Fund managers enact bidding wars for specialist talent

Fund managers may be strapped for cash in a squeezed operating environment, but they are willing to pay up for specialist talent to diversify their fund range.

The latest recruitment guide from financial services recruiter Keegan Adams found growth is becoming challenging for asset managers as they struggle to raise capital and face higher compliance and regulatory costs. 

They are also under pressure to reduce fees in the face of passive players and are potentially losing mandates as superannuation funds opt to internalise their investment. 

As a result, they have been warned they will need to diversify into specialist asset classes such as specialist fixed income and private equity, if they wish to remain competitive.

“Businesses must do more with less, optimising resources while managing increasing regulatory and operational expenses. This environment is forcing firms to rethink strategies, streamline operations, and justify every investment decision more rigorously.”

VIEW ALL

View all

However, as they look to broaden their product ranges, they are willing to pay up for investment specialists in areas outside of their existing expertise. 

“Despite tight salary budgets, substantial pay increases have been offered in areas where demand has outstripped supply. In these cases, firms engage in bidding wars to secure senior or specialised talent, given the limited availability of qualified professionals in Australia.”

Average salaries for investment specialists range from $120,000–$220,000, rising to $220,000–$300,000 for a portfolio manager. 

In the distribution space, a senior wholesale business development manager can earn $230,000–$280,000, while a head of wholesale distribution can earn $290,000–$350,000. With the advent of newer, alternative products, the role of a BDM is becoming more critical than ever as financial advisers rely on them to provide understanding and education on how the products will fit in with their clients' portfolios.

These specialisms in the private markets space have seen high popularity in recent years and prompted a raft of fund launches, which Keegan Adams said “won’t slow down” this year. The fund manager salaries compare to one of $85,000-$120,000 for a lending specialist at a bank, for example.

“The private market boom has created demand for talent to rival traditional lending sectors, often offering much higher remuneration to compensate for the risk of a less-established firm in a rapidly evolving industry. 

“And as private markets come into sharper focus, so too does their governance. We anticipate increased demand for regulatory/compliance skills in this space as the private markets industry goes under the microscope by the local regulators.”

A risk and compliance manager can earn $120,000–$180,000 which rises to $140,000–$220,000 for a  senior position.

Last year, recruiters told Money Management that moving from public markets or traditional investment banks into private markets could be a lucrative move. Compensation in these types of firms may be structured as 2/20, with a 2 per cent management and 20 per cent performance fee, for example.

Matt McGilton, managing director at Kaizen Recruitment, said: “Moving from listed markets to private can be a good move. There are more bonuses on offer. It’s more like a quasi-investment bank in that sense with a strong focus on getting deals done.”