ADD ADVICE TO FAVFund management
If you have an enquiring mind, an avid interest in the stock market and the ability to assimilate large quantities of information, why not consider a career in fund management?
Fund management is a separate specialist division of investment banking in which the investment bank competes with other banks and specialist firms in obtaining clients and then growing their investments over the long term.
Fund managers invest money on behalf of their clients, who are typically pension or insurance funds, wealthy private clients, or groups of less wealthy private clients who club together to gain an institution’s expertise.
Europe’s leading pension funds include Swiss-based UBS and the German Allianz Group. A number of big US fund managers, such as Fidelity, State Street Global and Merrill Lynch Investment Managers, are also active in Europe.
What’s involved in fund management?
Working as a fund manager used to involve everything from analysing and investing in products to persuading new clients to put money into the fund. Today, fund managers focus on the business of managing money and other people are employed to do the rest.
If you don’t fancy being a fund manager you could work as a marketer or investment analyst. Fund management marketers wine and dine potential clients and manage relationships with existing ones. Analysts help steer fund managers in the right direction when it comes to choosing assets in which to invest, scrutinising companies’ results and meeting management to discuss strategies.
Fund managers put together portfolios of everything from shares and bonds, to assets such as commodities and property investments that suit the client’s preferences and attitudes to risk and profit. Because it is concerned with the long term, fund management is much less intense and hectic than other areas of investment banking, and salaries are commensurate with this.
Job descriptions
Fund management skills
Research is a vital component of fund management. As in other areas of investment banking, analysts will examine what is going on across an industry, a sector or a geographical region in order to create financial forecasts and share valuations. Fund managers will then construct portfolios, both on the basis of the analyst’s reports and the client’s preferences.
The most important skill in fund management is to have the confidence to convince others to rely on your judgement over the longer term, particularly when the market is falling and the value of the fund is too.
Market changes
The fact that people are living longer and that most of the population of working-age people is declining has dealt pensions a double whammy. Consequently, the funds must make up the deficit. This has led some pension funds towards specialist hedge funds which guard against market volatility and can attract higher returns. In response, investment banks and other fund-management institutions have been creating their own in-house hedge funds.
Recruitment into fund management has been very strong for the past few years and, with some institutions bringing their outsourced operation functions back in house, more roles are available in the operations side of fund management.
