As Deutsche Bank’s compendium of charts on the state of the finance industry made clear, pension funds are a place to be. Pensioners are growing, ergo so are pension funds and so is the need for people to manage pension funds’ money. Even better, pay for fund managers is increasing.
A report by think tank New Financial says it won’t be long before the average fund manager earns more than the average investment banking professional. Come 2018, New Financial predicts that the average fund manager will be on nearly $300k while the average investment banker will be scraping by on $200k.
The following tables, taken from the report, help explain why. Investment banking productivity has stalled and pay is falling. Asset management productivity is increasing and is having a complementary effect on pay.
New Financial’s report contributes to the sense that fund management is a better career bet than investment banking. Top fund manager and matriarch extraordinaire Helena Morrissey recently claimed that fund management is the one finance career that gives you control over the hours you work. In 2018, who will want to work in investment banking when you can earn 50% in another finance sector and leave the office before 6pm every night?
Separately, Bloomberg reports that Autonomous, the excitingly enigmatic research firm which distributes its notes only to a chosen few, has written something suggesting Deutsche bank cut 50% of its rates team on the grounds that rates trading accounts for 20% of Deutsche’s leverage ratio assets whilst making an estimated RoE of only 4%. It’s not clear how well this has been received at Deutsche, where the rates business is already said to be feeling a little fragile. However, Deutsche’s rates professionals can draw consolation from the fact that their kind is still wanted somewhere. Specifically, Goldman Sachs is hiring. Bloomberg reports that Goldman just poached a co-head of rates sales for North America from Morgan Stanley.
Ed Balls says the HSBC scandal highlights the need to defer bonuses for…10 years. (Bloomberg)
J.P. Morgan compelled bankers possibly linked to its dubious Asian hiring practices to leave before receiving bonuses. (Bloomberg)
J.P. Morgan just lost an MD in leveraged finance to Bain Capital. (Global Capital)
When to negotiate a salary offer. When not to. (Mashable)
‘A feeling of competence at the end of the workday can ward off a bad mood.’ (WSJ)
Students complain that economics exam was ‘impossible.’ (BBC)