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2013 Business Expense Benchmark Survey
Though APAC hedge funds have just over 10x
more compliance-related third-party charges than
U.S. hedge funds, this is a factor related to the
average AUM of the managers. Across our entire
U.S. dataset, the equal-weighted average AUM is
$4.2 billion, whereas that figure is only $413 million for
APAC managers.
Headcount intentions confirm that the regulatory
wave has crested earlier in the U.S., and that European
and APAC managers are still in a period of ramping
up their regulatory focus to align to global demands.
Chart 40 shows that 20%, or 1 in 5, EMEA- and APAC-
based hedge funds are looking to increase their
headcount in response to regulatory demands in the
coming year versus only 1 in 10 U.S.-based managers.
Adding legal and compliance personnel is expected
to account for the largest increase in headcount
across all three regions, with EMEA-based managers
attributing 27% of their increase to this function,
U.S. managers 34% and APAC hedge funds 45%.
Beyond this one area, there is more variance across
regions in terms of what functions managers are
looking to expand.
U.S. and European managers see growth in their
operations and technology headcount accounting
for 45% to 50% of their increase, whereas APAC
hedge fund managers only expect these functions
to account for 22% of their increased headcount.
By contrast, APAC managers are looking for growth
in their risk teams to account for 22% of headcount
growth, whereas that figure is only 7% to 8% across
the U.S. and EMEA.
Finally, EMEA managers plan on allocating 15% of
their increased headcount to marketing to handle
new regulatory mandates—a figure not much different
than the 13% expected by U.S. hedge funds and the
11% gain expected across APAC firms. These figures
are highlighted in Chart 41.
Chart 41: Regulation-Linked Headcount Increases by Function
Marketing
13%
Technology
13%
Operations/
Accounting
33%
Source: Citi Prime Finance. Total dataset examined (124 firms, $465 billion AUM)
AMERICAS
EMEA
APAC
Compliance/
Legal
34%
Marketing
15%
Technology
15%
Operations/
Accounting
35%
Compliance/
Legal
27%
Technology
11%
Operations/
Accounting
11%
Risk
22%
Compliance/
Legal
45%
Risk
8%
Marketing
11%
Risk
7%