HK
Layoffs batter prime brokerage
26 November 2008
Citigroup and Morgan Stanley are among a growing group of international banks that are slashing prime brokerage jobs in Asia. At the root of these redundancies is a shrinking hedge-fund client base. Redemptions are surging and funds are cutting their capital-raising or quitting Asia altogether. The banks are becoming less willing to lend and their prime services teams are looking overweight.
Morgan Stanley is making up to 40% of its Asian prime brokerage team redundant as part of its global plans to reduce headcount in its international securities division by 10%. Meanwhile, Citigroup has dismissed its three-strong prime brokerage team in Singapore due to poor growth in the hedge funds it invested in.
Andrew Oliver, managing director, Profile Search & Selection in Hong Kong, says the employment market across all of prime services is getting much tighter. “While for now there’s still a need for the whole suite of all prime services roles – from equity finance to client services and relationship management – the number of people in each function is declining,” he adds.
Growth and strategic recruitment has ground to a halt. Oliver explains: “Last year, the banks were open to watching talent and taking on superstars, now it’s essential hiring only, and the emphasis is on risk management roles, rather than sales.”
The rapid growth of prime services in Asia has only happened in the last four years, so most professionals in the sector came from other banking roles such as operations, trading, custody, relationship management and technology.
“It’s a tough jobs market for those who’ve been laid off, with few prime services vacancies available elsewhere. But only a small percentage of people have long careers in the industry, so most have the option of attempting a return to their previous role,” says Oliver.
