Asset managers are looking to hire more research analysts in Asia, in a sign that the rapid growth of the region's bond markets is attracting the attention of global funds, IFR reported. Asia's leading companies, from Hong Kong's Hutchison Whampoa to India's Reliance Industries, have been frequent issuers in the G3 bond markets for some time. However, the growing number of debut issuers and smaller, lesser-known companies is driving demand for local experts who can help tell the good credits from the bad.
"Within Asia, we have hired local people who can speak Mandarin, develop relationships on the ground and keep a close watch on the local flow," said Chris Gootkind, director of credit research at Loomis Sayles, a Boston-based investment firm with $221 billion of assets under management at the end of June.
Loomis, like many of its competitors, plans to add more analysts as Asia, particularly China, accounts for a greater percentage of its global credit portfolio.
"Our share of Asian credit has grown to between 2 percent and 5 percent in our diversified debt portfolios, and as we increase that ratio, we will look to add more people on the ground," Gootkind told IFR, a Thomson Reuters publication.
The hiring trend at investment houses in Asia and elsewhere presents a striking contrast to what is happening at global investment banks and brokerages, where tougher regulations and thinner trading profits have fuelled a slow exodus of credit traders and analysts.
In many cases, sell-side credit professionals are seeking new jobs at buy-side firms, where the lighter regulation allows them to command higher salaries, head hunters say.
Adding more local expertise will help investment funds distinguish the better credits when new offerings are announced. It will also allow them to identify opportunities before the competition, investors said.
Keeping up with Asian debt issuance is already difficult as emerging-market investors, including big local private banks, usually corner the bulk of the offerings. During a busy period, however, it can be even more difficult to seize an investment opportunity, especially if the managers are based in Boston or London, buy-side sources said.
And the Asian G3 bond market, which has posted record volumes in each of the last three years, has been busy for a while. As such, resources on the buyside have been stretched.
Last year, G3 volume from Asia, excluding Japan and Australia, reached $142.8 billion, according to Thomson Reuters data. So far this year, borrowers from the same region have priced $138 billion of new issues, well on their way to besting the 2013 figure.
Diversification has also played its part in asset managers' Asia push. As the U.S. debates raising interest rates and the euro zone battles with deflationary pressures, investors have had to look elsewhere for returns.
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