Salary survey: Mixed messages for fund managers
The downturn in the job market has caught up with fund managers with a vengeance. After remaining buoyant for much of last year when other sectors were suffering, fund management has now had its share of layoffs and falling bonuses.
A pay survey by the Monks Partnership shows a mixed picture, however. Pay has certainly fallen significantly from a year ago in a number of key positions, with typical packages for heads of equity fund management slumping from 170,000 a year ago to 145,000. For those in the upper quartile of the pay scale, the decline was steeper - from 214,000 to 159,000.
For some other positions the survey of small and medium-sized firms was more encouraging. Total packages of equity fund assistant directors and equities fund managers were little changed. At the top level many heads of fund management were also holding their own. Average packages for those in the median pay quartile rose substantially, the survey shows.
The figures, compiled in February, may not fully reflect the continuing severity of the downturn. But headhunters point to several rays of light at fund management firms.
A few have chosen to beef up some operations while markets are weak, including Gartmore, which made the high-profile hiring of Steen Steincke as head of global bancassurance earlier this year, as well as bringing in other business development executives. HBOS has also been looking for talent.
Karen Barnick, head of European asset management at Whitehead Mann, said other firms too were looking to fill business development roles. "There's still demand for institutional marketing positions and third party sales and sub-advisory roles," she said.
Demand for 'manufacturing', or money management, roles tended to be weaker. "When financial markets are slow, firms often see the relationship side of their business as key," Barnick said. But after a couple of years of declining portfolios, star fund managers who could turn a fund's fortunes around were also much sought after.
Russell Adam, of the headhunter Adam Grant, said alternative investments were still a growth area in both traditional fund management firms and hedge funds, particularly in sales and marketing roles.
Some equities staff with regional expertise, about Latin America for example, were also finding they could transfer their skills successfully to global equity teams, Adam said.
But across the board the job market was still weak, partly because some firms were consolidating their retail, institutional and private client work in order to cut costs. Adam said fund management firms attached to investment banks were among those suffering the most, as the bank as a whole often faced financial difficulties.
The Monks survey also showed that the best paid quartile of directors of private client portfolio management have enjoyed steep pay increases, from a total package of 176,000 in February last year to 248,000 this year.
Adam said the rise could reflect the ability of many of the top performers to take clients with them if they left. This increased their value to their firm, and put them in a strong bargaining position at bonus time.
Pay for directors of private client portfolio management in the median quartile was also up, but to a much lesser extent, reflecting the more limited value that they offer to their companies. Other private client roles in the survey showed little change in their packages.
