The Covid-19 pandemic has driven junior bankers to re-evaluate their work/life balance, with many looking to switch to a career in private equity or fund management, writes Jenny Turton for our sister publication, Portfolio Adviser.
Having been forced to work from home at the height of the pandemic, many have enjoyed the flexibility that came with it and don’t want to return to a full-time office environment.
Several large investment banks, including JP Morgan and Goldman Sachs, have initiated a return to the office for staff, with both expecting to be back to pre-pandemic conditions by the autumn.
Asset management companies, however, have been less outspoken about their plans for staff to return to the office, although both Blackrock and T Rowe Price have said that any return will include more flexibility for employees. Last summer Schroders announced a permanent switch to flexible working.
‘Seems every junior banker wants to move into PE or fund management’
For junior bankers, however, it is the increasing workloads, long hours and inflexible nature of the investment banker role that is sending staff hunting for less stressful roles.
“It seems that every junior banker at the moment wants to move into PE or fund management. While this isn’t new, the desire seems stronger than ever,” says Simon Roderick, managing director of recruitment firm, Fram Search.
“The main reasons we hear are that investment banking can be transactional, whereas in fund management and PE you get to see things through, and banking can be repetitive after awhile. Covid has made us all more reflective, and bankers too are re-evaluating their careers.”
Covid has also been cited as the catalyst for fund managers rethinking their careers, following a wave of high-profile departures last year.
Meeting the demand
While the switch from banking to fund management or private equity doesn’t require much in the way of retraining, there is a question as to whether the vacant roles exist for those wanting to make the move.
A brief search across a few job sites suggests that there are around 2,500 open fund manager vacancies in the UK, including at companies such as Investec, Columbia Threadneedle and M&G.
According to research from the Association of Professional Staffing Companies (APSCo), vacancies within the financial services sector increased 37.8% between quarter one and quarter two, with hiring levels at the end of July already 6.9% higher than last year’s total.
APSCo’s data reveals that out of the top firms operating within the financial services arena, JP Morgan leads the table with 2,246 new jobs this year, an 18.3% increase on its 2020 total. Citi follows in second place with 1,552 vacancies, up 39.2% year-on-year.
Of course, these are not all fund management-specific roles, but with companies taking steps to roll out hybrid working practices it is unsurprising to see heightened demand for such roles.
“Our latest data shows that the recovery is well underway despite the challenges the pandemic has presented, and this is certainly echoed by our members operating within the financial services arena who are reporting huge demand for their services,” explains Ann Swain, CEO of APSCo. “While we expect to see this trend continue as we progress throughout the year, it can’t be forgotten that employers are contending with huge talent shortages which are only being exacerbated by the boom in hiring.
“Consequently, professional recruitment companies will have a huge part to play in assisting employers reach the talent they need to thrive and avoid hampering their recovery.”
With so many junior bankers seeking a move into fund management or private equity, investment banks are facing a significant talent shortfall and, in response, several have upped the staff benefits on offer.
This month, Goldman Sachs announced it was hiking the basic salary for its first-year analysts to $110,000 before bonuses.
They join several other banks that have reportedly increased the salary of junior bankers to a minimum of $100,000 – these include JP Morgan, Credit Suisse, Deutsche Bank, Morgan Stanley, Citigroup and Barclays, among others.