How much am I worth? Senior portfolio manager, equities
A panel of specialist headhunters give their assessment of typical London pay packages: senior portfolio manager, equities - salary 70,000-90,000, with bonus between 25% and 40% for someone with five years experience.
'How low can it go?' sounds like a game kids might play, but the sad reality
of this bear market is that some equities portfolio managers may be earning more from
betting on the FTSE falling than they are from fund management.
Before January, many in the > thought they had found a support level at
around 3,800: now, with Iraq, Al Qaeda and talk of stalled economic growth
dominating the headlines, the FTSE share index is plumbing new depths.
The gloom has been highlighted by a decision this month by Odey Asset Management, a hedge fund, to turn away from equities into bonds. As recently as October, the firm had been saying equities looked a good investment.
So what sort of person manages to remain a senior equities portfolio manager in this
market? The typical background, according to Martin Symon, asset management
consultant at Alexander Mann Global Markets, is at least five years
experience with a career background initially in equity research and a strong
geographical focus - either in European, Asian or US markets.
Products managed are likely to be either institutional or retail funds - though
sometimes a mixture - while performance is usually measured against both a
benchmark and peers.
'He/she might also have some research responsibility depending on whether the
firm has a separate research team, or whether research and fund management
are combined,' says Symon.
According to Russell Adam, fund management specialist at Adam Grant, other
qualities are also needed in this market: including strong nerves. Those with less than
five years experience, with no experience of a sustained bear market, are
finding the going especially tough.
'Most important for a successful portfolio manager are consistency -
emotional as well as professional - risk-aversion and the ability to look at
stocks clinically, with detachment. You need to be a steady, solid operator
and recognise that eventually things will get better,' Adam says.
He believes UK-based managers covering the US market are enduring the toughest
times. Prospects for European fund managers - particularly with good language
skills, contacts and a good record working for blue-chip firms - are rather
better, whilst those involved in hedge fund management as well as equities are
better placed still.
Adam thinks the bear market has touched bottom - although plenty would
disagree with him - which means that for those portfolio managers still in
the business, the best strategy now is to sit tight.
He says those with ten or more years experience, managing a team, can still expect a six-figure salary. But few are earning much above 100,000.
For the fund manager with three years of experience or less a basic of 40,000-50,000 is more likely; for somebody with five to seven years, working for a large institution, 70,000-90,000 is the norm.
Many fund managers are having to accept that bonuses for 2002 are at least 30%-40%
down on 2001 and that keeping their job is an achievement in itself.
'After three years of falling markets, all firms have had to address their
cost base and several have had to reduce headcount - staff costs being around
50% of total overheads,' says Symon.
Headhunters say some portfolio managers have found relatively safe havens working for boutiques - particularly those with a wealthy parent company. Costs are lower and
such firms can offer a more tailored, individual service than larger
institutions.
When will times improve? Adam believes 2004-2005: those who have survived the
worst bear market since the early 1970s should be especially well placed.
Others disagree - but at least betting on when the upturn comes is less
depressing than betting on further FTSE falls.
Figures and commentary provided by Adam Grant and Alexander Mann Global
Markets
