AMC Intelligence - March 2015

  • Pay soars at Asset Managers.
  • People Moves – Investment.
  • One Final Thought…

Pay soars at Asset Managers

Asset management might have a lower profile than investment banking, but the funds industry is fast catching up on its banking counterpart in terms of pay, new research shows.

According to think tank New Financial, pay at asset management firms is on the rise, with employees in the funds industry on track to out earn their investment banking colleagues within a couple of years.

Asset management staff have seen their pay jump by 22 per cent since 2006, the last full year since the financial crisis, while their investment banking colleagues have seen their pay drop by a quarter.

The New Financial research shows that average compensation of an employee at an asset manager was $263,000 in 2014, compared to $288,000 at investment banks. This is in stark contrast to 2007, when investment banks paid a whopping $395,000 on average per employee, while fund houses forked out an average of $248,000.

Meanwhile, an examination of the annual reports of several fund houses reveals chief executives have enjoyed big rises in recent years, with some seeing pay increases of more than 60 per cent between 2012 and 2013.

Separate research by the Financial Times shows that some pension fund chef executives are earning multimillion-dollar salaries.

However, the growth in pay has led to questions about whether the high salaries of the funds industry will make managers less inclined to vote against big pay packages at the firms they invest in.

William Wright, founder and managing director of New Financial, says with growing compensation costs at fund groups, asset managers may find it harder to question executive remuneration elsewhere.

“I think there is a real danger that as pay rises across the asset management industry, it becomes harder for the industry to hold corporate executives to account over pay,” he says.

“When we discussed the report with one of the largest UK asset managers, the first thing they said was 'glass houses and stones'.”

Luke Hildyard, Head of Research at think tank the High Pay Centre, says that when it comes to voting at annual general meetings, it is often asset managers who votes on behalf of shareholders.

However, he warns: “If [fund houses] benefit from the same high pay culture that they are voting on, they are unlikely to vote down [big pay packages at other firms].”

Large salaries within the asset management industry could also be having an adverse impact on those who hold shares of listed fund houses, as well as investors in funds, according to New Financial.

The report argues: “Asset managers and investment banks could significantly improve the division of reward between staff and shareholders.

“There is significant scope for further reductions in pay and staffing, and for sharing some of the efficiency and scale gains of the past decade with clients in the form of lower fees.”

Last year, Verum Financial Research analysed FTSE 100 companies, looking at correlation between pay and stock market performance found some asset managers performed dismally – with high pay but poor shareholder return.

However, one of the big reasons pay continues to increase at fund houses is because assets under management have grown strongly, as have revenues, New Financial’s study says. In contrast, investment banking staff are taking a “shrinking portion of a shrinking pot”.

In fact, while average pay per employee within the funds industry has increased by nearly 60 per cent between 2004 and 2014, revenues and profits per employee have increased at an even faster rate, and assets under management per employee have doubled.

The average pay at some asset managers is much higher than at others, with fund houses which are focused on the institutional market more likely to fork out big salaries, New Financial says.

According to New Financial’s study, between 2004 and 2014, average pay at an asset manager has gone up by almost $100,000 to $263,000, while investment bank employees have experienced a drop $27,000 to $288,000 over the same period.

Figures from Emolument.com, the salary benchmarking website, shows bonuses continue to play a big role in the asset management industry. An employee at managing director level at a fund house in Europe earns an average of £307,000, with their bonus accounting for half of that figure, it says.

Overall, an analyst working in the front office of an asset manager earns an average of £56,000 a year, slightly more than their equivalent at an investment bank, according to Emolument.

Associates, directors and managing directors within asset management firms earn less than their counterparts at investment banks, although salaries are still high, Emolument figures reveal.

And these salaries show no signs of declining, with pay rises predicted to continue in the asset management industry.

People Moves

Investment

Stephanie Ouwendijk has moved from Ashmore, where she was a Fund Manager, to join Franklin Templeton Investments as a Portfolio Manager in its Emerging Markets Debt Opportunities team.

Standard Life Investments has hired Alex Campbell as Investment Director from Assured Guaranty, where he held a similar position and Marianne Froud from Australia and New Zealand Banking Group, where she was a Senior Analyst, to become an Investment Analyst, both appointments within its Infrastructure Debt team.

JPMorgan Asset Management has appointed Jonathon Griggs as Director of Applied Research for the Global Fixed Income, Currencies and Commodities group. He rejoins JPMAM after spending just over a year at Rogge Global Partners, where he was a Senior Portfolio Manager. He had spent the previous 14 years at JPMAM.

