1 year of silence!

Fund managers are restricted from "public and private"!

The tide of resignation is heating up, and some companies have only one "single seedling" left

  A few days ago, the China Securities Regulatory Commission issued the Measures for the Supervision and Administration of Managers of Publicly Offered Securities Investment Funds and its supporting rules.

Among them, two rules directly refer to the "public and private" of fund managers.

  Since the beginning of this year, the tide of leaving public funds is still heating up. Some small fund companies even have only one "single seedling" left after the frequent departure of investment and research personnel, and there is a phenomenon of "one person supporting the whole company".

Constrained frequent job-hopping

  The "Measures" stipulate that public fund managers establish a silent period system for employees to leave, and fund managers and other major investment and research personnel shall not engage in non-public fund investment management and other work within one year after leaving.

  This means that a one-year quiet period is required for fund managers to "run privately".

  Industry insiders said that this regulation forms a strong constraint on fund managers to change jobs, which is conducive to the stability of the industry's talent echelon.

"The one-year quiet period will bring many variables to the resignation personnel, and fund managers will be more cautious when changing jobs." Li Cheng (pseudonym), a public fundraiser in Beijing, said.

  In addition to the silent period, the "Measures" also restrict the flow of fund managers through the salary system.

The "Measures" stipulate that public fund managers should establish and implement systems such as deferred payment of remuneration and recourse and deduction. For example, the period of deferred payment shall not be less than 3 years, and the payment shall be deferred to senior management personnel, fund managers and other key personnel. The amount is not less than 40% in principle.

In addition, the relevant provisions of the recourse and rebate system are also applicable to resigned employees.

  In this regard, Li Cheng believes that the system of salary deferred payment and recourse deduction is conducive to curbing excessive market competition.

"In the fund industry, in addition to public fund companies, there is also talent competition between public and private placements. For star fund managers, the private placement's compensation system is more flexible and unrestricted, so many star fund managers go to private placement after leaving their jobs. One regulation has created a relatively large constraint on star fund managers' 'public and private'."

  However, he also said that the basis for recourse and deduction in the "Measures" is defined as "the relevant personnel fail to perform their duties diligently and are responsible for the violation of laws and regulations or business risks of the public fund manager", and they are responsible for business risks. The standards of liability are not further elaborated, and it will be difficult for fund managers to protect their rights if fund companies abuse the standards in their enforcement.

Some companies have only one "single seedling" left

  With the development of the public fund industry, the flow of fund managers has also accelerated.

Wind data shows that in 2021, the number of fund managers leaving the company will hit a record high, with 323 people leaving for the year.

The number of fund managers who have resigned since the beginning of this year has increased by 10 compared with the same period last year. As of May 24, a total of 108 fund managers have resigned from the 177 public funds.

In addition, a total of 199 new fund managers were hired.

  The differentiation of talents has also intensified.

Wind data shows that top fund companies such as E Fund, China Asset Management, GF Fund, Wells Fargo Fund, China Merchants Fund and other top fund companies have more than 60 fund managers.

In contrast, some small fund companies even have only one fund manager.

  On May 20, Yimin Fund issued an announcement that fund manager Niu Yongtao resigned due to personal reasons.

After Niu Yongtao left, Yimin Fund had only one fund manager, Zhao Ruoqiong, who managed all 6 products of the company.

As an established fund company that has been established for more than 16 years, Yimin Fund has experienced rectification storms and frequent personnel departures. As of the first quarter of 2022, the management scale of Yimin Fund is only 1.228 billion yuan.

  There is more than one fund company with only one "single seedling".

Wind data shows that as of May 24, 7 companies including Yimin Fund, Mingya Fund, Yimi Fund, and Ruida Fund have only one fund manager.

Among them, Mingya Fund, Yimi Fund, Ruida Fund, etc., the management scale of public funds is even less than 200 million yuan.

(Zhang Shulin)