Jan

13

 From the front lines as a soon to graduate grad student in the market for employment in the finance sector, the US can't hold a candle to China/Asia in terms of jobs and opportunity. The US has effectively become a place where a "trade" wins out over a degree. There are very specific skills and requirements to get in the door these days in America. Quants want C++ programmers and data scrubbers, fundamentalists want financial statement analyzers and channel checkers, macros want Econ PhDs who chaired a University Econ program or spent half a life with the IMF/Worldbank/Fed (I guess this one isn't so much a "trade"), sales teams want cold callers and entertainers who also understand the business. Once one enters one of these "silos" good luck moving to another unless you possess a multitude of different degrees, skills, and designations (Compu Sci, Econ, Stats, Math, Finance, MBA, Engineering, Hard Science PhD, 2 yrs Inv Banking, CFA, C++, MatLab, VB, CMT, etc.). And not many opportunities exist which don't fit into one of these categories.

The Asian markets on the other hand are so illiquid on a relative basis and so many rules apply that they generally want smart people who can figure out cross country nuances and a trader serves almost as an international lawyer figuring where to trade, how to trade, and how to settle (while learning a lot of markets and likely seeing vast opportunities). On top of this, the Asian trading desks are expanding headcount at a much higher rate. One desk, which will remain unnamed to protect the innocent, is hiring over 10 new people in their group alone in the next two years. I have not heard of a single US desk with a similar hiring plan. If anything I hear of jobs being cut in the USA and openings result from people leaving (one out, one in). Moreover, these jobs in Asia are very diverse. A person on a desk in Asia will get to deal with virtually all product types (equities, credit, FX, commodities, IPOs, etc.) and a ton of different countries. In the US it tends to be segmented by type further siloing (not sure this is a word) the silos (i.e. fundamental equity or macro FX). From what I am told the majority of job takers in Asia wind up with their choice of options (buyside/sellside, US/abroad, credit/macro/equity, etc.) after 9 to 12 months or they get promoted internally. If you pick up some Mandarin or Cantonese along the way, forget it you will be an eagle with razor talons competing for prey in a world where everyone else can't fly and is blind. A year in America in a silo within a silo will probably mean a relatively small bonus and the chance to keep climbing the ladder in your specific subsilo. So choose your silo wisely, to the extent you have a choice, as your first decision may be your last.

The American dream seems to now be manifesting itself in Asia. It is unfortunate that in order to have the best available options down the road in finance one will likely have to leave friends and family and venture to Asia. Unless said person chooses to be a "trade" professional or gets very lucky.

Yishen Kuik writes:

For decades, investment banking in Asia ex-Japan used to be a hire and fire business because of a very lumpy deal flow. China, and it's large growing capitalistic economy is a fundamental game changer.

However, the need to speak Mandarin fluently will become essential. There are few people at the top today who have the relationships, the experience and the language skills, hence the opening for Americans and Europeans to occupy the top spots. All junior people however, have the language skills, and in time they will acquire the experience and relationships. Within 8 years, all the associates working on Chinese deals today will be Managing Directors, and they will have the entire package.

40 years ago it was possible for a Frenchman to be the pre-eminent American investment banker. Today that notion is highly unlikely. Affinity is where the edge is.

Cantonese is not the language of business and has little value in the financial world even in Hong Kong. The people of Hong Kong, whose manufacturing was hollowed out by China long before Americans heard of the word outsourcing, are now undergoing the additional indignity of being culturally and linguistically hollowed out.


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