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Stress takes its toll on fund managers

By Wang Bo (China Daily)
Updated: 2009-07-17 08:03

The intense work pressure and the high performance targets seem to be slowly taking the sheen off the high-profile fund managing business in the country, especially at a time when the capital markets have slowly emerged from hibernation.

The deaths of two top fund managers recently from health complications have trained the spotlight on the health hazards associated with the profession.

Industry sources admitted that the huge workload and the pressure on achieving better financial results have increased the stress levels for fund managers and forced many of them to push themselves beyond their limits.

Yang Jun, 44, president of Everyoung Capital Management Company and a doyen of the private fund management industry, died of liver cancer on June 22. A couple of weeks later Sun Yanqun, 41, chief investment officer at JP Morgan Asset Management's China fund venture, passed away from a digestive tract hemorrhage-induced shock.

Though no fingers are being pointed, industry insiders are of the view that the two fund managers paid the price for intense overwork over a prolonged period of time.

Though Sun had been suffering from stomach-related problems for some years, the extreme professional stress proved fatal, according to a long-time colleague at the fund venture between JP Morgan Asset Management and Shanghai International Trust.

"I usually work at least 60-70 hours a week and travel for work every half a month, which is quite common for fund managers," said a leading Beijing-based fund manager.

"Unlike others, there is no weekend for me, as I have to keep myself abreast with market developments and take investment decisions that can maximize returns for the fund and investors," he said.

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Highlighting the long work hours, an investment officer with a Shenzhen-based fund said he often got research notes from analysts late in the night. This in turn ensured that he had to spend long hours way into the night to analyze the gist of the reports to plan investment decisions.

Industry sources admit that cigarette addiction and sleep-related disorders are the main problems affecting most fund managers.

"Our daily schedule is extremely tight. Typically, I arrive at company at 7:30 am to check other countries' stock performance. Then I have to sum up the ideas for the morning session presentation," a fund manager at a Shenzhen-based fund company said.

"When the market opens at 9:30, I have to keep watching the stock movements and read hundreds of investment research reports piling up on my desk, and quite often cannot have my meals regularly," he said.

In sharp contrast to the typical nine-to-five routine of other financial professionals, like bankers, fund managers often have to sacrifice their sleep and food, making them more susceptible to liver or digestive disorders.

Fund managers have been gold-collar jobs that many people sought, especially when the fund investment industry started to blossom in 2007.

The mainland stock index peaked to an all-time high of 6,124 points in 2007 and many investors bought funds for quick returns. That in turn also opened up opportunities for many fund managers.

According to Chinese financial data provider Wind Info, there are around 60 fund companies in the mainland managing over 500 funds since fund investment was officially launched in China in 1997.

However, the strong tide for fund investment receded last year when the mainland stock index sank to as low as 1,664 in October.

According to the fund research center of Galaxy Securities, the average return on investment (RoI) of stock funds in 2008 was -50.63 percent, compared with 104.56 percent a year ago.

Fund managers are also under severe pressure to maintain the rankings of the funds they manage. With the financial performance ranking being published on a weekly and monthly basis, the pressure is all the more. Investors often base their investment decisions on these rankings and hence the pressure on fund managers to perform increases substantially, said a leading fund manager.

"Fund managers also face enormous pressure due to fund redemptions and complaints once its performance deteriorates," he said.