Russell Investments has hired Alexandre Martin as Portfolio Manager in its Transition Management service. He joins from Société Générale in Luxembourg, where he was an Assistant Portfolio Manager.

BNP Paribas Investment Partners has hired a team of Senior Portfolio Managers to build a new Institutional Global Equities business. The team, from NewSmith, consists of Simon Roberts, Jonathan Barnett, James Mann and Stewart Lambert.

Legg Mason is getting into the Exchange Traded Fund game, having hired two Senior Executives from VanguardRick Genoni was Head of Global ETF Product Management at Vanguard, while Brandon Clark was Head of Vanguard’s Capital Markets desk.

BlackRock has appointed Deborah Winshel as Global Head of Impact Investing. She was formerly President and COO of The Robin Hood Foundation.

Eoin Murray has left GSA Capital Partners, where he was a Fund Manager, to join Hermes Investment Management as Head of its Investment office and as a member of the Senior Investment Leadership team.

Mike Brooks has moved from Baillie Gifford, where he managed a diversified growth fund, to Aberdeen Asset Management, where he will be Co-Lead of the Diversified Growth capability.

Fixed Income Manager Omar Saeed has left Swisscanto, where he was Director - Head of Global High Yield, to join Legal & General Investment Management as a Senior Portfolio Manager.

Odey Asset Management has hired Oliver Kelton from Waverton, where he managed a long-only European Equities fund. He will continue to manage the Waverton European fund with the same clients and process at Odey.

Kames Capital has hired Matt Harding as an Investment Analyst focusing on North American equities. He joins from the Restructuring team at Zolfo Cooper.

Unigestion has hired Rudyard Ekindi as Head of Investment Solutions in its Equity team. He was formerly Director of Investment Research at pension scheme Nest. Unigestion has also appointed Ken Harvie as Head of Consultant Relations. He joins from Ignis Asset Management, where he was Client and Consultant Relations Director.

Mirabaud Asset Management has appointed André Broijl, Bert Hospers, Sai Kit Lam and George Luijk, all from Syntrus Achmea Asset Management in the Netherlands, to its Fixed Income team.

Aon Hewitt announced Jorge Huitron has joined its Manager Research team to focus on European Private Equity. He was previously a Director in private market research at Bfinance.

Jeffrey Mueller leaves Threadneedle Asset Management, where he was a High-Yield Portfolio Manager and Investment Analyst, to join Eaton Vance Management International in a similar role.

Trevor Greetham has joined Royal London Asset Management as Head of Multi-asset left. He was previously Asset Allocation Director at Fidelity Worldwide Investment.

Théodore Economou has joined Lombard Odier Investment Managers as CIO of its Multi-Asset Business. He was previously CEO and CIO of CERN pension fund.

Insight Investment has hired David Hillier as a Portfolio Manager within its multi-asset strategy team. He was previously an Economist in the multi-asset team at Aviva Investors.

Greg Finck has joined Morgan Stanley Investment Management as a Portfolio Manager and Head of the Securitised team for MSIM’s Fixed Income platform. He was previously a Portfolio Manager at Fortress.

Patrick Huber has joined Mirabaud Asset Management as a Senior Portfolio Manager. He moved from Lombard Odier Investment Managers, where he was the firm’s Swiss Equities Specialist.

Aviva Investors has appointed Mark Connolly as CIO for Fixed Income.

Esther Law has joined Amundi as an Investment Manager from Pioneer Investments, where she was an EM Local Currency Bond Fund Manager. Abbas Ameli-Renani has also been appointed as a Strategist after moving from a role in Emerging Markets Research & Strategy at Royal Bank of Scotland.

Stephen Mitchell is moving to Jupiter Asset Management as Head of Strategy for Global Equities, from Caledonia Investments, where he was Associate Director, Global Equities.

Ex Ignis Head of UK equities, Graham Ashby, has joined Santander Asset Management to run the firm's UK growth funds.

JO Hambro Capital Management’s Trygve Toraasen will leave the firm as his fund faces closure after failing to raise substantial assets.

BlueBay Asset Management, has hired Jana Velebova as a Portfolio Manager from Rogge Global Partners, where she was a Partner.

Distribution

James Arnold has moved to Goodhart Partners as a Sales Director. He was previously at Artisan Partners as a member of the Institutional Sales and Client Services group.

