Global Sage has entered an equity alliance with Bo Le Associates, in a move that both companies hope will lead to the creation of an Asian-based executive search firm that can operate on a global platform.
Bo Le approached Global Sage “indirectly” through a third party about six months ago and has now taken a “significant”, but undisclosed equity stake, according to John Wright, chief executive officer of Global Sage, last week.
Both firms have their headquarters in Hong Kong, are privately held and will continue to be managed and operated independently. The strategic partnership has offices extending from Johannesburg to London and New York, and a presence in 24 cities across the Asia-Pacific region, employing more than 550 people.
“This will be the decade that an Asia-based search firm can seriously challenge the big five global recruitment consultancies,” said Louisa Wong, founder and executive chairman of Bo Le. “In alliance, Bo Le and Global Sage are confident that we are well-placed to be that firm.”
Wong confirmed that the two companies will remain separate operationally. Cooperation will happen through sharing and rationalising back-office functions, not databases.
“Client confidentiality is important, although Bo Le hopes to work with Global Sage people in London and New York to expand its business,” she told FinanceAsia. “There is tremendous synergy with our alliance. Global Sage has strong contacts within financial services, but we only earn around 25% of our revenues from that sector. And our main focus is on retail and corporate banking; Global Sage is strong in investment banking and fund management. We have an extensive regional footprint and dominate in both China and Indonesia markets, while Global Sage has a significant global platform with concentration in London and New York City.”
The partnership should also help the international ambitions of Global Sage and Wright, who set up the company during the Asian financial crisis in the late 1990s.
“Global Sage has huge ambitions to build on its achievements since its establishment in 1998 to become the leading Asia-based global recruitment firm,” he said. “The alliance with Bo Le is a further step towards reaching that goal, helping us break into large markets like China and Indonesia where Bo Le dominates. At the same time it creates an opportunity for our Asian clients looking to expand either into traditional markets such as Europe and North America or the fast emerging economies of the Middle East, Africa and South America.”
Wright argued that the financial industry no longer functions on the old hub-and-spoke model, which was characterised by large international institutions based in New York or London, with satellite offices in Asia and other regions. Instead, the industry is moving in-country: emerging nations are rapidly developing their own large, sophisticated financial sectors, and these are the drivers of staffing decisions for all financial concerns, whether domestic institutions or global ones.
Of course, it is also a time of general contraction in the financial industry, as leading international banks slash jobs and withdraw from some sectors. But Wright has experienced the wrong end of the business cycle before. “We were born during the Asian currency crisis, and we know how to become stronger during periods of intense change,” he said.
On the other hand, the structural position of the Asian market looks healthy. George McFerran, head of Asia-Pacific at eFinancialCareers, a web-based careers network for professionals working in the financial services industry, noted that there was a significant downturn in job postings at the beginning of 2009, followed by a recovery around the middle of that year, a steep rise at the start of 2011 and then a steady decline.
“Our Asian clients tell us that they intend to hold back on hiring during the next 12 months. Instead, they will replace staff internally, focus on re-training and allow natural wastage to take place,” he said. “But, they expect their businesses to expand, concurrent with economic growth throughout the region. So, looking ahead, the market for financial services staff [in the region] looks very healthy.”
Global Sage recently opened an office in Singapore, plans to set up in Mumbai, and has added staff in Hong Kong, London, and Seoul.
“In the current market conditions, size definitely matters. Now, when other recruitment firms might be contracting, we see an opportunity to expand,” said Wright.