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According to a recent Bloomberg report, all is not well in the Asia hedge fund job market. Many high performing professionals that joined the rush to the promising boom in Asian hedge funds are now returning to the United States or Europe, or are alternatively leaving the industry for other areas of finance. Funds in the area have struggled to grow their asset bases, and regulatory changes certainly are not allowing for a positive outlook.

Asian Hedge Funds Continue to Struggle to Attract Assets

Following the 2008 global financial crisis, many overseas hedge funds saw a flight of capital returning to traditional destinations such as the United States. Unfortunately for the hedge fund desks of Hong Kong, Singapore and Malaysia, this capital has failed to return in the subsequent rebound. Currently, Asian hedge fund assets sit 28 percent below their 2007 peak, putting real pressure on firms to reduce costs in these jurisdictions. Globally, the opposite has been true, with hedge funds seeing a 21 percent increase in total assets to a new high of $2.3 trillion in December of 2012. This represents a real shift in assets back to traditional investment markets.

Performance has also been an ongoing issue in the region, with only 39 percent of Asian hedge funds entitled to performance fees for being above their high-water marks at the end of 2012. Without stronger bottom line results for investors, the attractiveness of investing overseas will certainly continue to decline, putting even greater pressure on hedge funds in the region.

Promise Not Living Up to Expectations

For many hedge fund professionals that made the move to Asia, the promise of expansive opportunity and high compensation has remained unfulfilled. According to Will Tan, Managing Director of a leading Singapore financial recruiting firm, “five years on, many of these guys are tired of the huge swings in hedge-fund compensation and some have not tasted the sweet promise of hedge-fund payouts.”

The dissatisfaction with results in Asia has led some individuals not only to reconsider their careers geographically, but leave the hedge fund industry altogether. According to Tan, many “long-time veterans (are) leaving the hedge fund space for more stable careers in finance.”

Smaller Funds Comprise the Majority of Asian Hedge Funds

One major shift over the last several years has been the emergence of smaller hedge funds in the Asian market. Currently, 54% of Asian hedge funds manage less than $50 million, which is up considerably from 39 percent just 5 years ago. Unfortunately for the smaller funds, the risk management policies of large investors sometimes prohibit allocating investment to those managing less than certain critical hurdle amounts, further reducing the number of interested investors.

Uncertainty and Volatility to Remain

While the story surrounding Asian hedge fund employment certainly does not appear too optimistic today, it’s important to keep the region in perspective. The geographic area contains several of the world’s fastest growing economies and is also home to an increasing amount of privatization of traditional government monopolies. These trends bode well for the investment industry, and there may be a cyclical rebound in future years. That said, increasing regulation and concerns over risk management from investors based in traditional markets will continue to weigh on the industry. As a result, uncertainty and volatility will continue to be underlying attributes to the Asian hedge fund market for the foreseeable future.

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A hedge fund is a fund that uses more non-traditional investing strategies to try to reduce volatility and risk, while attempting to preserve capital and deliver positive returns under ALL market conditions. This last part is the most notable difference from traditional investments. Regardless of whether the market is moving up or down, a hedge fund strives to capture positive returns.

Because of the use of non-traditional strategies, it takes a few more skills and characteristics to make your hedge fund experience a positive one. Here are the basics for those looking to land entry level hedge fund jobs:

Big, Balanced Brain – most investing is a numbers game, but hedge funds require the use of both the left and the right sides of the brain.  The left side of the brain is the logical, thinking side most often associated with reasoning, speech, writing, and numbers/math. The right side is the creative side associated with 3-D forms, art, music, creativity and imagination.  Hedge fund investing requires reading for specific details and facts (left brain), but also skill in showing relationships between ideas (right brain).

Big Wallet – historically, hedge funds have required upwards of $1 million as a minimum investment. There are funds lowering their minimums to $250,000 or less, but this is still more than the average investor has at his or her investing disposal.

Big Stomach – obviously I’m not being literal here, otherwise the U.S. would lead the world in successful investing, but I digress. Investing in the stock market at any level takes nerves of steel, but especially when you are working with large sums of money in non-traditional investment strategies. You must be disciplined and diligent to execute the hedge fund strategies to extract their maximum potential performance.

As for working in the industry, hedge fund managers are highly experienced, specialized professionals. If you are looking to enter this field, here are a few ideas to get you started:

Consider getting your MBA from a well-respected Business school – having a solid educational foundation will demonstrate business and finance skills that will be an asset to the fund. You will have learned everything from global economics and finance, to marketing and operations.

Get some banking experience – Hedge funds look for people that have a background in the financial industry, but also have client relationship management experience, good communication skills, and can demonstrate strength in teamwork, organization, quality, and accuracy.

Build your network – often talked about, rarely done well. People in hedge funds are notorious for keeping their networks small. To get in you need to identify people that will help support your efforts. Start with current associates, bosses, co-workers, and vendors/wholesalers with whom you already have a relationship. Ask if they know anyone in the hedge fund world. If so, would they be willing to introduce you? You can also attend hedge fund networking events or conferences. Talk to as many people as possible to identify people that might be able to shepherd you or serve as a mentor as you pursue opportunities that interest you.

Like any other specialized job search, employment with a hedge fund will take time. You will have to build relationships, as well as demonstrate your knowledge and skills as part of creating the building blocks for lasting success.

About the Author:

Debra Wheatman, CPRW, CPCC, is a Professional Resume Writer and Career Coach with nearly two decades experience working with professionals in finance, management consulting, legal, and technology.

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Jobless on Wall Street

January 3, 2012

When the latest unemployment numbers were released,  it showed an unexpected drop in unemployment. The unemployment rate fell to 8.6 percent; experts were predicting that the rate would remain at 9.0 percent. There were 120,000 new jobs added in November, many of which were in the professional and business services industries. Unfortunately, this is not […]

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