Start-ups spark jobs growth in Hong Kong hedge fund sector

New hedge funds in Hong Kong, rather than established ones, are expected to generate most of the vacancies in the sector this year.

"We saw more players coming from the UK and US in 2010. This isn't slowing down, it's an upward trend," says Christina Ng, manager, financial services, Robert Walters.

Of course, these being hedge funds, the number of jobs they create is limited. "While new funds set up in HK last year, they are all very small in terms of headcount. If more than 50 new people with experience were relocated to HK last year, that would be quite a lot," says Matthew Hoyle, director of search firm Matthew Hoyle International.

A typical start-up usually only employs about four people at first: two founders (CEO and COO/CFO); an office manager; and a junior operations/finance person. It then hires traders, analysts and extra ops staff when needed

Yet even such a small scale expansion comes with challenges. The hedge funds prefer to poach from competitors as these candidates can hit the ground running, but it's hard to attract someone who is entrenched at another firm and enjoys carried interest there, says Ng.

The financial crisis reduced the flow of candidates between the sell side and the hedge funds, she adds. "Before the GFC a large majority of investment bankers would potentially be interested in a hedge fund role. That changed significantly post GFC as people thought more about the risks of working for one."

However, Hoyle thinks that investment bankers are at last starting to feel more positive about making the move. "You have a lot more to gain at the buy side, so typically, if you are experienced, you want to go there when a new bull market starts, which is around about now."