Investment oracles required

A new study suggests UK pension fund trustees are ill-equipped to make investment decisions. Little surprise therefore, that the consultants advising them are adding staff.

The Oxford University study, reported yesterday on Investment & Pensions Europe, found the average UK pension fund trustee lacks both education and professional qualifications. The launch of the findings coincided with estimates from Aon Consulting that pension deficits at UK companies with the largest defined benefits schemes reached a record high of 76bn in January following falls in long-dated gilts and bond yields.

Pension funds' difficulties would seem to suggest opportunities for investment consultants, and firms do indeed appear to be hiring. Ian McKinlay, head of investment consulting at Aon in London, told eFinancialCareers that the firm has plans to expand its 40 strong investment division in the coming months due to growth in its business. "We are looking overall at our resources and it's pretty certain that we'll need more," he says. "But it's impossible to be definitive with numbers at the moment."

Dev Majithia, manager of the investment management team at recruitment firm Joslin Rowe, confirms consultants' hiring is on the increase. "Consultants are hiring to replace people that have been lost to multi-managers and funds of hedge funds," he says. "They are also adding staff as funds under management rise."

Favoured candidates have fund auditing, performance analysis, or fund rating experience, says Majithia. They also benefit from familiarity with quantitative methods and programmes such as Visual Basic.

France: consultants enter the equation

If UK investment consultants are adding staff to replace people who've left for fund of funds and advise inept pension fund trustees, French consultants look set to add staff simply because their services are suddenly being used a lot more than before.

Investment and Pensions Europe also reports on a new study by bfinance, a financial services consultancy, which found that the volume of pension mandates put out to tender in France doubled year on year between 2004 and 2005, and that assets are increasingly invested in diverse global securities, creating growing demand for investment consultants.

Only 50% of French investors currently use consultants to select fund managers.