Diversity Project to provide coaching for returners
Moves: Citadel adds quant team; Invesco names P/E head
Closet tracker managers pay £34m in compensation
Asset managers have paid a combined £34 million to reimburse investors for high charges levied on “closet tracker” and “closet constrained” funds, following an investigation by the Financial Conduct Authority (FCA). The regulator reviewed 84 potential closet tracker funds last year and requested changes to the marketing materials for 64 of them to “make it clearer to consumers how constrained they are,” said Megan Butler, the FCA’s Director of Supervision – Investment, Wholesale and Specialist. One manager is facing enforcement action after publishing misleading promotional literature.
Closet trackers are passively managed, but charge fees commensurate with active strategies. Managers of closet constrained funds make active decisions, but these are restricted around a benchmark, limiting the funds’ upside and downside potential. “In both cases, the way the fund is managed isn’t clear, so consumers aren’t getting what they expected,” Butler wrote in an article for The Telegraph.
“We expect fund managers to take their duty to their consumers seriously. They should manage their funds the way consumers expect them to and tell consumers what they are doing. That is why clear promotional material for investment funds is a priority for us,” Butler wrote. “When we’re aware that firms haven’t been clear, we have a range of powers that allow us to intervene to protect consumers.”
How much were Europe’s portfolio managers paid last year?
Managers of active European equity mutual funds earned €345,322 on average last year, consisting of €179,627 in base salaries and €165,694 in bonuses. Portfolio managers at European wealth management firms took home slightly more, with total compensation of €398,632 and salaries of €212,077, according to Institutional Investor’s recent All-Europe Buy-Side Compensation Report. The average European equity hedge fund manager earned €461,536 last year, including a base salary of €206,909.
Institutional Investor polled 300 portfolio managers and research analysts at hedge funds, wealth managers and mutual funds based in Europe, all of whom actively manage European equity assets, for its inaugural report. The magazine only received responses from portfolio managers at European hedge funds with less than $1 billion under management, although analysts at hedge funds ranging from $500 million to $40 billion provided data. These analysts received packages worth €294,106 on average last year, including base salaries of €114,984.
Almost half of the European equity mutual fund managers surveyed expect their compensation to remain static over the next two years, while 39 per cent of respondents anticipate pay rises of 10 to 25 per cent. Portfolio managers at European hedge funds were more bullish, with 48 per cent expecting their compensation to increase by more than 50 per cent over the next two years.
Schroders to snap up alts shops
Schroders intends to grow its private assets capabilities through acquisitions. CEO Peter Harrison told Financial News he is keen to acquire specialists in real estate and private debt, the latter being “a huge space where there is more to do.”
Schroders would also consider buying other types of managers to grow its £33 billion alternatives division, which spans real estate, private equity, securitised credit and hedge funds. The firm has already profited from its acquisition of Swiss private equity manager Adveq last April; that deal has helped offset margin declines elsewhere in the business, such as outflows from quantitative equity strategies in Australia.
Women in finance focus
Mind the gap: managers pledge to increase female leadership
Hermes Investment Management, Jupiter Fund Management and Baillie Gifford published their gender pay gaps this week, attributing the disparity to more men holding senior positions – a metric they all plan to address. Hermes’ CEO Saker Nusseibeh described his firm’s 30 per cent gender pay gap as “simply not good enough,” while Jupiter’s CEO Maarten Slendebroek said: “I know we can, and must do better.”
“We have far too few female employees working at senior levels in our fund management and sales teams - the key reason behind the gender pay gap,” Slendebroek continued. “We are committed to increasing the number of female employees in these two areas of our business, and supporting their progression to senior roles.” When the fund management and sales divisions were removed from Jupiter’s data, the salary and bonus gaps narrowed to 12 and 40 per cent, respectively, from 38 and 84 per cent.
Hermes is also keen to appoint more female leaders. Almost a quarter (23 per cent) of its senior executives are women, which it aims to increase this year to 25-40 per cent.
Mean pay gap (per cent)
Mean bonus gap (per cent)
Legal & General
Standard Life Group
*Schroders' figures are for 2016, all other figures cover the financial year ending April 2017
Jupiter, whose board already has an equal gender split, has taken several steps towards bridging its pay gap. It has introduced a support and coaching programme to assist new parents and recently increased maternity and shared parental leave benefits to six months of full pay. It requests a balanced gender mix in recruitment shortlists and has created a women’s leadership group, chaired by CFO Charlotte Jones.
