macdonald and company
macdonald and company

Make The Leap To Buy-Side Investment Analyst in Asia

Posting date: 26 February 2019
William Glover our consultant managing the role

High Demand For Young Talent In Asia’s Real Estate Fund Managers 

Investment analyst jobs on the buy-side can be difficult to secure for those who have been employed in a sell-side environment, especially in real estate. However, the current market climate is highly conducive to making the switch. There is a growing number of investment analyst jobs becoming available at big names and hedge funds, particularly in the Asian markets of Hong Kong and Singapore: exciting opportunities for ambitious people with the right mix of experience and knowledge. With the right guidance, a profitable career move to the buy side is more than possible. 

Why move to buy side 

There are many similarities between the sell side and the buy side of real estate investment analysis.  
The skill set you have built working at an investment bank is an asset readily transferrable to a position within an asset manager, institutional investor or hedge fund. Right now, and throughout 2019 and moving into 2020, these employers are keen to hire analytical and investment expertise, as they seek to source, assess and invest their capital in profitable real estate opportunities. 

Despite the similarities, you’ll find working on the buy side a different, often liberating experience. You are the one with the money on the table. It’s rewarding work, in an environment where your contribution is measured, performance valued, and your compensation trajectory is steeper. 

Consider A Career Move Now

It appears that growth in the global economy is slowing. Certainly, the evidence suggests so: 
In Europe, the most recent GDP releases show the Eurozone is barley growing, with Germany stagnating at best and Italy in recession 

Data from the United States shows that there has been a slide in consumer spending and that there are a record seven million people three months or more behind on their auto loan repayments 

At the end of January, the IMF reduced its forecast for global growth to 3.5% and 3.6% in 2019 and 2020. It cited a difficult environment that includes threats from geopolitical concerns, Brexit, and the trade war between the United States and China. Among its regional forecast, the IMF predicts that: 

  • United States growth will slow from 2.5% this year to 1.8% in 2020 
  • Growth in the Eurozone will slip to 1.6% in 2019 
  • China will grow its economy by 6.2% in 2019 and 2020 
  • The ASEAN-5 group will grow at 5.1% in 2019 and then 5.2% in 2020 
In a slowing economy, you could ask if it wouldn’t be better to put your career aspirations on hold. However, as the above IMF forecasts prove, the global economy is not symmetrical. Asia and the emerging and developing economies will continue to be the engine of global economic growth. This encourages business investment, and this prompts investment in real estate – the kind of investment that creates demand for sell-side talent to transfer to the buy side. 

Why Consider Singapore or Hong Kong For Investment Jobs? 

Investment in real estate is growing in the Asian region and is set to continue to do so. The latest investment surveys and research from ANREV and JLL conclude that more than half of institutional investors intend to increase their allocation to real estate in Asia over the next two years, and that real estate transaction volumes will increase by 5% this year. Hong Kong and Singapore are centres in which much of this investment is likely to pivot. Therefore, we expect demand for experience and expertise to be highest here. 

Asia + Non-Listed Vehicles Set To Be Big Real Estate Winners 

The latest Investment Intentions Survey of Institutional Investors published by ANREV, INREV, and PREA in January 2019 concludes that institutions are extremely bullish of the real estate market, and particularly for real estate in Asia. 

Real estate investment intentions are booming 

Around 57% of institutional investors globally intend to increase their allocation to real estate in the Asia-Pacific region over the next two years. European investors are most bullish, with 69% signalling their intention to increase their allocations to real estate. 

Global investors expect to invest a minimum of around US$73 billion in new capital into real estate in 2019. This is a 35% increase on the US$53.8 billion of new capital committed in 2018. Of this new capital, around US$45 billion will be invested in non-listed vehicles. 

  • Asia-Pacific investors are confident about the prospects for real estate
  • 40% intending to increase allocations from their current 10% average
  • 8 out of 10 large institutional investors with assets under management intend to increase allocations
  • Most Asia-Pacific investors say they will invest in core strategies. 
In terms of sector, of the investors surveyed: 
  • 100% intend to invest in offices in Asia-Pacific 
  • 81% intend to invest in industrial and logistic 
  • 64% intend to invest in retail 
Amélie Delaunay, ANREV’s director of research and professional standards said: 
“This year’s survey highlights some interesting themes, with a clear trend of investors diversifying globally and building up their portfolio in Asia-Pacific. The appeal of the core market remains undiminished, particularly among Asia-Pacific investors. Despite pricing issues, investors clearly feel the benefit of these mature and liquid markets, where it is easier to invest. 

