BlackRock Asia-Pacific boss convinced brain drain is temporary

The Asia-Pacific head of the world’s largest asset manager, BlackRock, said she was confident an exodus of overseas talent was temporary and the region remained attractive despite border closures, lockdowns repeated events and political tensions.

Rachel Lord said that during the coronavirus pandemic there had been “much more stress in Asia for expats” and that had been a “catalyst for more moves”.

At the same time, due to border restrictions in Asian countries – which lasted much longer than those in the United States and Europe at the start of the pandemic – “we have not seen what is normally a flow incoming talent the way we would have done before”.

But she said in an interview for the Financial Times Future of Asset Management Asia conference that she was confident the situation would not last.

“I don’t think these are permanent conditions,” she said. “What I see at the moment are short-term responses to the pandemic that will unwind over the next year.”

New York-based BlackRock, which manages $10 billion in assets, and competitors such as Goldman Sachs Asset Management, JPMorgan Asset Management and Amundi, are all expanding in Asia, with growth in China being one of the fastest. of the region.

They were drawn to the opportunities presented by changes in China, such as its pension reforms despite geopolitical tensions with the United States and a broad corporate crackdown by President Xi Jinping that has led some investors to declare the country “ uninvestable”.

Global financial institutions in Hong Kong, which many use as a launch pad into China, have suffered an exodus of international and local staff over the past year as well as a slump in international recruitment. Many are gearing up for new releases this summer.

Hong Kong’s adherence to mainland China’s zero Covid strategy has resulted in lengthy hotel quarantines for residents returning to the city of one to three weeks, as well as punitive isolation periods for confirmed cases and their close contacts.

The territory’s borders have been mostly closed to business travel and tourism since the start of 2020, with Hong Kong only opening to non-residents in May.

Bank of America and Citigroup moved senior executives to Singapore, while banks like JPMorgan and Goldman Sachs allowed relocations to places like Australia, the UK and the US.

There has been a net departure of 136,000 people from the territory this year, equivalent to almost 2% of Hong Kong’s population of 7 million. Visa approvals for foreign professionals fell from more than 40,000 in 2019 to less than 14,000 in 2021, according to government data.

A Wall Street bank’s managing director for Asia said departures at senior levels in Hong Kong were double a normal year. “I counted the number of doctors who left and it’s a high percentage,” the executive said. “So we’re promoting internally and locally, which in many ways is a good thing, but you need international talent in an international financial centre.”

Lord said BlackRock’s senior management in Asia is dispersed across Hong Kong, China, Singapore, Australia and Tokyo. She dismissed the idea that there was a talent war between financial centres: “It’s a very fragmented region with very different opportunities and problems and things to think about.”

“As the borders open up, people will continue to be interested in coming to this region because . . . opportunities for growth,” she said.

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