Funds Management

1. How would you describe the current recruitment market? How has this impacted on compensation?

Themes changed little through the course of 2017 with Industry Funds continuing to beef up their investment expertise in international equities whilst demand in infrastructure, private equity and the alternative asset classes continued.
There has been pressure on compensation with some of the Industry Funds having to realign some of the bands to attract quality candidates from the commercial sector.
Aussie Equities: continues to be relatively flat. There has been a smattering of demand at the junior equity research level and the odd fund adding to staff (Airlie for example).
Global Equities: hiring continued in this asset class both in the industry fund and fund management space.
Fixed Income: continues to be relatively quiet, though some more demand on the credit side throughout 2017.
Alternative Assets: continues to be growth in hiring within direct and co-investment teams. The Private Equity, Infrastructure and renewable energy markets have seen a range of senior and junior level hires this year.
Property: Allocation to the sector but limited hiring activity continued.
Capital Raising: Institutional market has been relatively flat with continued demand into the wholesale market.
Asset Allocation: hiring continued in the first half of 2017 with limited activity.

2. Any client or candidate trends observed over the last 12 months?

Fee pressure continued across all asset classes at the Institutional level as industry funds continue to strengthen in-house expertise and focus on reducing costs. Focus is on retail flows/SMSF markets where margins are higher.

Infrastructure, Private Equity and Real Asset hiring has continued to be solid throughout 2017.

3. Predictions:

The Industry funds area will continue to build expertise in-house for both indirect and direct investing staff. As the funds under management continue to grow there will be constant reassessment of pursuing the direct investment route, however in the shorter term we expect the hiring to slow from the pace set in 2016/17.

Asset allocation will continue to dominate hiring patterns as we have seen over the past couple of years in the hunt for yield. Early view will be to watch the fixed income space as yields push higher with the Federal Reserve poised to continue the rate hike cycle and the affect it will have on other Asset classes. Multi strategy / Hedge funds may make a comeback in the year of the Trump and potential interest rate rises as volatility returns!

4. Any interesting case studies?

Industry funds – the next step.

There has been a continued build out of in-house investment teams throughout 2017 in both asset allocation and direct investing. The direct investment hiring has been predominantly across the listed equity space (domestic and global) with some hiring in unlisted assets. The smaller industry funds have been strengthening their bench within the individual asset classes but continue to remain focused on indirect investing. The search for talent has tightened, even as the talent war escalates to hire external direct investment professionals in a market where commercial fund managers have also had hiring needs.

The juncture of meeting candidate salary and potential bonus expectations will put pressure on the Industry fund sector and their remuneration models. Commercial reality is catching up in the hiring stakes, as too it seems are the growing pains of building large direct investment teams with rumblings of redundancies late last year. It will be a space to watch with interest in 2018.

Jon Michel
02 9235 9410

Michael Lee
03 9653 8620

Mischa Bennett
02 9235 9430

Daniel Yee
02 9235 9420

Patrick Everest
02 9235 9440