Scottish fund managers are building out their property teams

In recent months, in line with other firms in the UK, asset management recruitment north of the border has slowed down. There are, however, signs that larger firms in Scotland are looking to increase their real estate teams.

This week, Kames Capital - the newly-rebranded asset management arm of Aegon, with nearly 250 people employed in Edinburgh - said that it had hired three people for its property fund management team. Mark Bunney, Matt Day and Tony Yu have joined from ING REIM.

The move is part of Kames Capital's plans to build out its third-party business (ie, non-Aegon) in property, fixed income, UK equity and multi-asset investment.

It's not the only firm north of the border hiring property fund management expertise. Earlier this month, Scottish Widows Investment Partnership (SWIP) - which has been a prolific recruiter this year - added five new investment managers to its real estate team.

Oliver Lord, Elaine Hughes, Nicola Campbell, Tom Elviss and Veronica Gallo-Alvarez all joined the Edinburgh-based team this month.

Both firms have reasonably obvious reasons for wanting to build their teams in this area. SWIP took on an extra 2.4bn in real estate assets from the insurance division of its parent company Lloyds Banking Group in May, for example.

Meanwhile, Kames Capital has taken to opportunity to poach managers who, according to its property fund management head Phil Clark, are "among the leaders in the property funds of funds market" as it looks to expand its indirect property investment activity.

Nonetheless, asset management headhunters in Scotland suggest that it's an area where a number of firms are talking about hiring.

"We've had some enquiries about potential positions within property funds recently and there's a definite appetite to recruit there," says Graeme Knox, director of fund management headhunters Knox Consultancy. "There's a feeling that there are some interesting distressed investments currently, particularly in places like Ireland."

A recent note by George Shaw, who manages the UK property fund at Glasgow-based Ignis Asset Management, said that the current consensus for real estate returns (6.7%, according to the PMA) is too low, and that 8.7% in 2011 is more likely. Office space will be the best performing sector over the next three years, he claims.