Scots fund managers showing signs of strain
When it comes to hiring, Scotland's investment managers have been relatively bullish throughout this year, but recent redundancies and poor fund performance suggest that cracks are beginning to show.
On the face of it, Scottish fund managers are still open to taking people on. Standard Life Investments (SLI) recruited Andrew Millington as investor director for UK equities from Baillie Gifford in September.
Meanwhile, Baillie Gifford itself added three to its own fixed income team in September, as well as swiping three US equities managers from Edinburgh rival Scottish Widows Partnership. Headhunters tell us Baillie Gifford is keeping future recruitment plans close to its chest, after seeing its assets under management plunge from 55bn last year to 38bn.
A rapidly changing picture
Martin Currie chopped 19 jobs in mid-September as a result of "continued deterioration" in financial markets. Just two months earlier it had claimed to be in expansion mode, which shows how rapidly the picture can change.
Similarly, SLI was waxing lyrical about its 2007 performance at the beginning of this month, saying it had added 33 to its team over the course of the year. Yesterday, however, three of its funds were among data provider Financial Express's 10 underperforming UK funds, having lost around 40% of their value. Edinburgh-based SVM Asset Management's UK opportunities fund was in third place in the table.
Ben Yearsley, investment manager at Hargreaves Lansdown, says: "Standard Life has a huge weighting to the banks - especially RBS - so I'm not surprised by that at all."
Look to the long term
SLI investment director Claire Marshall says people should not make judgements on short-term volatility and instead focus on long-term performance.
Gordon Montgomery, director of the financial services practice at Harvey Nash Executive Search, says the Scottish fund management industry is, like everything else, "in a state of flux".
"It is certainly not a sector in crisis, but one making quiet adjustments which for the foreseeable future will lead to general downsizing and only important, strategic hiring," he says.
Joanna Black, partner at headhunters Black Appointments, adds: "I think a lot of companies will be attempting to save face and clear out people who are not performing, or who have made bad decisions. But fund management firms will continue vying for the best people, regardless of the economic climate."
