Asia hedge funds continue to hire in 2020 despite COVID-19, KPMG and AIMA survey finds

Coronavirus pandemic saw Asia hedge funds promote work-life balance and invest in IT infrastructure

HONG KONG, Sept. 23, 2020 /PRNewswire/ -- Hedge funds in Asia have continued to increase their headcount and still have appetite to hire more talent despite the economic uncertainty brought about by COVID-19, according to a new joint report by KPMG and the Alternative Investment Management Association (AIMA).

The report titled Agile and Resilient: Alternative investments embrace the new reality surveyed 144 hedge fund managers globally, representing an estimated USD 840 billion in assets under management (AUM). Seventeen percent of the respondents are headquartered in Asia Pacific, while 11 percent are in Hong Kong. The survey was conducted in real-time throughout the pandemic and the report also includes one-on-one insights from key players across the industry.

Andrew Weir, Global Head of Asset Management, KPMG International, says: "The hedge fund industry has been innovative, agile, and resilient through the pandemic, and our survey bears this out. Our research shows that a good number of hedge funds see this as a time to attract new talent to their firm. They are evaluating their existing operating model and adjusting their core processes, cost structures and work environments so they are positioned to grow and meet the changing needs of investors."

According to the survey, 45 percent of hedge funds in Hong Kong continued to hire during the coronavirus outbreak, while 18 percent said they did not hire during this period but are still on the lookout for new talent. For Asia Pacific as whole, 35 percent stated that they increased their headcount during the pandemic, while 15 percent noted that they did not hire but have plans to do so. 

Hedge funds also believe the pandemic has created opportunities for attracting new employees and retaining staff, with forty-five percent of those in Hong Kong saying it attracts those looking for flexibility over where, when and the hours worked. Twenty-seven percent meanwhile believe it has opened up a pool of talent from firms closing in the same sector. This reflects Asia Pacific as a whole, where 30 percent of respondents respectively said the same.

In the rest of Asia Pacific (excluding Hong Kong, Singapore and Australia), however, flexibility was not cited as a benefit for attracting or retaining staff. Instead, the respondents there cited the chance to hire talented people from other industries, as well as talent from the same sector becoming available as the greatest opportunities (33 percent of respondents each), on the back of what some respondents have said is an ongoing talent migration to hedge funds that are prospering in current volatility.

Tom Kehoe, Global Head of Research and Communications, AIMA, says: "The COVID-19 environment has created new opportunities for hedge funds; catalysing industry actors to adapt to a new reality. Investment in smart sourcing and enabling hybrid working practices will not only improve efficiency but also prioritises employee wellbeing. Ultimately, this should benefit an industry that will emerge stronger and more diverse to sustain its future growth."

Michael Bugel, Co-Head of Asia Pacific, AIMA, adds: "Being the first region to experience this dreadful virus, the APAC hedge fund industry has led the way in showing its global peers how best to manage a transition to a more decentralised working environment. Throughout it all, hedge funds and the broader ecosystem has demonstrated its resilience in managing their operations and delivering on performance."

Many fund managers across Asia Pacific indicate that employees are experiencing greater work-life balance and job satisfaction as a result of remote working. Seventy-five percent of the respondents in Asia Pacific see the flexibility gained by employees working remotely as a positive, with one asset manager from the survey noting that working from home has been far more effective than originally expected. In some locations like Hong Kong, however, where lockdown was not as restrictive as other places, many continued to work in the office. Furthermore, 67 percent of Asia Pacific respondents agree that the current experience of working remotely has convinced them they could achieve better cost efficiency if they outsource some of their operations. Sixty-seven percent say they will likely outsource their tax and accounting services and 53 percent of respondents say they are likely to outsource their administrative services. Interviewed fund managers said they are focused on reducing the complexity of anything deemed non-core to their specific business, but understand that while roles can be delegated, responsibility and ownership remains with the firm.

COVID-19 has also made it important to have a strong technological infrastructure. Fund managers in the region have seized the opportunity provided by the pandemic to make changes to IT infrastructure, with 67 percent investing in their digital infrastructure and IT capabilities and a further 67 percent re-evaluating their cloud strategy. Over half of respondents, 53 percent, are investing more into cyber security.

The survey also indicates that 73 percent of the managers in Asia Pacific are concerned that their new decentralised work environment is increasing the cyber-risk environment. Seventy-one percent of the respondents said their employees may be more susceptible to cyber-attacks while working from home.

Bonn Liu, Head of KPMG's Asset Management practice in the ASPAC region and KPMG China, says: "The regulators in the Hong Kong are very focused on cyber security and, throughout the COVID-19 experience, they have been emphasising the need for financial services firms to protect customer and financial data."

About KPMG China

KPMG member firms and its affiliates operating in mainland China, Hong Kong and Macau are collectively referred to as "KPMG China". KPMG China is based in 26 offices across 24 cities with around 12,000 partners and staff in Beijing, Changsha, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Haikou, Hangzhou, Jinan, Nanjing, Ningbo, Qingdao, Shanghai, Shenyang, Shenzhen, Suzhou, Tianjin, Wuhan, Xiamen, Xi'an, Zhengzhou, Hong Kong SAR and Macau SAR.  Working collaboratively across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.

KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 147 countries and territories and have more than 219,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such. In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong firm can trace its origins to 1945. This early commitment to this market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in KPMG's appointment for multidisciplinary services (including audit, tax and advisory) by some of China's most prestigious companies.

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