Currently investors are usually served by centralized sales and marketing staff who typically do bi-annual “fly-ins” from head offices in the United States or United Kingdom and offer “suitcase coverage.” Very few Asia-based marketers are hired by established global funds. The Asian offices of those global funds typically have neither a local marketing department nor even a single local marketing staff member.
However, funds are increasingly realizing that this is no longer good enough. First, Asian institutions are now used to seeing dedicated sales, marketing, and client service professionals in the same time zone. This is primarily due to the fund of fund and long only segments but also comes from some of the larger global single manager and multi-strategy funds.
Second, Asian institutions are very different from U.S. and European institutions and differ widely among themselves. Some need substantial education and product marketing. In addition, national differences are stark: What might work with leading Hong Kong and Singaporean institutions will not work in China. Korean institutions value depth of relationships above all else. Australian superannuation funds are extremely sophisticated. The Japanese market is entirely distinct from the rest of Asia. Japan has a particularly long sales cycle, a conservative client base who rarely communicate in English, particularly high after-sales service requirements, and a burdensome and confusing regulatory environment; together these factors make establishing an effective and legal marketing effort particularly time consuming and expensive. These issues have forced some U.S. and European funds to try covering Japan from offshore locations such as Hong Kong or Singapore, whereas others have committed themselves to attaining full-fledged Japanese securities licenses.
Third, senior-level executives and decision makers at such institutions do not consider the English language the global business language of choice, as many of them do not speak English and find any language barrier an impediment to the relationship-building process.
We expect to see significant marketing and investor relations hiring in the Asia region in 2009 and beyond. The successful approach will clearly define client and geographic segments and build a local hiring strategy around the growth strategy of wider business in Asia. For instance, in Singapore funds raised from government linked institutions will come with a strong but not explicit expectation that the hedge fund will open an office in the city-state. If investment professionals get stationed there as well, then expect the fund raising to be that much easier.
Meanwhile, the talent pool of individuals who have strong relationships with Asian institutions is wide but not deep. With the generally limited talent pool in Asia, in particular for strategies other than Long/Short equities, retention remains a key challenge. Candidates who can act as product specialists, explaining the fund's strategy and acting as product ambassadors, are more in demand than those who might have a wider competency in selling a number of different long-only equity and debt products. Yet the result of hiring a first-class marketing and sales professional in the Asian region will be increased funds from a new client segment that places enormous weight on long-term relationships. And so, global funds must first be sure they are ready to handle such relationships throughout their organizations.