Baillie Gifford’s overall workforce, its client managers, and its cohort of investment professionals with 10 years’ experience or fewer, all have an even gender split. As of April 2017, women held 18 per cent of senior roles, up from 10 per cent a decade earlier.
PIMCO partners with Girls Who Invest
PIMCO has formed a partnership with Girls Who Invest, a non-profit that provides training programmes for young women and wants 30 per cent of the world's investable capital to be managed by women by 2030.
PIMCO will hire six of the charity’s scholars as interns this summer across its Newport Beach, New York and London offices. Investment professionals from PIMCO will also speak at Girls Who Invest’s summer intensive programs at the University of Pennsylvania and University of Notre Dame.
“Their innovative program is helping to build a robust pipeline of female investment talent, creating a more diverse industry and ultimately leading to better outcomes for clients,” said Emmanuel Roman, CEO of PIMCO.
Diversity Project to provide coaching for returners
The Diversity Project is partnering with The Buy-Side Club, City CV and M&G Investments to offer a free online training session for returners, focussing on applying for roles in the investment industry. The one-hour webinar will start at 1pm on Wednesday March 28th 2018. Returners can register here.
Panellists will discuss how candidates should perfect their CVs and position a career break, why asset managers are keen to hire returners, as well as the Returners Database, which connects returners with potential employers in the investment and savings industry.
Victoria McLean, CEO of City CV, will be joined by Sarah Dudney, Client Partner at The Buy-Side Club, and Colette Comerford, Diversity & Inclusion Manager at M&G Investments. They will share their collective experience and insider knowledge from many years of recruiting, interviewing, hiring and CV writing.
AEW has appointed Frédérique Bretveld-Weber as Country Manager for the Netherlands. She has over 15 years of real estate experience, including eight years as a Portfolio and Fund Manager at CBRE Global Investors.
AllianceBernstein has hired Lee Matthews as a UK Sales Director in London, responsible for the UK wholesale market. He was a Senior Business Development Manager at Aberdeen Standard Investments.
AMP Capital has appointed John Patrick Moorhead as CFO and COO. He was COO of Eight Roads (Fidelity International’s proprietary investment arm.)
Amundi has hired Stephanie Carbonneil as Head of Third-Party Distribution for the UK, Ireland and Greece, based in London. Stephanie previously ran Schroders’ sales and marketing strategy for investment trusts.
Aviva Investors is looking for office space in Edinburgh so its new CIO David Cumming can relocate there from London. Aviva, which already has offices in Perth and Bishopbriggs near Glasgow, plans to base a team of fund managers in the Scottish capital, according to The Telegraph.
Citadel has brought in a 10-person quant team from Hutchin Hill Capital, which is closing. The team is led by Michael Urias who was part of Hutchin Hill’s QuantOne team.
Separately, Citadel has made at least 21 people redundant at Aptigon Capital, its fundamental equities businesses, including Aptigon Head Richard Schimel and COO David Bonfili, according to Bloomberg.
Charles McKenzie, CIO of Fixed Income at Fidelity International, plans to retire at year’s end. Fidelity is searching for his replacement.
Franklin Templeton Investments has brought in Caroline Baron as Head of ETF Sales - EMEA to focus on its LibertyShares smart beta ETFs, which launched in September 2017. She joins from Invesco PowerShares where she was Head of UK Distribution.
Hearthstone Investments, the residential property investment specialist, has hired Cedric Bucher as CEO. He joins from Cardano, where he oversaw its DC business, and was previously Head of UK at Architas.
HSBC Alternative Investments has brought in Tim Williams from CBRE to be Head of Real Estate Investment.
Invesco has named Carl Stanton Head of Private Equity. He joins from Wellspring Capital in New York.
Investec Asset Management has hired Elias Erickson from Thornburg Investment Management as a Portfolio Manager in its quality team in New York.
Adam Laird, Head of ETF Strategy for Northern Europe at Lyxor ETF, has become the first Chairman of the Investment Association’s ETF committee.
J.P. Morgan Asset Management has hired Wayne Godlin as Head of High-Yield Municipal Bond Strategies, a newly-created role in New York. He was a Senior Portfolio Manager at AllianceBernstein.
KAS BANK has added James Parish as a Senior Business Development Manager to focus on developing fintech governance solutions for pension trustees. He was EMEA Global Custody Product Manager at J.P.Morgan.
Senior sales professional Markus Weis has left Goldman Sachs to join Vanguard as Deputy Head of Germany and Austria.
Viking Global Investors, a $25 billion hedge fund led by Andreas Halvorsen, has hired a team of engineers, analysts and platform architects to build a big data platform, according to Bloomberg.