Reuters | Sat Jul 24, 2010 | 5:38pm IST
Unlike many young, finance-focused Asian graduates before him, Boon Seong Lim is happy to stay close to home to launch his career. Lim, aiming for a mergers and acquisitions department, represents a new wave of Asian recruits who don’t feel the pull of having to start on Wall Street or in London’s City, partly mirroring a broader shift in the global banking sector where talent and transactions are migrating from West to East. "People used to think it was better to start your career in London or New York," said the 21-year-old Malaysian, speaking between sessions at a packed Asian investment banking conference hosted in Singapore this month by the London School of Economics. Now, launching a finance career in Singapore, Hong Kong or elsewhere in Asia can get you just as far in the business. For the banks, the move to hire, develop and promote homegrown talent in Asia is a key part of their expansion in a market that is becoming a major contributor to their bottomline. "There is recognition of the fact that the world is shifting in terms of economic growth and importance, and the regions here are going to be very relevant in terms of the level of activity," said Farhan Faruqui, head of global banking Asia Pacific at Citigroup.
While those born in the United States and Europe still occupy top spots at investment banks in Asia, a new crop of Asian professionals has occupied corporate suites in recent years, with a trickle down to trading floors and sector teams. "I’m a dying breed," said Ronnie Behar, Credit Suisse’s head of Southeast Asia M&A, speaking at the LSE conference. Behar, a Westerner based in Singapore, was referring to the number of Asia-bred bankers joining Credit Suisse, which has ramped up hiring in the region. "I don’t think there’s the need now, if you’re starting your career, to go work in the U.S. or Europe," Behar said, adding Asia’s M&A sector has gone from a small, financing-focused product just five years ago to a significant part of a bank’s business in the region.
The clout and experience of earning stripes in New York or London still holds serious weight in banking as these financial centres are home to most of the world’s top banks and handle much of the largest transactions. But Asia has seen two of the world’s largest deals this year: Prudential Plc’s failed $35.5 billion takeover of AIA and the $19.3 billion IPO of the Agricultural Bank of China. Asia M&A activity now comprises one-third of global volume — up from just 7 percent in 2006, according to Thomson Reuters. Investment banks contacted for this article would not give actual hiring statistics, and few consultants break it down by region. But there is plenty of anecdotal evidence of Asian talent staying in the region, and banks’ recruiters back this up.
The promotion of Asians through the ranks sends an encouraging message to business school graduates in the region. The top ranks at investment banks in Asia were once heavy with so-called "gweilos," a Cantonese word for foreigners. In recent years, UBS, Citigroup, Bank of America, Credit Suisse and Goldman Sachs are among those to have promoted Asians to top, Hong Kong-based roles, coinciding with the return home of overseas educated Asian bankers. These returnees, known as "haigui" — a Mandarin term that translates as "sea turtles" — are increasingly filling posts. "The number of kids coming back, educated abroad, wanting to be back in Asia is huge," said Alexis Adamczyk, head of equity capital markets Asia at HSBC. "The trend definitely is that more and more locals, or returnees, with language skills, with connectivity, are coming back to Asia."
Entry-level salaries are fast catching up with the developed world, adding a further incentive to staying in Asia. In Singapore, Ivy League recruits are signing contracts of up to S$10,000 per month ($87,000 per year), according to a local consultant who did not want to be named because compensation is usually kept private at the banks. The desire to start a financial career in Asia extends beyond investment banking and into other related fields as well. Jiachen Song, a recent graduate from the Banking and International Finance program at the Shanghai University of Finance and Economics, said she would like to work outside China at some point, but she’s content to stay for now. "This is an emerging market that is taking off," said Song, who attended the LSE conference in Singapore. "I’m confident there are great opportunities in Shanghai."