Mirae Asset Global Investments has appointed Sander van Ouwerkerk from Acadian Asset Management to lead its Benelux and Nordic sales efforts.

CANDRIAM has hired Matthieu David as Head of CANDRIAM Investors Group Italy. He was formerly Director of External Distribution in Italy for BNP Paribas Investment Partners. CANDRIAM also added Alessandro Malinverno, who was previously Head of Third Parties and the Distribution Network at Banca Reale, and Ergys Luga, who has been at CANDRIAM since 2009, to its Italian Sales team.

Nikko Asset Management has hired Cameron Kuwahara as Head of Solutions Marketing from Citigroup Global Markets, where he was a Senior Sales Director in Singapore.

Andy Wiggins has joined Amundi as Head of UK and Ireland Institutional Business. He was previously Head of UK Institutional Business Development at Allianz Global Investors.

Angelien Kemna has joined the Board of RPMI Railpen. She is currently CFO and Risk Officer at APG, the €396bn Dutch pension manager.

Aviva Investors has hired Louise Kay as Global Head of Sales from Standard Life Investments, where she was Head of UK Institutional Business.

Guillaume Abel has joined CANDRIAM as Global Head of Marketing. He was previously Head of Marketing at Amundi.

Elise Auer has joined Broadwalk Asset Management as Head of Business Development. She joins from Timberland Investment Resources Europe.

PineBridge Investments has hired Tomi Lāngström as Head of Distribution for the Nordics.

Anthony Briskey has joined Lazard Asset Management as UK Institutional Sales and Marketing Manager from HSBC Global Asset Management, where he was Institutional Sales Manager.

Benedicte Rabier has moved to Amundi as an Alternative Investments Senior Product Specialist from AllenBridgeEpic, where she was an Alternative Investment Products Specialist.

Laurent Seyer has joined MSCI as Global Head of Client Coverage. He joins from AXA Investment Managers in Paris, where he served as Global Head of the Client Group.

Henderson has hired Ian Dyble as Head of Product Development. He was previously Head of Product Development and COO at Cazenove Capital Management. Henderson has also promoted James Bowers to the broader role of Global Head of Product and Distribution Services.

Sarasin Fund Managers has appointed Jamie Matheson as Chairman. He was previously the Executive Chairman of Brewin Dolphin. Jim Fisher, the current Chairman, will continue as a Director.

Simon Osborne has joined Woodford Investment Management as Head of Compliance from Nuveen Investments while Gavin St John-Heath has been appointed Chief Risk and Operations Officer after moving from BlueQuant Capital Management. Also joining are David Brailsford as Data Architecture Delivery Manager from IBM and Vimal Patel, a Business Analyst, who moves from Mubadala, the Abu Dhabi government-controlled investment company.

T. Rowe Price has appointed John Yule, the former Head of Retail at F&C, as Head of Intermediary Relationship Management, UK and Ireland.

Rob Hudson, currently Head of Charles Stanley Direct, is joining Aberdeen Asset Management to develop the group's digital proposition.

Neuberger Berman has appointed Jahangir Aka as Head of Middle East & North Africa (MENA), in charge of the firm’s distribution efforts in the region. He joins from SEI Investments, where he worked most recently as Head of Middle East.

F&C Investments has appointed Alex Howe as Sales Director of the firm’s UK Wholesale team. He joins from Schroders, where he worked in the UK Asset Manager Sales team with primary focus on London Discretionary firms.

AXA Investment Managers has announced the appointment of Stéphane Janin as Head of Global Regulatory Development. He joins from AFG where he was Head of its International Affairs division.

Kames Capital has appointed Peter Ball as Director of its Institutional Business and Head of Business Development at its parent Aegon Asset Management. He previously worked at JLT Employee Benefits as Director of Institutional Business.

ING Investment Management has announced the appointment of Bart Oldenkamp to its Integrated Client Solutions (ICS) team. He joins from Cardano Risk Management where he was a Member of the Management Board.

Threadneedle Investments has appointed Patrick Steiner as Head of European Insurance Sales, based in Zurich. He joins from Conning Asset Management, where he was Business Development Director in charge of European Insurance clients.

Pioneer Investments has announced the hire of Mark Spina as Executive Vice President and Head of US Intermediary Distribution. He joins from Voya Investment Management, where he was Head of Intermediary Distribution.

And one final thought...

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