If senior investment bankers have taken a role in a sovereign wealth fund, it has typically involved a move to what would be considered a hardship destination, working for a stable yet bureaucratic institution where a public sector mentality prevails.
But what if you could have the job security and stay in a more established financial centre? This week it emerged that the Kuwait Investment Authority has been hiring senior bankers – in London. Hakim Drissi-Kaitouni and Marc Keller, former Bank of America Merrill Lynch investment bankers, joined the London division of the KIA, Wren House Infrastructure Investment Management, in August, according to Financial News.
Meanwhile, Heinz Pley, a former managing director in Morgan Stanley’s mining investment banking division, joined Abu Dhabi SWF Mubadala as associate director of mining and business development in August. His LinkedIn profile lists his location as being in London.
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SWFs have a desire to attract investment bankers with bulge bracket experience, but have struggled. Much of this has been down to pay – with bonuses and carried interest a rarity and base salaries lower than the private sector, both recruiting and retaining senior financial professionals is an ongoing challenge, according to a recent study by NMG Consulting.
While some SWFs are building their UK arms, there’s also an increased flexibility on the part of these institutions to allow their new recruits to remain in Western locations, according to one head of recruitment at Gulf SWF, who splits his time between the Middle East, London, New York and Paris in an attempt to find international talent.
“The priority is to persuade them to come to the head office, which I believe we’ve been more successful at over the past year, but we’re also willing to allow people to either remain in London, or split their time between their home and the Gulf,” he said. “This is not something we’re making a habit of, but for the right people, we’re willing to be flexible.”
The number of opportunities at SWFs continues to increase. A new survey by data provider Preqin suggests that assets under management in SWFs grew by $750bn globally over the past year. Eight new sovereign wealth funds have been formed in the past two years alone, it says, and many of these firms will be use the next few years to “build their investment teams and accumulate assets”.
SWFs have also been adjusting their pay structures to become more competitive with the private sector. It’s still heavily weighted towards a high base salary – something the recruitment manager says is “reassurance you’re making the right move” – but bonuses now comprise at least 20% of total comp, and benefits add on an “extra 30-40%”, he suggests.
Nonetheless, some remain unconvinced by SWFs attractiveness. One private equity professional who recently returned to London after a spell working for a SWF in Abu Dhabi, said that it was an intensely political experience: “Every decision had to go through a committee. It’s very difficult to make your mark individually, but wealth continues to increase regardless of investment strategy.”