“On the other hand, we can see them moving up the risk curve, and looking for more riskier types of investments such as value added and opportunistic strategies.” 

Key drivers of real estate investment in Asia 

In the early part of January, JLL said that it expects real estate transaction volumes in the Asia-Pacific region to grow by 5% in 2019. This growth will be spurred by strong demographic and business fundamentals, with Asia-Pacific’s ecommerce sector growing to US$1.6 trillion by 2021. The drivers identified by JLL are: 

Growth In ‘Living’ Assets 

An increasing urban population will fuel demand for residential property, including alternative accommodation such as co-living, multi-family, aged care, and student accommodation. 

Building Flexible Spaces Attracting Talent 

Co-working offices, shared workspaces and serviced office space are likely to be in higher demand, with as much as 30% of corporate commercial property portfolios dedicated to flexible workspaces. 

Rise Of Logistics & Data Centres 

As Asia-Pacific grows its ecommerce sector, the demand for data storage and warehousing facilities will increase. JLL expects ‘significant capital’ to target markets like China, Indonesia and India, while major logistics hubs in major cities will continue to grow. 

Shift Toward Debt Exposure 

JLL expects non-bank and off-shore lenders to enter the market, offering flexible debt and equity arrangements on select projects. Institutions are also expanding their exposure to real estate debt, using it to mitigate exposure to market volatility and falling income from property. 

Evolution Of Smart Cities 

Across Asia, smart city initiatives are forging ahead. Smart property development in cities will enable ‘more liveable environments for their growing populations’. 

Summing up the latest research and current market for investment analyst jobs, MacDonald & Company’s Managing Director Asia Pacific, Will Glover, says, “Ten years after the GFC and Great Recession, institutional investors find themselves with other concerns. Geopolitical risks have increased, and there is economic uncertainty caused by issues such as Brexit and international trade tensions. 

“In this environment, real estate looks increasingly attractive as an investment asset. It has the potential to produce higher returns, steady and growing income, and has diversification benefits for portfolio funds. To take advantage of this attractiveness, the buy side is beefing up its capabilities, and this is creating some extremely exciting opportunities for talented individuals to switch from the sell side and make a step-change in their career.” 

How To Prepare For Buy Side Investment Jobs

Making the switch from the sell side to the buy side is not without its challenges. Understanding what your challenges are likely to be will help you prepare yourself for your new role and be successful in it. Here is our advice: 

Consider Your Move Carefully 

What is your motivation for the move? Is it that you have lost the drive for your current role, or is there a deeper reason? 
If your reason to move is purely money motivated, then you may need to reconsider your career path entirely. Real success comes from working in an environment in which you are engaged with the people surrounding you and the work you are doing. Of course, the remuneration trajectory will be a factor in your thoughts, but it shouldn’t be the sole foundation on which you base your career decision. 

Ensure Company’s Philosophy Aligns With Your Own 

It is vital that you ensure your philosophy aligns with that of your proposed employer. If your values don’t match, your new position is likely to be a less than satisfying experience.  

Consider Changes To Work/Life Balance

Values are not limited to professional ethics, strategies, methods and working practices. You should also consider the working practices of your target employer that may alter your work/life balance. 

Especially when working on large or time-sensitive investment deals, an analyst at a buy-side organisation may need to put in late nights and early mornings. This may not be typical, but you may need to be available out of hours more often than in your current position. 

You May Have To ‘Multi-task’ 

In larger investment banks, your role is likely to be very clearly defined and specialised. If you are moving to a smaller organisation, you may need to do more of the subordinate work and become involved in other tasks. This may come as a shock if you haven’t had to do this in your current role. 

Be Prepared For Culture Shock 

Consider what you like most about your current working environment. If it is the buzz of being surrounded by a large team, you may be disappointed in your new surroundings in which you are working with a smaller, more focused team. Dress code may be different, too. This cultural shift can be difficult, so ensure you understand the differences that may occur. 

How Switch To Buy Side 

Leaving a large bank and finding a role in real estate private equity is a daunting task, and most candidates are only familiar with the biggest managers. It’s worth getting professional advice about the entire market as you might be missing a more suitable, interesting and lucrative option. 

Your breadth of skills will be attractive to employers, but it is imperative that you consider your motivations for moving, the type of organisation with whom you wish to work, and the team that you will be working with. If you choose the right team, with a strategy that matches your experience and expertise, and the philosophy and values that align with your own, your move will achieve its promise and more. 

For a confidential conversation to explore the current market and discuss your next career move, contact Macdonald & Company – connect with us on LinkedIn and search for your next investment analyst role now. 
Make The Leap To Buy-Side Investment Analyst in Asia

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