Salary survey: Fund managers pay slumps, but niche hiring continues

Headhunters say vacancies occur most frequently in the credit sector. Examples of recent hires include Fidelity Investments, one of the world's biggest firms, adding four credit analysts to its London fixed income team since January.

Schroders has strengthened its global credit analysis team and said last month it aims to bring in further staff.

Sam Donald at the search firm Shepherd Little, said demand for credit staff was likely to remain high.

Kathryn Melrose, at search firm Drayton Finch, said: 'Buy-side firms are building independent teams of analysts after the sell-side research scandals'.

Credit staff have benefited at the expense of equities experts in the three-year downturn in share prices. Though stock markets have perked up in recent weeks, a prolonged rally would be needed before firms hire droves of new equities staff.

Recruiters also identified the fund of funds market, especially hedge funds of funds, as taking on new staff. Schroders launched its second private equity fund of funds and a third fund of hedge funds in May.

Alex.Brown at Drayton Finch said there was strong demand for ex-fund managers and analysts who could select the best performing funds, and who knew the tricks of the trade.

Niche areas of hiring can be identified from job advertisements. In the past month there have been plenty of adverts for credit analysts to work on the buyside, as well as sales positions in hedge funds of funds and analysts to work in the multi-manager sector.

Shepherd Little has advertised for a credit analyst with a CFA or MBA qualification on a base salary of 60,000.

Brown said a chief investment officer at a hedge fund of funds could earn a total package of between 200,000 and 500,000. A junior fund analyst could expect a salary of 40,000 to 50,000, depending upon experience, while more senior analysts could expect a salary of up to 80,000.

Some headhunters detect a gleam of light in the overall fund management job market. Petra Rickmeyer, at the search firm Hogett Bowers, said she believed firms had now made the bulk of their redundancies.

Merrill Lynch Investment Managers, Schroder Investment Management, Putnam and Vanguard, have all made wide ranging cuts during the past year, many of them in equities related positions.

Rickmeyer said some fund managers had recently been hiring in the equities market. Examples include Schroders hiring John Hammond as a property equity analyst in early May, First State investment hiring two analysts for its global equities team in April and Paris-based CDC Ixis Asset Management hiring a new head of European equities in March.

The overall picture remains gloomy. A survey by Monks, a remuneration consultancy, found that average bonuses of heads of fund management in London fell by 80% in 2002 - to 16,000, from 81,000 in 2001.

Several senior staff have been casualties in recent weeks as firms cut costs, including Citigroup, Deutsche Bank and Baring Asset Management.