The ever changing macro and micro environment has made for an interesting few months, with understandable market uncertainty in the lead up to Article 50 being triggered, coupled with Trump’s first quarter as the USA President. Having said that, recruitment initiatives have continued to take a high priority across financial services with talent pipelining and retention being one of the main focus of this quarter.
Asset management firms as a whole have been proactive in terms of finalising their European strategy following the Brexit vote, with the added pressure of the forthcoming MiFID II regulations, which has led recent talent acquisition strategies. Fortunately the presence of key third country passports, along with the EU domicile of most of London’s UCITS managed funds, makes for a smoother Brexit transition for asset managers than many other finance sectors.
We have also seen further calls for large pension funds to invest in green funds, as well as the public calling out of companies who are failing to prepare for a move to a greener economy. Notably, LGIM has written to 84 global companies, the most exposed to climate change, including miners and bankers, and called on them to take action to tackle global warming.
There have been a number of trends over the last quarter and the need for European language speakers has been of particular note. A strong emphasis has been placed on native or fluent German speaking candidates, whilst French, Spanish and Italian candidates have also been in high demand but to a lesser extent. This may be attributed to businesses looking to solidify their foothold in mainland Europe.
The sustained need for RFP writers at a variety of levels is still very much driving the market. As well as the usual junior positions, more experienced leavers have led to a number of hires at the senior manager/head of level in addition to growth hires. Whilst the majority of these mandates require candidates with buy-side experience, some clients are beginning to consider the possibility of employing agency or sell-side candidates who already have proposal writing experience and training them on products.
Another notable area of activity area has been in the digital space. Candidates with specialised digital experience seem to have been more sought-after than generalist digital marketers with UX, email marketing and analytics being top priorities to clients. As an increased number of firms rebrand and revitalise their marketing efforts, along with several companies shifting towards retail investors, digital seems to be a growth area for a number of businesses.
We envisage that the passively managed funds, particularly ETFs will continue to increase their market share in Europe and Fidelity International has become the latest investment manager to try to break into the rapidly growing exchange traded funds industry with the launch of two income-based ETFs last week.
We also anticipate that executive pay and initiatives targeted at closing the gender pay gap will continue being the priority for investment managers in the coming months as the Gender Pay Gap Reporting regulation comes into effect, which requires employers with 250 or more employees to publish statutory calculations every year. These results must be published on the employer’s website and a government website, and must, where applicable, be confirmed in a written statement by an appropriate person, such as a chief executive. As of April 2017 employers have up to 12 months to publish this information.
Revealingly, the FT recently gathered data from 50 of the world’s biggest banks, insurers, asset managers and professional services firms on their progress towards achieving a more even split between men and women throughout their organisations. Despite some improvements in recent years, progress remains painstakingly slow.
Schroders recently published details of it’s gender pay gap and found that fixed pay for its female staff was 33 per cent less on average when compared with salaries for male employees. It also found that bonuses for female staff were 66 per cent less on average than bonuses for male staff at the company, but attributed this to the underrepresentation of women at the most senior levels, with associated pay.
Winners of 2016
Standard Life’s long held grip on the title of manager of Europe’s largest investment fund was challenged last year by Nordea, after the Scandinavian investment management firm attracted its highest ever annual net inflows- €14.4 billion. Blackrock has retained its number one position for a fourth successive year with €16.2bn net inflows.
In a review of 2016 global asset flows by Morningstar, passive provider Vanguard garnered inflows of $289bn, more than 4,000 other global providers put together. However, 96% of Vanguard’s inflows came from US investors while BlackRock’s iShares was the top provider of index funds in Europe, seeing €26bn from European investors compared to €14.3bn for Vanguard.
Funds from Fundsmith, Invesco Perpetual and Aviva Investors were the top-selling vehicles throughout 2016. Amundi recorded net inflows of €62bn in 2016 despite the turbulent market, with their position to strengthen upon completing of acquisition of Pioneer Investments later this year.
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