Derivatives structurers: appetite is massive
Are you a derivatives structurer? If the answer is yes, banks in Hong Kong and Singapore are eager to hire you - particularly if your forte happens to be structuring equity derivative products.
Hong Kong recruiters say banks' appetite for derivatives whiz kids is being stoked by soaring hedge fund investment, by Asian investors' growing familiarity with structured products, and by the pursuit of high returns.
"Experienced cash or synthetic CDO structurers and first-class equity derivatives structurers can expect a lot of attention from headhunters and competitors," says Aaron Stewart, a director at Pelham Search Pacific. "Asian institutional investors have woken up to complex structured products in their search for higher yields. The appetite is massive."
In fact, the Hong Kong and Singapore structured products markets have been hot properties since 2004. According to the Bank for International Settlements, the notional value of amounts outstanding on derivative products traded in the Asia Pacific region rose more than 160% between 2003 and 2005, to US$2,882bn.
Derivatives were one of the factors cited behind the Singapore exchange's 42.5% increase in profits in 2005 in its results announcement in January, while South Korea recently emerged as the world's busiest market for equity derivatives.
Looking for the right stuff
Recruiters say equity derivatives structurers are particularly sought after, as are derivative salespeople with knowledge of the Asian hedge fund market or clients in Korea. Most banks are hiring.
SG Corporate and Investment Banking, for example, recently hired Sandra Lee from HSBC to spearhead the bank's expansion in the Asian structured products market. Merrill Lynch hired Mathilde Roland from Deutsche Bank as a Hong Kong equity derivatives trader last October, and Wachovia and ABN AMRO have also been building in the region.
The requisite skill sets can be difficult to find. Mike Brennan, global head of financial markets at recruiter Alexander Mann, says the distinction between sales and structuring roles is often blurred in Hong Kong, because the small size of teams often obliges staff to work across both roles.
Stewart says this makes it harder to find staff with real structuring experience: "Plenty of people call themselves structurers, but they are really just salespeople who know how to tweak a product. They cannot put together a new derivative."
Toby Crosthwaite, managing director of the Hong Kong office of search firm Sheffield Haworth, says demand is increasing for both salespeople and structurers who can work across product types: "A number of firms are moving towards a multi-asset sales approach and are structuring their teams across client rather than product lines."
Pay is rising as well. According to a recent salary survey by Options Group, an international search firm, vice president-level equity derivatives traders in Hong Kong saw pay rise 15% to 20% between 2004 and 2005, to an average of US $300k. Stewart says good structurers can expect to earn upwards of US$750k, while those with client relationships can expect over US$1m.