 500 Index declined 38.5 percent last year.

Mark Ong, the former head of global credit at GIC, manager of Singapore’s foreign reserves, is starting a hedge fund to exploit price discrepancies in the credit and equity markets. Paul Penkett and Stephen Cheng, former Lehman traders, started a fund in Hong Kong to trade everything from stocks to currencies.

“Having a diverse choice of strategies should help the Asian industry perform better than the market,” said Stefano Pizzo, managing director of Geneva-based Unigestion Holding SA, which invests in hedge funds. “It should also attract more investors.”

An index tracking Asia-focused long-short equity funds fell 22 percent in 2008, Eurekahedge reported. That compared with the 19 percent decline of the average hedge fund, according to Chicago-based Hedge Fund Research Inc.

‘Renewal Phase’

“This will be a renewal phase for the industry after the massive destruction last year,” said Melvyn Teo, a director at the BNP Paribas Hedge Fund Center at Singapore Management University. “Raising money is going to be tough though, despite the uptrend in the market.”

There were 17 new Asian hedge funds that started in the first five months of 2009 and another 15 may be set up, said Peter Douglas, a principal at industry consulting firm GFIA. The number of startups slowed to 17 in the second half of 2008 from 26 in the first half, Eurekahedge reported.

“Conservatively, we will see a net increase in the number of Asian hedge funds” through 2010, Douglas said.

The region’s hedge fund industry has been more focused on equities because most managers that emerged about a decade ago from the Asian financial crisis, which followed the July 1997 devaluation of the Thai baht, came from investment firms that bet on rising stock prices, a strategy known as long-only, Douglas said.

The number of new managers in Asia fell 26 percent to 43 last year from 58 in 2007, Eurekahedge said. There were only five startups in the fourth quarter, after last September’s collapse of Lehman froze credit markets. About 180 hedge funds shut in 2008 in the region.

‘Shakeout’

“With the shakeout in the last two quarters of 2008, a lot of hedge fund managers who weren’t so skilled left the industry,” said Han Ming Ho, who heads the funds practice group in Singapore at law firm Clifford Chance LLP. “We’ve really seen a much stronger profile of startup managers come to our doors.”

There may be more startups next year than in 2009 as capital-raising opportunities improve, Ho said. Managers plan to introduce so-called macro funds that seek to profit from broad economic trends and funds that invest in so-called distressed assets, he said.

“I haven’t stopped talking to startups since the beginning of the year,” said Ho, who helped open at least two hedge funds in the first quarter.

Macro Funds

Macro funds will likely be the best-performing strategy this year, a Deutsche Bank AG survey published in March said. About 47 percent of 1,000 investors surveyed in February by Germany’s largest bank said they plan to add allocations to macro funds this year, more than double the 21 percent in 2008. About 41 percent of the investors plan to add bets to distressed funds, according to the survey.

Andrew Gale, a former London-based executive at Dexion Capital Plc who started a macro fund on June 1, said investors are seeking returns that are uncorrelated with market swings.

“People are looking for strategies that are more skill- based than beta driven,” he said.

Gale co-founded Cavenagh Capital in Singapore with Lee Ka Shao, a former managing director of DBS Holdings Ltd.’s Central Treasury Unit. Lee produced returns that averaged 38 percent a year for the Singapore-based bank’s principal strategies business from 2001 to 2007.

Anurag Das, a former managing director at New York-based King Street Capital Management LLC, set up Rain Tree Capital Management in Singapore to start a distressed, event-driven and special situations fund.

Ong, who was a managing director at Merrill Lynch & Co.’s principal investing unit in Singapore, declined to give details on his capital structure fund at Barker Investment Management. Former Lehman Brothers traders Penkett and Cheng opened Omnix Capital Ltd. and started an Asia-focused multistrategy fund in May, Cheng said.

From Bloomberg

Jean Viry-Babel
senior partner
VBK partners

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