As billionaires flock to the tiny city-state, a shortage of qualified professionals is starting to bite.
2021-03-11 By David Ramli
In the dog-eat-dog world of hedge funds, giving an internship to a 16-year-old is almost unheard of. But when local talent is hard to find, teaching a minor how to generate alpha can be a worthwhile investment.
And so last summer, high schooler Yi Ke Cao spent two weeks at Modular Asset Management, a near $1 billion Singaporean hedge fund spun out of Millennium Management LLC. She crunched data in spreadsheets, chatted with veterans and watched nerve-wracking meetings where money managers defended their investment ideas from peers.
Cao is the youngest in a wave of Singaporeans being readied for the world of active asset management. As billionaire tycoons and global hedge fund giants move en masse to the tiny city-state, a shortage of qualified professionals is starting to bite — forcing the government and investors to do more to cultivate the industry’s next generation.
“I was a bit terrified, I didn’t know how to react to them speaking to me and I didn’t know how to hold a conversation but they were welcoming,” Cao, now 17, said of her first day in the office, having beaten 10 classmates to land the role. “I’m definitely more likely to consider it now.”
A mix of geopolitics and financial incentives is ushering a flood of money managers to Singapore. Some hedge funds have opened there amid the recent turmoil in Hong Kong, while other companies are choosing it as their regional base. Family offices — the private firms created by the ultra rich to manage their affairs — have been flocking to the country, with Bridgewater Associates founder Ray Dalio among those establishing units there recently.
While the obvious solution for such firms would be to import talent from traditional hubs like Europe and the U.S., the Singapore government is pushing to boost local hires instead of relying on expatriates. The minimum salaries for taking on foreign employment pass holders are rising and incentives granted to some would-be investors come with requirements to hire Singaporeans.
Even so, few asset managers would be willing to recruit unsuitable locals for serious roles — an issue Singapore is trying to address. The government has launched training subsidies that help pay for asset management courses, and it aims to give citizens global experience by covering as much as S$100,000 ($75,000) in costs when financial institutions send selected staff for overseas postings. Slick websites try to make climbing the corporate ladder an easy, colorful process.
Other efforts help retrain existing executives. The Investment Management Association of Singapore launched its iLearn platform in May to help workers upskill, and more than 800 people have used it for training, Chief Executive Officer Carmen Wee said. In its latest survey of members, respondents said building and retaining talent pools was the equal second-biggest consideration that would impact business over the next 12 months.
At the Wealth Management Institute, which scored a $25 million donation from Bridgewater’s Dalio in October partly to help train policy makers and investment professionals, lecturers teach the finer points on managing money. Lim Chow Kiat —the CEO of sovereign wealth fund GIC Pte — chairs its board of trustees.
Last November, a WMI class on family offices was filled with a motley crew of professionals — tax experts, private bankers, lawyers and more. By learning from each other and holding exams instead of conferences, it hopes to have certified specialists ready to be plugged straight into family offices and hedge funds.
“We really want to build a strong cohort of investment professionals with deep knowledge about how the markets work,” said WMI CEO Foo Mee Har. “The action is in Asia and over time I’m hopeful that a lot more of the decision-making will move to Asia.”
Some firms are solving talent shortages in-house. Quantedge Capital CEO Suhaimi Zainul-Abidin, whose firm manages $2.5 billion, said most of its new hires will likely come directly from internships. During a recent program it winnowed 300 CVs down to 30 sets of tests and interviews before the 10 survivors were given five-week internships. Of these, just three secured a job offer.
Singapore once produced “graduates who’d have the ability to join banks and big financial institutions because those were the names we were trying to draw into Singapore. Today the nature of the job has changed,” he said, noting that local schools were adapting well.
Modular CEO Jimmy Lim is looking to draw from the best of local and expat talent through a portfolio manager conversion program. Over 12 to 24 months, experienced professionals are taught in Singapore how to use the firm’s proprietary risk management tool and manage leverage.
“By the end of 18 months you kind of know if this person will be successful or not in this job and if they are, their assets under management will increase,” Lim said. “If they’re not, then they typically leave.”
Another way Lim grows his team is to take less experienced staffers, such as researchers, and train them over several years via its talent development program to become portfolio managers. Jesper Rooth, who joined the firm when it was still part of Millennium, is a graduate of the program. With the guidance of colleagues, he’s grown able to survive its weekly pitch meetings with his investment ideas largely intact.
“The prospect of being able to transition into a portfolio manager was compelling so that was one of the reasons I chose to join Jimmy,” said Rooth, who began deploying client money in December. “It’s a big responsibility but it’s also a very big opportunity for me personally so it feels very good.”
Back to School
But the key to Singapore producing world-class talent may require earlier intervention. Raffles Girls’ School, where Cao earned her internship, places students in a range of financial institutions. It’s recently run webinars on hedge funds and the future of banking with industry professionals, Principal Haslinda Zamani said in an email.
For Cao, whose parents have both worked in finance, the time was valuable — especially given she never really knew about hedge funds before applying. Now with a boost of confidence and a little experience, the prospect of becoming a money manager feels a little more possible.