What's stopping Standard Life Investments from expanding?

In theory, Standard Life Investments (SLI) should be offering plenty of recruitment opportunities this year - on the back of record assets under management of 71.6bn - but overall group cost-cutting makes significant hiring plans seem unlikely.

SLI has been recruiting in 2010, with headcount increasing by nearly 100 to stand at 880 at the end of last year.

Much of this is down to an increase in third-party assets under management, which swelled by 26% largely due to strong demand for its fixed interest products and global absolute return strategies fund.

But it's questionable just how much of this hiring has been in the front office - current vacancies at SLI centre around risk, technology and change management, and asset management headhunters in Scotland suggest there's little appetite to recruit portfolio managers.

Part of the problem is that, despite positive results at a group level (profits increased 6.5% to 425m), Standard Life has been cutting costs. In September it announced plans to cut 100 contractor and 500 permanent roles, 480 of which would be in Edinburgh.

Sources suggest that people working in operational functions - such as finance, HR and IT - as well as back office roles have been transferred internally from Standard Life to SLI.

"The feeling is that the transformation is still underway, and it's going next year before any significant hiring takes place," says one headhunter, who declined to be named.

This is in spite of another 200m investment this year to help Standard Life transform itself into a higher growth technology and asset management business.

SLI declined to comment on its recruitment plans.