New investment strategies drive demand for ESG and data science talents

Evolving investment strategies among private equity funds and asset managers are driving new recruitment trends in the financial services sector in Singapore and Hong Kong.

As the benefits of incorporating environmental, social and governance (ESG) factors into investment decisions becomes increasingly clear, firms are looking to recruit talents with expertise in this area, according to buyside recruitment specialist Principle Partners.

Paulina Hatta, Director at Principle Partners, explains: “Private equity funds have traditionally been very strong on the governance portion of ESG, but in the past few years they have started to focus more on the environmental and social side of things.”

As a result, firms are looking for candidates with experience of applying ESG considerations into investment strategies, as well as ESG consultants.

“Many ESG candidates are based outside of Asia, particularly in Europe because ESG is a lot more developed in Europe, so we are seeing some candidates move here.

“Firms are also looking at ESG consultants in Asia who understand ESG frameworks and the United Nations guidelines and can help investment funds come up with their own frameworks,” Hatta says.

At the same time, the increased use of data in investment decisions is creating demand for candidates from data science backgrounds.

Hatta explains that funds are increasingly leveraging an investment strategy known as ‘quantamental’ techniques, which combines a quantitative approach using mathematical models and big data, with traditional analysis of a company’s fundamentals.

“There is a shortage of talent in this area given that it is a relatively new field. We have not had many professionals focus on this sector in the past, so there is a bit of a crunch. The front runners are very sought after,” Hatta says.

As a result, while firms prefer data science talents with previous asset management or private equity experience, they are also open to candidates with transferable skillsets looking to make a lateral move.

Phoebe Ling, Director at Principle Partners, has observed a similar trend in Hong Kong and Northeast Asia. “Firms want candidates with degrees in maths or financial economics, candidates with strong modelling skills. Some firms are also asking for candidates with biotech or chemistry degrees as the healthcare sector is taking off,” she says.

Another recruitment trend Hatta has observed among private equity and asset management firms is an increased focus on diversity in their teams.

Firms are particularly looking for a good gender balance to ensure their teams benefit from diversity of thought, while they are also keen to have people from different countries from across South East Asia.

“Private equity funds in Singapore mostly cover South East Asia, and as they look at making potential investments, it is good to have different nationalities represented on their teams to help them assess these investments,” she explains.

Ling says private equity firms in Northeast Asia are also looking to improve the gender diversity of their teams through recruiting more women. “Firms are under pressure to hire women at a junior level to improve the diversity of their talent pool,” she says.

She adds that candidates with strong language skills, such as those who speak Mandarin, as well as an additional language, such as Japanese or Korean, are also highly sought after.

“In Hong Kong, there are domestic funds that are largely focused on domestic deals and SMEs, and they prefer to hire candidates who are well integrated into Chinese culture. These candidates are also in demand from western funds that market themselves as having a local team to serve the local market,” Ling explains.

Alongside roles in ESG and technology, Hatta says private equity funds and asset managers are also looking to fill a range of investment and non-investment roles.

The investment roles are mainly at the associate level, as funds like to promote talent from within. On the non-investment side, firms are looking for talents to fill positions in compliance, risk management and operations, with demand particularly strong among private equity funds that are setting up in Singapore for the first time.

Ling says funds are willing to consider more junior candidates due to a shortage of talent. “In the past, they would only consider candidate with at least 24 months experience, but now they will hire people from a lower level.”

After seeing a slowdown in recruitment in the middle of 2020, when Singapore was in lockdown, Hatta says the end of the year has been busy as firms catch up on delayed plans.

Recruitment is particularly buoyant among private equity funds that are taking advantage of the current situation to actively deploy their capital and acquire assets at a good price.

She advises candidates looking for a new role to be open-minded, particularly towards some of the new funds that are being set up in Singapore.

“They may not have the same track record or be as well known in this part of the world as some of the mega funds, but they have very strong platforms. Spots at private equity funds are limited, so it is always good to keep your options open,” Hatta says.

Principle Partners specialises in recruitment in financial services and emerging technologies in Asia, and during the 10 years it has been operating, it has built up strong networks with both hiring firms and candidate pools.

Hatta encourages candidates who are interested in finding a new job to get in touch with Principle Partners, as many of the positions it fills are not advertised.

“They should reach out for a chat so we can assess what roles might be suitable for them according to their skillset and experience. We are always speaking to hiring managers, and we have a good sense of the different type of roles out there and the culture of different firms, so we can match candidates to the position that best suits them,” she says.