China’s asset management industry is on the cusp of a big recruitment spree. Buoyed by the 31% upswing on the Shanghai stock market after the introduction of the Shanghai-HK stock connect scheme in November, regulators in both countries are moving onto the next big thing – cross-border mutual recognition for funds – and asset managers are already recruiting.
So far about 600 funds in both China and HK have been identified for future cross-border sales and trading and although the scheme is still waiting for final approval, HK’s regulator already believes that the “opportunities for the Hong Kong fund industry will be huge”.
"Cross border hiring activity has increased over the past 12 months and we expect it to continue this year," says Dean Stallard, regional director of recruiter Hays in Hong Kong. He says that fund managers are "searching for candidates with strong mainland fund investment experience due to increasing interest in the mainland investment market."
While some of this is investment staff, there’s inevitably a need for fund managers to send in the salesmen in Mainland China. One HK-based asset management headhunter, speaking on the condition of anonymity, says that “there will be increased opportunities for buy-side distribution people both in Hong Kong and on the Mainland.”
Persuading fund management talent across to the Mainland may be no easy task, however. Such talent flows are not without obstacles. For example, HK-based professionals are concerned that Mainland income tax rate is much higher than HK, and "they may not be keen to take these jobs if they’re based in the Mainland," said Alistair Ramsbottom, managing director of the Shanghai-based search firm The Blacklock Group.
But the opening up of China's capital markets is now a two-way process. Schemes such as HK-Shanghai stock connect and fund mutual recognition not only opens up China's capital markets to the world, but also allows Chinese investors to invest into the global market. HK then naturally becomes the first stop for Chinese outflowing capital. Therefore, "more China funds are focusing on the HK investment market given it is the gateway to the international market," suggests Stallard.