Running bars or burning the midnight oil: stark choices for Asian hedge fund managers

Expat hedge fund managers in Asia are returning home and touting their wares to firms in the UK and the US as job opportunities dry up locally. The market is still tough, but hedge funds in the Western world are realising the value of Eastern experience.

“Two years’ ago, there were no people coming to us from hedge fund managers in Asia,” said Robert Olman, founder and managing partner of New York-based headhunters Alpha Search Advisory. “Now, what was a trickle is slowly turning into a flood of people returning home, and Asian experience is not a bad thing to have on your resume.”

Hedge fund managers seeking work in Western locations are not entirely being welcomed with open arms,  but there are a few reasons why firms want them.

For a start, wary of increasing operational costs, hedge funds are deciding to cover foreign markets from their headquarters rather than opening a new overseas branch, said Antony Keizner, managing director of US hedge fund headhunters Glocap.

“Even though people are returning back, they continue to follow overseas markets,” he said. “For individual portfolio managers and traders this has led to increasing numbers who aren’t sleeping regular hours these days.”

Paul Smith has over 25 years’ experience in hedge funds in Asia, most recently running his own firm Asia Alternative Partners. Last year he quit the sector to head up the Asia-Pacific office of the CFA Institute. Even though experience of the Asian market isn’t considered “cutting edge” by hedge funds in the Europe and the US, there are still reasons why expats returning home will find work, he said.

“Most funds are global in nature, so experience of trading in Asian firms will be increasingly valuable in Western hedge funds,” he said. “What’s more, firms are looking to Asia to raise money, so anyone with local connections is a going to be valued in places like the UK and US.”

Olman said that US hedge funds are less likely to hire an equity analyst with experience in Hong Kong or Singapore, but will gladly receive those who have experience of investing in “real assets” as well as metals and mining.

Those who lose their jobs in Hong Kong and Singapore are not finding many new opportunities locally. Hedge fund managers are often going to fund management houses, consultancies or companies outside of the sector all together, according to Bloomberg. Nearly 300 hedge funds have closed in the region over the past two years, according to data from EurekaHedge, over 30 more than opened during the same period.

“People have gone into property development, running a bar, teaching, consultancy or other parts of the financial sector,” said Smith. “Sitting it out may be the best option for some: ultimately, this is a cyclical business and the hedge fund industry in Asia will return.”

Part of the problem for hedge fund managers in Asia is that opportunities outside of Hong Kong and Singapore are largely closed to foreigners. If you don’t speak Mandarin, it’s very hard to move into mainland China, said Smith. To compound the problem, hedge funds covering Asia in Western locations also want Asian language skills, said Keizner.

“Rather than demand for returning Westerners, we’ve seen a trend of increasing demand for analysts with native Asian language skills,” he said. “As questions have arisen about the quality of company reporting, particularly in China, the ability to interview local management first hand is increasingly valued.”