SWFs look to buy in asset management talent

GCC sovereign wealth funds are said to be eyeing up whole asset management firms as a source of talent. Are they really that desperate?

Apparently, yes. Mahmood El Sharkawy, asset management specialist at Pathway Resourcing, says asset managers are like "gold dust" in the GCC.

"Because of localisation requirements, nationals are the most sought after. However, the sophistication of European and US markets also makes asset managers from these regions very appealing," he says.

Last week, Dubai International Capital - the investment arm of Sheikh Mohammed bin Rashid Al Maktoum's Dubai Holdings - took a 9.9% stake in US hedge fund manager Och-Ziff Capital Management. The massive $875bn Abu Dhabi Investment Authority has also bought slices of private equity groups.

Rather like the spoilt rich kid with all the latest toys, it's now been suggested SWFs could add traditional asset managers to their shopping list.

Alex Patelis, head of international economics at Merrill, said in the Financial Times: "They have a lot of reserves that they have to manage but they don't have the skills they need to develop them. Investing in a stake in an asset manager will help them develop their own asset management abilities."

As Middle Eastern central banks pump more petro-dollars into SWFs they will become even more unwieldy, which will further drive the need for skilled asset managers. Merrill predicts that SWFs will have $7.9 trillion of AUM globally by 2011.

One headhunter says asset managers moving to the Gulf can expect to earn an average of 40% more than in Europe. Recruitment firm Morgan McKinley's latest salary survey says pay for fund managers in London starts at 61k.