Investment Funds Micro-Economy
Investment Funds Micro-Economy
The BBC reported this week that the UK jobs market has stalled as the unemployment rate rose to its highest for 6 months. My first thought was that this data is surely lagged – the investment funds sector has been enduring inconsistent employment conditions for a longer period. Then I wondered whether the sector is in effect its own economic micro-climate or just hyper-sensitive to changes in the global economy.
What affects employment and recruitment in our sector?
· Global Events – recent history shows that significant changes to work patterns and recruitment levels can result from a single global event
· Market Trends – a number of factors drive investors’ propensity to invest and therefore the value of assets under management. The latter drives revenue for management companies, TPAs, ACDs etc. with a major impact on recruitment & employment
· Cost & Efficiency Decisions –process offshoring has been key in changing the number and type of fund administration jobs available in the UK
· New Products / Regulations – tend to provide change, sometimes structural – look at the layers of governance now present in typical investment fund operations, often resourced with reinvented administration specialists
· Consolidation / Disruption – we saw disruption to fund administration from around 30 years ago as the UK followed the US outsourced model. Large swathes of recruitment by TPAs resulted; now we are likely to see the reverse as a handful of service providers consolidate
· Confidence – in common with the wider economy, confidence is key to decision making. Hirers and candidates often make decisions based on their perception of the future rather than known facts.
Recruitment in the investment funds sector is highly reactive to change, but the underlying factors are cyclical and normal.
PS. In the meantime, recruitment company Page Group has just announced reduced profits, stating that an improvement to market conditions is not seen as imminent.
