The talent shortage in Singapore prompts questions for fund managers

The funds industry’s Singapore talent shortage is not part of the “Great Resignation” – but it’s still a real problem

In Singapore and South-East Asia, the Great Resignation is having little impact on the funds industry – few in Singapore are willing to leave the security of a well-paid office job to start a home business.

However, even without it there is a real and growing talent shortage in the fund administration sector in Singapore as South-East Asia’s fund managers struggle to find the people they need. This raises some tricky questions.

A funds industry talent shortage in Singapore?

People who get into the funds industry in South-East Asia rarely want to get out. The talent shortage isn’t down to any staff exodus. Large numbers of bright, ambitious young people are attracted by the sector’s huge potential.

Yet demand for talent is outpacing supply. While people don’t move out of the funds industry in Singapore, there is considerable movement within it.

The reasons for fund growth in Singapore are many and varied, but all point to sustainable growth.

The Singapore government’s Variable Capital Company (VCC) scheme, a corporate structure specifically for investment funds that was launched in 2020, is a key driver of growth. Despite the pandemic, there are now about 400 VCCs in operation.

The rising number of high-growth companies in South-East Asia increasingly turn to the city state’s well established private equity and venture capital funds for capital funding.

At the same time, strong financial services and fintech ecosystems help the smooth flow of capital and credit. Private equity and venture capital assets under management grew by over 50% between 2020 and 2021.

It is a similar story for real estate funds and hedge funds, which are also booming due to strong institutional interest.

A red-hot talent market for funds in South-East Asia

Increasingly, the growth of fund management in South-East Asia is accompanied by soaring salaries and an unsustainable hunt for talent.

Headhunting and poaching are commonplace. This makes life especially difficult for new entrants without the resources to compete for the best people – a significant proportion of the local funds industry.

When managers leave a big firm to set up on their own, they do so because they have the experience and expertise to find investment opportunities and attract investors. But they often lack the support staff to fulfill all regulatory and reporting requirements over their entire fund lifecycle that they had grown accustomed to at their previous jobs. They quickly discover that these crucial roles are hard to fill.

Advantages of fund administration in Singapore

Fund administration in Singapore enjoys several advantages. As a global financial hub, Singapore attracts a diverse and skilled talent pool. The talent shortage would be far worse without a steady influx of professionals from abroad given the island-country’s small geographical size.

Singapore’s status as a centre for technological innovation is also helpful. Technology can remove some manual processes involved in fund management, making the work less labour-intensive and ultimately more cost-effective.

That said, technology is a partial solution at best. Fund management still relies on the applied knowledge of experienced people, in front, middle and back office functions.

Technological advancements are becoming increasingly important, but human capital is still paramount.

Recruiting for funds in Singapore

Neither the increased talent pool nor better technology are enough to solve the talent crisis. That leaves an important question for funds struggling to recruit.

Are they prepared to get into the HR business?

At Intertrust Group, we scout the same talent pool as many funds, but with a different approach.

Our scale lets us establish good relationships with recruiters, enabling us to create and nurture a pool of quality candidates.

Finally, we can do more to make sure talent isn’t lured away by competitors. This is about offering a good working environment, extensive learning opportunities, a holistic wellbeing strategy and flexible working arrangements.

We can offer these things because we’re part of a large global business with a well-established HR function.

Emerging funds must decide if they want to create and manage fully formed recruitment and retention strategies. Or whether outsourcing their people problem to a trusted third party with significant fund administration expertise is a better fit.

Why Intertrust Group?

• As a strategic partner, we offer a full-spectrum service tailored to meet all back-office needs throughout a fund’s lifecycle against a background of ever-increasing reporting demands.
• Our proprietary innovative technologies combine with global knowledge and experience to deliver added-value services for all asset classes, while increasing manager visibility of portfolios on behalf of a fund’s investors.
• Our expert teams harness tools and cutting-edge technologies to eliminate costly errors in fund administration and corporate actions, investor relations and portfolio management.
• Intertrust Group is a publicly listed company with 70 years’ experience in providing world-class trust and corporate services to clients around the world.