Written by Samuel Shen and Selena Lee
HONG KONG (Reuters) – Disillusioned Chinese bankers and fund managers say careers in finance, where prospects are so dependent on government campaigns and regulations, are being replaced by fields as diverse as education and stand-up comedy. I’m giving up.
Increased scrutiny of trading, financing, and trading and low stock trading volumes due to the economic downturn have dried up private equity and venture capital, decimated stock market listings, and led to wage and employment cuts. .
After three years in the directionless capital markets, Xu Yuhe, a partner at Deep Water Fund Management, switched to the more predictable business of helping students study abroad.
The stock market may have soared recently on promises of economic stimulus, but investors are fickle and any bullishness is likely to be temporary, says a former hedge fund expert. said.
“Education services is a more tenacious business,” said Xu, capitalizing on the “growing trend of people studying and relocating to Hong Kong and Singapore” seeking international experiences in affluent, nearby and culturally similar locations. I am aiming to do that.
The $67 trillion financial sector is bearing the brunt of a range of initiatives, most notably the “Shared Prosperity” campaign launched in 2021 to close the gap between rich and poor through measures such as salary caps and the elimination of bonuses. The purpose is to
For example, the hedge fund industry is currently under pressure from regulators to crack down on computerized quantitative trading, saying it can treat retail investors unfairly.
Official data shows that campaigns to identify weak hedge fund operators have contributed thousands of times over the past year.
Many hedge funds didn’t even benefit from the record stock market rally because their data-driven strategies failed to predict unexpected policy shifts, leaving short positions at a loss.
Jason Tan, a Shanghai-based director at headhunter REForce Group, said the market support package was “a very short-term measure to win the hearts and minds of retail investors.”
“I have spoken to enough bankers…that they know that ‘common prosperity’ is here for good and that the days of well-paid banking jobs are over. and are starting to move toward less regulated industries.”
Salary limit
The $4.4 trillion mutual fund industry is also seeing “significant turnover” among fund executives and portfolio managers as companies focus on reviewing compensation and controlling costs, according to fund consultancy Z Ben Advisors. It is said that
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China Merchants Fund Management, one of the top 10 companies by assets under management, has asked executives to return salaries they received over the past five years that exceed the new “common prosperity” cap, Reuters reported. Reported last month.
In a report published in early September, Z-Ben said: “The range of remuneration caps that are introduced will influence whether there is more movement within the industry or whether key staff exit the fund management industry altogether. Probably.”
A former investment banker who quit his job and moved abroad last year said the arrests and detentions of bankers also represent an increased risk of doing business while compensation has been substantially reduced. That’s what it means.
A former investment banker said many state-run bank employees have restrictions on international travel in case authorities one day launch an investigation into a particular company.
bunker surplus
Partly to ensure that capital flows where the government wants it to go, namely into strategic areas such as semiconductors, opportunities for traders are also being created as regulators have significantly tightened the screening process for listing promising companies. Limited.
As a result, domestic listings have all but come to a standstill, with initial public offering transaction funding down 75% year-on-year in the first half of the year, according to KPMG data. Meanwhile, geopolitical tensions, especially between China and the United States, provide even more reason to oppose offshore listings.
Reflecting the redundancy among bankers, nearly half of the more than 8,000 registered IPO sponsors have not completed a single deal this year, according to China Securities Association records.
With these prospects in mind, Gu Zaifeng, a former Zheshang Securities veteran banker, applied to become a village secretary in rural Shandong province this year.
“Alumnus Gu gave up his high salary in Shanghai, from being an IPO sponsor to being a village secretary, and settled down at the grassroots level,” the Nanjing University Alumni Association said in a statement. Mr. Gu could not be reached for comment.
In the broader securities sector, the number of employees has fallen by nearly 15,000 since the end of 2022, a trend that is likely to continue as regulators push to consolidate the fragmented industry.
More investment banking jobs are expected to be cut as major securities brokers are likely to consolidate, following last week’s largest merger in industry history, analysts said.
Venture capitalist Wu Shichun said on a stand-up comedy show broadcast through his WeChat account in June, “Right now, everywhere in this industry, I meet desperate investors and entrepreneurs who are on the verge of life or death.” “I’m working on it,” he said.
“I’m grateful for these difficult times. It’s what fuels my performance,” said Wu, a founding partner at Plum Ventures and now best known as a comedian. .
(Reporting by Samuel Shen and Serena Lee; Editing by Sumeet Chatterjee and Christopher Cushing)
