The Funds Partnership Asia’s Salary Guide 2019 : Fund Administration & Asset Servicing

18 Jun 2019

OVERVIEW

The uptick in demand for fund administrators began in 2015 and today, the industry’s growth as a whole has made working in a fund administrator equally competitive to working in any other buy-side opportunity. The evolution and progression of fund administrators is tremendous over the last few years; focusing on a wide array of asset classes, developing cutting-edge technologies and being centres of excellence for many fund managers.
Beyond competitive compensation and benefits, fund administrators’ exposure to a wide array of asset classes give employees even more opportunities to get familiar with the various investment strategies implemented by the investment management firms.
In this report, we would like to share the prospects of this market through the compilation of our data and analysing which asset classes are popular, the locations that more fund administrators are investing in and future developments of the industry.

We have covered the following topics in this article:

  • Types of Investments

  • Roles & Seniority

  • Salary Variations by Asset Class

  • Location

  • Fund Administration Industry (Hong Kong)

  • Fund Administration Industry (Singapore)

  • Investor Relations & Transfer Agency

  • Investor Relations & Transfer Agency (Hong Kong)

  • Investor Relations & Transfer Agency (Singapore)

  • Future Developments

Types of Investments

EVestment (2018) alternative fund administration 2018 report mentioned that the global assets under administration (AUA) is USD 8.42 Trillion. However, for the purpose of this report, we will focus on the trends within the alternative investment fund administrators in APAC.

Roles & Seniority

As each firm’s internal structures differ, we have defined the typical organisational hierarchy for the purpose of this salary guide:

  1. Graduate Fund Accountant / Transfer Agent (0 years)
  2. Fund Accountant / Transfer Agent (1 – 3 years)
  3. Senior Fund Accountant (3 – 5 years)
  4. Team leader/ Supervisor / Assistant Manager (5 – 8 years)
  5. Manager / Assistant Vice President (AVP) (7 – 9 years)
  6. Senior Manager/ Vice President (VP) / Assistant Director (AD) (8 – 12 years)
  7. Director / Senior Vice President (SVP) (12 – 15 years)
  8. Managing Director (Above 15 years)

Salary Variations by Asset Class

This report defines an asset class as a group of investments that displays similar attributes and are governed by the same laws and regulations. The trend for alternative investments (Private Equity funds in particular) are becoming increasingly popular compared to traditional investments.

The salary levels of mutual fund accounting professionals have not increased as fund administrators have begun outsourcing most of their back-office functions to cheaper jurisdictions. However, the salaries of fund accountants specialising in Private Equity (PE) or Hedge Fund (HF) investments have been increasing at a slow and steady rate. As the work for alternative investments are more demanding and complex and requires more interaction with client, this has not been outsourced as aggressively.

Between PE funds and hedge funds, salary levels of PE fund accountants surpasses that of HF accountants due to additional accounting certifications required. In terms of volume, the hiring demand for HF accountants is still robust, however the demand for PE fund accountants is at an all-time high, as private equity (and especially real estate) as an asset class is gaining traction with investors.

As the candidate pool for PE fund accountants is limited, many fund administrators also consider other alternatives when it comes to hiring.
On top of candidates with direct relevant experience in PE fund accounting, most hiring managers have also been open to candidates coming from audit or corporate accounting backgrounds, with or without fund exposure.

Locations

We noticed that mandarin speakers are also high-in-demand. China has been rapidly growing in wealth over the last few years, and mandarin is often times required to liaise with local investors.

With Hong Kong’s proximity to China and Singapore’s recent introduction of the Singapore Variable Capital Company (VCC) Act (which encourages fund managers to domicile their funds in Singapore by improving operational and tax efficiency), we are certain that the fund administration industry will definitely continue to grow within Asia in the years to come.

In general, the salary difference for entry level positions between Singapore and Hong Kong is not too different (Singapore’s entry level salaries are sometimes slightly higher). However, with more experience, Hong Kong salary scales seem to increase at a faster rate than in Singapore.

Fund Administration Industry (Hong Kong)

Salaries quoted in thousands, per annum, Hong Kong Dollars

Fund Administration Industry (Singapore)

Salaries quoted in thousands, per annum, Singapore Dollars

Investor Relations & Transfer Agency

Today, more fund managers and distributors are acknowledging the fact that the transfer agency (TA) element is key to leaving a positive note on the fund’s investors. With that, the demands for fully-fledged TA capabilities from the administrators to address regional or global mandates record-keeping needs across the different asset-classes spectrum has also increased. Coupled with the increased complexity contributed by legal constraints, changes to the existing regulatory framework, etc, thus makes TA an indispensable function in any fund administrator.

With the growth of cutting-edge technologies, an increasing number of processes are automated, allowing TA professionals to concentrate on client servicing, accounts opening, transaction processing and investor reporting.

In 2018, we have seen a marginal increase in demand for TA talent and this will continue to mature through 2019.

The requisites for TA talents now heavily focus on communications skills and prior KYC and/ or AML knowledge.

Investor Relations & Transfer Agency (Hong Kong)

 

Salaries quoted in thousands, per annum, Hong Kong Dollars

Investor Relations & Transfer Agency (Singapore)

Salaries quoted in thousands, per annum, Singapore Dollars

Future Developments

We have also noticed that many offshore law firms are building up their very own fund administration team to expand their existing services range.
With that, the corporate services and fiduciary firms are also following suit. With consolidation in the industry at an all-time high in the recent 24 months to achieve higher valuation, we noticed that this has created uncertainty amongst candidates – some of whom lose their jobs due to the acquisitions.

As such, some have moved out and started their own business which results in the industry becoming less service-oriented and more transactional.

Read the pdf version of the Funds Partnership Asia’s Salary Guide for Fund Administration and Asset Servicing here: Funds Partnership Asia Salary Guide 2019_Fund Administration & Asset Servicing