GUEST COMMENT: Why you would be mad to work for a sovereign wealth fund
With job cuts being rolled out across the financial sector, many professionals are eyeing opportunities at large sovereign wealth funds, which are recruiting heavily, particularly in the Middle East. In my experience, however, it would be like signing up to the civil service.
In my eyes you would be mad to take a role at one of the large SWFs in the region – they are huge, unwieldy behemoths, where the decision-making process is arduous and wealth continues to expand regardless of their investment strategies.
Longevity is not common within sovereign wealth funds and the changing of the guard every two to five years is reflective of the fact that investment performance continues to disappoint. In fairness, it’s difficult to make your mark, since every decision has to go through a committee of people and personal responsibility is heavily diluted. SWFs insist that they want star performers – the pick of what the international financial sector has to offer – yet these people are given little opportunity to shine.
Take the recruitment process; instead of line managers being empowered to form their own teams, a committee needs to interview any potential recruit. This is a long process – even compared to investment banks which are drawing out recruitment decisions – and getting everyone involved to agree on a candidate can take a very long time indeed.
All in all there’s a dusty feel of a government institution.
Because so many people are involved in the recruitment process, the credentials of potential recruit have to be made simple from the beginning. This means big brand names on the CV, whether that’s employers or schools, and MBAs and CFAs are given highest billing.
So, what sort of person is suited to a SWF? Usually a meek, well-qualified individual who’s prepared to compromise on prestige and pay. Maybe, since big bonuses have become a thing of the past, SWFs have become more competitive on pay, but generally you should expect a cut – again, this comes back to the public sector mentality.
The world will chase you for business, but since there’s little individual responsibility no one has much business to give. It is almost impossible to get an appointment to meet the so-called fund managers at Gulf SWFs, simply because they are so over visited by outside managers.
If you’re a humble person with top quality qualifications looking for a change of pace, by all means apply to a sovereign wealth fund. Otherwise, steer clear.
Robert Moxon a private equity veteran in Bahrain and and has been working in the Middle East since the mid-1990s. He has held a range of private equity and fund management positions in Saudi Arabia, Bahrain and London.